Government Affairs | |||||||||||||
Economic Plans Offer Tax Breaks, Help for Businesses | |||||||||||||
by Tracy F. Ostroff Associate Editor |
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President Bush and Congressional Democrats have offered separate plans in recent weeks to help stimulate the nation’s economy, both of which focus on tax relief for individual investors. While the proposals target personal income tax relief, a few provisions may spark particular interest for firms and architects looking for ways to manage their expenses. White House officials say the president’s 10-year, $647 billion economic package will pump up and reinforce the economy, creating more jobs and opportunity for American investors and businesses. To stimulate investment in business equipment and technology, it would raise the $25,000 cap on write-offs for new equipment purchases to $75,000, a notable increase targeted at small businesses. The administration’s plan also offers tax credits for children and accelerates individual tax rate cuts, slated to be phased in between 2004 and 2006, and makes them effective this year and retroactive to January 1, 2003. The Democrats have issued their own $136 billion stimulus package highlighting tax relief to individuals, investment incentives for small businesses, and billions of dollars for highway construction and one-time grants for homeland defense projects. The plan put forth by House minority Leader Nancy Pelosi (Calif.) would allow small businesses to double the amount they can deduct from income this year for the cost of new investments—from $25,000 to $50,000. To spur more spending on new physical plant and equipment this year, Democrats want to restructure the bonus depreciation schedule Congress put in place last year, permitting firms to write off a 50-percent bonus in 2003, which would drop to 10 percent in 2004, another boon for small business. State
budget woes continue State and city officials also said they feared that eliminating dividend taxes would shift investments away from tax-free municipal bonds and toward stocks. State budget analysts say this would be particularly devastating for states, because these bonds help local and state governments finance costly transportation, school construction, and other infrastructure projects. Vice President Dick Cheney, speaking at the U.S. Chamber of Commerce in Washington, D.C., this week countered their worries. Our “Council of Economic Advisors projects that the president’s job and growth package will increase our gross domestic product by four-tenths of a percent this year and 1.1 percent next year, boosting annual state revenues by some $6 billion. And these greater revenues will more than offset the revenue states lose from the dividend exclusion.” AIA leadership attended the vice president’s briefing. New concerns about taxes, fees The AIA Government Affairs staff will continue to monitor federal and state proposals of interest to AIA member firms and architects. For more information, send an e-mail to govaffs@aia.org. Copyright 2003 The American Institute of Architects. All rights reserved. |
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