HERMITAGE English discusses new jobs provision

The tax break will encourage companies to create jobs, English said.
By HAROLD GWIN
VINDICATOR SHARON BUREAU
HERMITAGE, Pa. -- A provision written by U.S. Rep. Phil English of Erie that would expand the tax write-off for companies investing in jobs and new equipment is part of the proposed Growth and Jobs Act of 2003.
Calling the provision "a legislative victory for manufacturing," English, R-3rd, said companies that invest in updating equipment will be able to deduct 50 percent of that cost in the first year.
That would free up capital to invest in jobs, he said, outlining the plan in a press conference at Joy Cone Co. on Lamor Road on Monday.
Vote scheduled
The bill will come up for a vote before the House Ways and Means committee today and go before the full House later this week, English said. It then goes to the Senate, and English said he is hopeful it will become law within a couple of months.
Manufacturers are allowed to write off 30 percent of new equipment purchases in the first year, a provision put into place in the last federal economic stimulus package that will expire in 2004.
English, a leading advocate for allowing capital equipment write-offs as incentives for business, had introduced his own bill earlier this year to allow a 100-percent write-off in the first year.
With the current tax-cut legislation package set at $550 billion, the write-off would be limited to 50 percent, he said.
"This is really a jobs bill," English said, noting economic forecasters predict it will lead to the creation of between 600,000 and 700,000 jobs and significantly speed up the economy.
That added growth will likely cut the actual cost of the tax package in half, he predicted.
The break for manufacturers is just a part of the tax-cut package contained in the bill.
More provisions
Some other provisions are:
UReduce the capital gains tax rate on dividends and capital gains to 5 percent for taxpayers in the lowest tax brackets and to 15 percent for all others.
UIncrease the amount of capital equipment write-offs for small businesses from $25,000 to $75,000 a year.
UImplement the proposed 2006 individual income tax rate this year, cutting the 39.6-percent rate to 35 percent, the 36-percent rate to 33 percent, the 31-percent rate to 28 percent and the 28-percent rate to 25 percent.
UIncrease the child-care credit to $1,000 for 2003-05.
UReduce the marriage penalty by expanding the 15-percent tax bracket and increasing the standard deduction for married people for 2003-05.