“Tax relief puts money into the pockets of those who are hiring new people,” President Bush said Monday while standing in front of a giant crane at CraneWorks equipment rental company in Birmingham, Alabama.
During the visit, Bush promoted his $1.7 trillion in tax cuts, which are supposed to help small businesses. Bush chose to make his speech at CraneWorks because it is a company that has both increased its work force and its sales, and has benefited from tax cuts. Owner David Upton said Bush has helped his business thrive.
“It really helps having a president who is business friendly,” Upton told the Birmingham News. “It gives business owners the confidence to invest.”
According to the Bush plan, the more a company invests, the more it will save in taxes. If a small business with annual revenues of $6.5 million invests $3 million each year, it would save about $100,000 in taxes annually.
“When we cut individual taxes, it’s really a cut for small business,” said Bush in his speech. “It means small business owners have money to invest.”
One part of Bush’s plan that will especially help contractors and small business owners is the Jobs and Growth Tax Relief Reconciliation Act. If new equipment is bought between May 5 of this year and Dec. 31, 2004, owners can depreciate 50 percent of the cost of the new equipment for the tax year in which they started using it.
For example, if a contractor purchases a new skid steer this month, he or she can depreciate half the cost of the skid steer starting this tax year. For a $100,000 machine that has a six-year depreciation life, $60,000 should be depreciated during the first year.