By T.W. Farnam and Tom Hamburger - The Washington Post
WASHINGTON – Small businesses, like the family-owned diner and the Main Street hardware store, are iconic images of America’s entrepreneurial spirit. Now, as President Barack Obama and lawmakers seek to negotiate a deal on taxes and federal spending to avert a year-end budget crisis, both political parties and a range of outside advocates are claiming they best represent the interests of small business.
But politicians and interest groups have twisted the definition of “small business” as they seek an advantage in the debate over whose taxes to raise. Those who claim to speak for small business often represent only a narrow slice of that broad sector, if they represent it at all. And groups that are truly composed of small firms often are allied with advocates on the political right or left whose interests bear little resemblance to those of mom-and-pop stores.
At the heart of the debate is whether tax rates should increase for top-end taxpayers, as Obama has long urged. Most small businesses pay taxes according to individual rates, not corporate rates, so some firms would see their taxes increase if upper-end rates are raised.