WASHINGTON – The Bush Administration’s plan to boost jobs and economic growth is in full swing following the President’s signing into law a $350 billion tax relief package May 28.
According to the National Cattlemen’s Beef Association, the package contains a number of growth incentives and tax breaks that could benefit small businesses, farmers and ranchers.
What’s in it? Primary benefits of the package include:
* Growth incentives for business: Increases the expensing allowance to $100,000 and the phase-out limit to $400,000 for 2003 through 2005.
Provides inflation adjustments in increments of $10,000.
* Reduction in taxes on dividends and capital gains: Reduces, for the regular and alternative minimum tax, the 10 percent and 20 percent adjusted net capital gain rates to 5 percent (0 percent in 2008) and 15 percent, respectively, through 2009.
Taxes dividends received by an individual shareholder from qualified corporations generally at the same rates that apply to capital gains.
Dividends will be taxed at rates of 5 percent (0 percent in 2008) and 15 percent based on the same wages criteria as capital gains in general.
* Acceleration of certain previously enacted tax reductions: Accelerates the child tax credit phase-in to $1,000 for the next three years and then returns the level to the current $600 in 2005.
Accelerates the increase in the 15 percent bracket for joint filers to twice that of single filers to make such increase applicable to 2003 and 2004.
Accelerates the increase in the standard deduction for joint filers (marriage tax penalty) to twice that of single filers to make such increase applicable to 2003 and 2004.
Revises the expansion of the 10 percent bracket for married taxpayers filing jointly scheduled to increase from $12,000 to $14,000 in 2008 to take effect in 2004 and indexes them for inflation, then expires in 2005 unless extended.
Accelerates to 2003 individual income tax rate reductions scheduled to begin in 2006.
Increases the $49,000 and $35,750 alternative minimum tax exemption amounts to $58,000 and $40,250, respectively.
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