Federal tax cuts

Recent economic indicators show the U.S. economy is improving, in part due to Bush's tax plan. New figures released Dec. 5 show 57,000 new jobs were created in November and 328,000 jobs have been added over the last four months the most robust four-month job growth recorded in nearly three years. Additionally, the unemployment rate has dropped to 5.9 percent.

But maybe the strongest economic indicator is the 8.2 percent growth the gross domestic product experienced in the third quarter 2003. America's economy has not grown at a rate that strong in 20 years 2003, the Commerce Department reported.

Goals set forth by Bush through the tax plan include:

create more than 1 million jobs by the end of 2004;

pump $200 billion into the economy;

reduce taxes by $1,126 on average to 91 million taxpayers; and

provide tax relief of $2,209 on average to 23 million small-business owners.

The tax plan's highlights for businesses include:

Expense allowance (Section 179): raises deductions from $25,000 to $100,000 on purchases of tangible personal property; expires in 2005.

Bonus depreciation: allows businesses to deduct 50 percent of property purchased beyond $100,000 of the expense allowance; expires in 2004.

Net operating loss carryback: extends the five-year net operating loss carryback for three years; expires in 2005.

Capital gains and dividends: reduces tax rates to 5 percent for taxpayers in the lowest brackets and 15 percent for all other taxpayers; also eliminates double taxation on corporate dividends; expires in 2008.