Here's everything small business owners need to know about Obama's new budget Similar to the spending guides passed in Congress, Obama's budget includes several features that would favor small businesses, but it also includes some that haven't proven particularly popular on Main Street. Here's a look at the primary components of the budget and what it would mean for small businesses. On entitlements: In the days leading up to the budget release, most of the discussion centered on the president's willingness to work with some of his political opponents to trim spending on entitlement programs, particularly Social Security - and he's taking plenty of heat for it from his own party. Obama's plan would basically change the way entitlement benefits are adjusted for inflation. Using the new formula, those benefits would increase at a slightly slower rate than they do under the current system. Coupled with plans to lower payments to providers and raise premiums for some patients under Medicare, the budget would trim about $1.2 billion in spending over the next decade from a range of federal programs. In several polls, small business owners have condemned plans to cut back on entitlements, even when pitched as an alternative to higher tax rates. Some elderly employers would be hit directly by the cuts, but the broader concern, they say, is that undercutting programs like Medicare, Medicaid and Social Security could shatter any semblance of consumer confidence, which could drive sales lower. On taxes: Republicans may not be in a very compromising mood on this one, given their concession to raise rates on the wealthy at the start of the year - but that did not stop the president from pitching new tax revenues in his latest proposal. His budget limits certain tax deductions for high-income earners, sets a minimum tax rate of 30 percent for households earning annually more than $1 million, and calls for closing additional loopholes exploited by the wealthiest Americans. Interestingly, House Republicans called for eliminating some of the same tax breaks in their budget; however, their plan is to use the savings to offset lower rates across the board, whereas Democrats want a large portion of the additional revenue to fund government operations. Several small business lobbying groups have contested attempts to raise the tax burden on the wealthy, arguing that a large number of small employers pay pass-through taxes on their business income, placing them in tax brackets higher than those appropriate for their actual level of personal income. Increase their rates, they warn, and they will have less money to invest back into their firms and create new jobs.