The argument was raised during a committee hearing on the fate of the Bush tax cuts.
It stems from a Congressional Budget Office report showing 50 percent of "flow-through" companies, which is how many small businesses are structured, will face higher taxes if the top two rates expire.
Baucus said large companies like hedge funds, law firms and accounting firms make up the bulk of that percentage, not a typical small business.
"Over 70 percent of the so-called 50 percent is big business, where as 97 percent of small businesses, in terms of numbers, are not in the top two rates," Baucus said. "I think we should make it clear what the facts are here. It's true that 50 percent of business income is in the top two rates, but that's not small businesses."
The chairman also suggested efforts to reform the tax code should begin as soon as possible, but said it was unlikely to happen this year.