For Immediate Release
Office of the Press Secretary
January 22, 2003
Fact Sheet: Taking Action to Strengthen Small Businesses
Today's Presidential Action
President Bush traveled to St. Louis to discuss how his plan for jobs and economic growth will benefit small business owners. The President called on Congress to move quickly and act on his economic proposals to encourage our Nation’s entrepreneurs, speed up economic growth and generate new jobs for American workers.
By reducing taxes, encouraging investment, and removing obstacles to growth, the President’s plan would strengthen our prosperity – so small business can flourish, and every American who seeks work can find a job. The President’s proposal helps small businesses by:
Speeding up the already approved bipartisan 2001 tax cuts to quicken the pace of the recovery and job creation.
Increasing incentives for small business owners to invest in technology, machinery, and other equipment to help them expand and create jobs, and reducing the cost of capital to help small businesses grow.
Making the end to the death tax permanent so family-owned small businesses, farmers, and ranchers that want to pass along their life’s work to the next generation can have certainty to plan for the future.
Streamlining regulations and working with Congress to pass legal reform to curtail frivolous lawsuits.
The President’s Plan to Strengthen Small Businesses
Small businesses represent more than 99 percent of all employers, and employ more than half the private work force. Small business entrepreneurs create more than two out of every three new jobs and generate about 50 percent of the nation's gross domestic product.
Nearly 40 percent of small businesses are owned by women. Close to 15 percent of America’s small business owners are minorities – and the trend of minority ownership is accelerating. More than three million minority-owned small businesses are providing job opportunities for millions of Americans in thousands of communities across America.
The President is committed to creating an environment where small businesses can flourish. Under the President’s economic plan, entrepreneurs will be able to devote more resources to developing products, growing businesses, and hiring more employees.
A cornerstone of the President’s plan -- accelerating tax reductions that were enacted in the 2001 tax act -- would provide small business owners with much needed assistance. Two thirds of taxpayers who pay the highest marginal tax rates are small business owners who include their profits when they file their individual tax returns. All together, under the President’s jobs and growth plan, 23 million small business owners would receive tax cuts averaging $2,042 this year.
The President’s plan would increase the amount of money small business owners can deduct from their taxes for investment in new equipment, such as machinery and computers. Right now, the maximum deduction is $25,000. The President’s plan would triple that to $75,000 beginning in 2003, and adjust it for inflation thereafter.
The President's plan to abolish the double tax on dividends will help businesses to grow and create jobs by reducing the cost of capital. Most dividends received by shareholders will be tax free. Small businesses that retain corporate earnings will not face capital gains taxes on the increase in the value of the firm from retained earnings that could have been distributed as dividends. This will benefit the owners of 4.1 million small businesses with less than $500,000 in assets, as well as the shareholders of all 4.9 million C corporations.
The President has also proposed making permanent the elimination of the death tax, which will provide certainty for families that want to transfer their family-owned small businesses, farms, and ranches from one generation to the next.
The President will also continue to work to streamline small business regulations and to call on Congress to enact legal reform to curtail the frivolous lawsuits that impose unfair costs on small businesses and their customers.
For more information on the President’s initiatives, please visit www.whitehouse.gov