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Bush Beats Drum For Tax Breaks

President Bush on Tuesday sought billions of dollars in new tax breaks to spur America's small businesses, arguing that improving the entrepreneurial climate will generate new jobs and help pull the nation from the economic slowdown.

"Small businesses are the paths to success for many Americans — especially women, newly arrived, minority Americans," Mr. Bush said at a conference for female entrepreneurs.

"One of the things this summit recognizes is there has been a fundamental change in our economy. When it comes to entrepreneurship and job creation, ours is an increasingly women's world," Mr. Bush said to cheers from the crowd.

In addition to tax relief, the president also wants the government to encourage small businesses to band together to obtain health care for employees, a move he says would expand coverage to more people and lower business costs.

Mr. Bush would remove regulatory "barriers" he says slow growth; encourage greater competition by small businesses seeking government contracts; and make the government a greater advocate for small businesses when it considers regulatory changes.

"Small businesses embody the American values of hard work, risk-taking and independence," the president said.

Mr. Bush signed a bill earlier this month meant to jump-start the economy through an array of business tax cuts. That came at a time when a growing number of experts concluded the economy already was pulling out of recession.

But with unemployment at 5.6 percent, he is eager to signal his continued attention to Americans still hurting, and to offer fresh proposals to accelerate a recovery.

Mr. Bush revived a proposal to allow small businesses to increase the cost of equipment and machinery that can be deducted in one year from $25,000 to $40,000. It would cost the Treasury $7 billion over a decade, the White House said.

The president also called for a permanent repeal of the estate tax, a move he says would allow small businesses to be "passed from one generation to the next without having to sell assets to pay a punitive tax."

That would cost $104 billion over 10 years.

He said soon-to-be-announced federal accounting rule changes will allow businesses to immediately deduct the cost of supplies and to defer paying taxes until income is actually received.

Mr. Bush would also:

  • Allow associations to pool members to obtain health insurance at lower rates.
  • Lower deductibles and eliminate the cap on the number of tax-preferred medical savings accounts allowed, costing $6 billion over 10 years.

    According to the White House, small and young companies create two-thirds of new jobs, and employ half of all private-sector workers.