It annoyed me in the general election when McCain/Palin kept repeating this lie and now it has been resurrected by the Senate and House Republicans against the budget proposal.
The lie is that Obama is punishing small businesses by allowing the Bush tax cuts to expire for those making over $250K per year. They say that this really effects small businesses since most of them file as sole proprietors.
The problem is that the $250K threshold for tax increases when dealing with a sole proprietor is not on gross revenue but rather on profit. If your business grossed $400K and you had $300K in expenses, you only made $100K in profit and your tax would not be effected.
If anything, it would be an incentive for single proprietors to invest in the business (like hiring another employee) once they got over the $250K in profits. Actually, any small business owner with this amount of profit would be silly not to form an LLC or S-Corp.
The other lie that the Republicans are making when they say this, is the implication that most of these businesses net more than $250K in profit. I would imagine the percentage of small proprietor businesses that profit more than $250K is less than one percent.
The best thing that could be done to help most small business (sole proprietor) type owners is to fix the cost of health care and other insurance. This would have a much greater impact on most of their bottom lines than to worry about a very modest tax increase on profits over $250K.
Democrats really need to start calling the Republicans on these ridiculous lies that they keep repeating.