"ECONOMY -- REPORT: OBAMA'S BUDGET WILL HELP SMALL BUSINESSES: A common attack refrain by conservatives on President Obama's budget proposal is that tax increases will hurt small businesses. Beginning in 2011, Obama's plan would slightly increase taxes on households earning more than $250,000 and individuals earning over $200,000. In defending the Republican's alternative budget proposal that offers a large tax cut to businesses, House Minority Whip Eric Cantor (R-VA) said, "Republicans know that raising taxes on small businesses will only result in more workers losing their jobs." However, a new study by the Center on Budget and Policy Priorities finds that "under the Clinton Administration, when the tax treatment of high-income families was very similar to what President Obama has proposed, small businesses generated jobs at twice the rate as under the Bush tax code."

During the Clinton years, small businesses generated 756,000 new jobs, versus only 367,000 new jobs under the tax conditions set by Bush, which Republicans seek to replicate. Further, "more small business owners would receive tax cuts" under Obama's plan because they do not fall into the $250,000-plus tax bracket. "Most small business owners aren't in the top two marginal tax rates," said Benjamin Harris of the Tax Policy Center. "In my opinion, there's some misunderstanding in these political debates that the people who'll be affected are middle-income Americans who run mom-and-pop stores."

(The Progressive)