Tax bill provides incentive for equipment orders

摘要

President Bush's jobs and economic growth tax relief bill, just passed by the U.S. Congress, contains a new 50 percent expensing allowance for machine tools and other equipment ordered between May 6, 2003, and Dec. 31, 2004, and placed in service by Dec. 31, 2004. This replaces the temporary 30 percent allowance enacted in 2002. House Ways and Means Committee Chairman Bill Thomas, R-Calif., Senate Finance Committee Chairman Chuck Grassley, R-Iowa, Jerry Weller, R-III., and Phil English, R-Pa., were leaders in the effort to enact the new allowance. It is part of a dollar 350 billion, 10-year jobs and economic growth tax cut that also quadruples the dollar 25,000 small-business expensing allowance (Sec. 179) through 2005; cuts the individual tax rate for dividends and capital gains to 15 percent (5 percent for low brackets) through 2008; advances the effective dates of the 2001 individual rate cuts and credits to 2003 (thus providing an immediate 35 percent top tax rate for S-corporation shareholders); and provides dollar 20 billion in aid to state and local governments.