Tax Breaks and Benefits in U.S.

With the passage of the recent tax law now ready for signature by President Bush, there truly is something for everyone, from business owners, senior citizens and working families in this legislation. Under the new law, small business will be allowed increased expensing for equipment purchases and related depreciation deductions, thus allowing small firms to expense $100,000 (from $25,000) through 2009.

The tax bill will extend the life of the 15 percent rate of tax on most capital gains and qualifying dividends for two years until the end of 2010, preventing a tax increase at the start of 2009. A sizable percentage of taxpayers who claim dividend and capital gain income are in fact over age 55, and the majority of taxpayers over age 55 claim some form of capital gains or dividend income.

President Bush has been quoted as saying, "I applaud the Senate for passing important tax relief that will help keep our economy strong and growing." The President has for many weeks been pressuring Capital Hill lawmakers to reach a deal, which included the investment tax cuts, despite their cost in terms of revenues. "This legislation prevents an enormous tax hike that the American people do not want and would not welcome. The bill will extend policies that have helped our economy flourish."

                                 

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