FROM THE OFFICE OF PUBLIC AFFAIRS

 • By accelerating tax reductions that were enacted in the 2001 tax act, the Jobs and Growth Tax Relief Reconciliation Act would provide small business owners with much needed assistance.

• 23 million small business owners would receive tax cuts averaging $2,209.

• Accelerating the reduction in the top marginal rate scheduled to take effect in 2006 (to 35%) to 2003 would help small businesses.

• Owners of flow-through entities, including small business owners and entrepreneurs, comprise two-thirds (about 400,000) of the 600,000 tax returns that would benefit from accelerating the reduction in the top tax bracket scheduled for 2006 to 2003.

• These small business owners would receive 79% (about $9.7 billion) of the $12.4 billion in tax relief from accelerating the reduction in the top tax bracket to 35% from 2006 to 2003.

• The increase in the expensing for new investment would encourage small business owners to purchase the technology, machinery, and other equipment they need to expand. 

• The amount of investment that may be immediately deducted by small businesses would quadruple from $25,000 to $100,000 beginning in 2003.  The amount of investment qualifying for this immediate deduction will begin to phase out for small businesses with investment in excess of $400,000 (doubled from $200,000).  Both parameters are indexed for inflation beginning in 2004.  Computer software would be eligible for expensing.  The provision sunsets after December 31, 2005.