With time running out for Congress's special deficit-reduction committee, the two sides Monday were grappling for ways to inch closer on the crucial issue of taxes.

The parties are looking for ways to include smaller tax increases than Democrats had previously sought but more than Republicans want. In addition, Democrats last week proposed keeping upper-income tax rates at 35%, the level set in the Bush-era tax cuts.

Lawmakers are keenly aware of the Nov. 23 deadline to craft a package that would cut the deficit by at least $1.2 trillion. If the supercommittee can't reach agreement, automatic cuts of $1.2 ...