Washington Promoting his tax cut plan, President Bush said Saturday it could help small businesses whose financial health is essential to economic growth.
Bush used his weekly radio address to focus on the part of his 10-year, $674 billion proposal that many economists believe offers some of the best potential for stimulating the economy. Democrats criticize the plan as mostly favoring rich individuals and big corporations.
Bush said elements of the plan were designed with small businesses in mind, adding that those businesses create millions of jobs annually and account for about one-half of U.S. economic output.
"My growth and jobs proposal will encourage America's entrepreneurs and help to reward their efforts," Bush said. "By reducing taxes, encouraging investment and removing obstacles to growth, we will create a platform for future prosperity."
Critics of his plan say it would have a limited impact on small businesses and many owners would get less than the average tax cut of $2,042 that Bush cited in his address.
Analysts at the Center on Budget and Policy Priorities, which focuses on the needs of low- and moderate-income people, say that higher average comes from including wealthy business owners, who have some small business interests.
The administration says that giving such breaks to entrepreneurs and other smaller companies would lead them to expand, adding jobs in their own shops while boosting the broader economy with their demand for products. Bush was focusing on portions of his proposal that make up just 12 percent of the package's total cost.
The smallest item in the package -- at a cost of $16 billion -- would allow small businesses to write off three times more new technology, machinery or other equipment, for as much as a $75,000 exemption as long as the total purchases don't exceed $400,000. The write-off would be indexed to inflation in future years. Now, businesses can exempt just $25,000.
At a cost of $64 billion, Bush also wants to accelerate to this year all the individual income tax rate cuts enacted in last year's tax package and scheduled for 2004 and 2006.