This is a rush transcript from "Special Report," April 22, 2011. This copy may not be in its final form and may be updated.

BRET BAIER, ANCHOR: The president has been talking taxes as he's been out on the stump. He claimed Monday that only two percent of small business owners make more than $250,000 a year. And of course, if the president has his way that top income bracket will see tax increases. Essentially the Bush tax cuts will expire at the end of 2012.

What about this battle? We're back with the panel, also with a surprise at the end. Steve, first to you. National Federation of Independent Business (NFIB) suggests it's more than that. They suggest a quarter of all Americans are employed by these companies that have 20 to 250 employees and they file individually instead of as a business.

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: Yeah, well I think you can -- everybody sort of gooses the numbers. If you listen to some Republican groups, it's like the only people in top brackets are mom and pop store owners. And if you listen to the president it's just Warren Buffett and all of his buddies.

But there's a treasury department report out that said 75 percent of the people in the top two brackets have some business income. Now that could take a variety of forms. Of that group, of the people in the top two brackets, 27 percent, according to two liberal think tanks have a majority small business income. So I think it's fair to say that those are small business owners, or people who derive a majority of income from small business. That's a quarter of the people in those top brackets. That's not insignificant. And I think, when the NFIB representative says, these are people, this tax is gonna disproportionately affect small business owners, he's right.

The bigger question is why are we talking about raising taxes in this economy right now? Remember during the lame duck, you had estimates from Goldman Sachs and others that raising taxes, all of the Bush taxes or some of them, was gonna cost us significantly in GDP growth. Why would we do that at this point?

JUAN WILLIAMS, SENIOR EDITOR, THE HILL: Juan, politically is he winning on this issue? Polls show people are OK with it. But in this economy, is he winning on this issue politically?

WILLIAMS: Yeah, the polls are how I would interpret the politics of it, and he's winning overwhelmingly on this issue. Americans think, Republicans as well as Democrats, say go ahead and raise taxes on people who make more than $250,000. I don't understand, Steve says it's either between the two percent that the president cited which is based on IRS numbers, or the 27 percent that some think tank, you said, some liberal think tank sponsored. So how is that disproportionately a burden on small business? I don't know anybody involved in small business that is making that kind of money as a matter of their corporate income? I just don't know. I mean, that's exceptionable, $250,000.

BAIER: And so this battle continues, Charles.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Look, I think in the end, what the administration is doing, Obama knows that if you do these taxes on small business it will reduce employment, which would hurt him, except that it doesn't kick in after 2012. So it will be in the second term and he won't suffer the consequences.

BAIER: OK, the surprise we were talking about as you may have seen before, Charles has been a little forward leaning, let's say on Donald Trump's potential candidacy for president. And today Charles received a phone call from Donald Trump.

KRAUTHAMMER: Donald Trump. Yes, it was a surprise. And when my secretary told me I put on a helmet and a flak jacket as I answered the phone. I expected a tirade, which he would have had every right to do given what I've been saying about him.

In fact, he was courteous, very calm. And he made his case, rather than sort of attacking everything I said about him, he simply -- he made his case. I'm a serious businessman. I'm a serious man and a serious candidate. And we had a few exchanges on issues like China, Iraq, Iraqi oil, and the birther issue, but the tone was no worse than Juan and me on a normal day.

And it was a back-and-forth. At the end, I felt that I ought to tell him that my column coming out tomorrow is going to be even worse than what I said about him on television.


I didn't want to hang up and then surprise him in the morning.

BAIER: So you told him?

KRAUTHAMMER: I told him and he handled it well and I give him credit for the way he conducted himself.

BAIER: And quickly, from that phone call is it your sense that he is running?

KRAUTHAMMER: Absolutely.

BAIER: No doubt in your mind?

KRAUTHAMMER: No. If we were not he would have screamed and yelled and stomped. If he were serious, as he is, and I also, I give him credit for sincerity here. I think he's running and he wants to make people see him as a serious candidate. And that's why he called.

BAIER: Well, there's some news at the end of the panel. That is it for the panel, but stay tuned for a priceless moment in local news.

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