Small business caught in tax battle

Newly empowered Republicans say President Barack Obama would subject as much as half the nation’s small-business income to job-withering tax increases. Obama and his Democratic allies argue that allowing taxes to rise on the wealthiest Americans would affect only a handful of small business owners.

Both can’t be right. And both are playing number games as the lame-duck Congress prepares to take up one of the most contentious issues of the postelection season: what to do about an array of about-to-expire Bush-era tax cuts? If Congress fails to act, taxes will go up for essentially every American taxpayer on Jan. 1.

Neither party wants that to happen. Hoping to avoid a December train wreck, Obama has hinted at a possible compromise – perhaps extending the tax cuts for everybody for a year or two. But so far, the president and the Republicans, flush from their big midterm election gains, haven’t been able to bridge their differences.

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