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This thread reminds me of that old movie "The Long, Long Trailer" (1953).
Anyway, one thing everyone here seems to be overlooking is the police. Not sure about elsewhere but here if a cop sees you in a small car towing "a lot", they will pull you over and check to make sure you are within your GVWR. If you aren't, heavy fines. They will break out scales to weigh everything too (I've seen it more than once). If your rear end is "lower than normal" they will assume you are "overloaded" and pull you over to check. If you stay within the GVWR you may be fine but if you get in an accident your insurance may not cover you if you are deemed at fault. Rates will probably go up too.
When it comes to IF a small car can tow, the simple answer is "Yes, usually, with some modifications typically". However, most tiny cars have a unibody "frame" and isn't as suitable for towing as a car with a normal frame.
In the distant future I may get to test this. I've been considering what to do with my old van (which has a burned out transmission). I may convert it into a fuel efficient car. Due to the frame, I may could tow with it (it would then come down to the engine and transmission). Since it's listed as a half ton van legally, if I don't have to legally change it, it can tow a lot.
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