BETWEEN TOUGHER EMISSIONS standards for manufacturers and billions of dollars in loan guarantees to shore up credit, President Obama's $3.6 trillion budget is a mixed bag for small-business owners.

While small businesses stand to gain from certain initiatives within the proposed budget, such as making the corporate research and development tax credit permanent and eliminating capital-gains taxes on the sale of stock in small businesses, there are also some damaging trade-offs. Obama's plan calls for raising dividend and income taxes on high-earners, stricter regulations and reporting requirements for businesses and the closing of some corporate loopholes that businesses rely on to reduce their tax bills.

"[Business owners] who were earning a lot more than everyone else are now going to be paying more," says John Evans, a tax partner who specializes in small businesses at BDO Seidman in New York.

So what can small-business owners expect? Here's the good and bad of Obama's proposed budget plan:

Investments in smaller companies to be more attractive taxwise
For all those start-ups out there, Obama is offering a carrot: He'll eliminate the capital-gains taxes on the sale of stock in businesses that have less than $50 million in annual sales. The tax perk is geared toward rewarding the original owners of a business, says Evans. Should the plan pass, there will likely be time constraints as to how long these shareholders must hold the shares before they can sell them tax free.

Permanent tax perks for research and development
Another promising prospect? Obama would make permanent the research and development tax credit. The credit which refunds a percentage of expenses associated with research projects formerly needed to be renewed periodically.

Automatic enrollment of employees in retirement plans
Requiring employers to automatically enroll employees in workplace pension plans such as individual retirement accounts and 401(k)s is one way Obama hopes to secure retirement for more people. The good news for employers: They won't be required to fund the accounts. However, employers will need to set up automatic payroll deductions, which can be laborious for smaller firms, says Bill Rys, tax counsel for the National Federation of Independent Business in Washington, D.C.

Expansion of available credit
Hoping to thaw out the currently frozen credit market for small-business loans, Obama's budget includes $28 billion in loan guarantees that are intended to expand small businesses' ability to attain credit. The money would go toward funding various loan programs such as the Section 7(a) Guaranteed Loan program and Section 504 Guaranteed Loan Program, which are administered by the Small Business Administration.

The president would also provide nearly $700 million to the Small Business Administration in 2010 to, in part, widen the reach of advisory programs such as Small Business Development Centers and SCORE, as well as streamline the SBA's core operations.

Higher taxes for high-earners
Obama proposes raising the capital gains and dividends tax rate from 15% to 20% for individuals earning more than $200,000 ($250,000 for married couples), as well as limit many deductions and exemptions. Also, when incorporated business owners remove funds from the business, that money will get taxed at the dividend rate. That means highly-profitable incorporated business owners can expect to pay higher taxes as the dividend tax rate rises, notes Greg Rosica, a tax partner at Ernst & Young in Tampa, Fla.

Starting in 2011, Obama would also raise the top two income-tax rates to 36% from 33% and to 39.6% from 35%, which would directly affect wealthy business owners who operate partnerships, limited liability companies, S-corporations and sole proprietorships.

Manufacturers will be forced to meet new emissions standards
In an effort to reduce greenhouse gas emissions, Obama wants to introduce a cap and trade system, under which polluters will be forced to purchase permits to offset their own emissions should they exceed certain levels.

The new system will probably hit smaller manufacturers the hardest. These businesses will either have to absorb the cost of getting their facilities up to snuff or they will have to buy permits to offset their emissions, says Rys from the NFIB.

—Write to Diana Ransom at dransom@smartmoney.com

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