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Bush Makes Truck Stop For Tax Cuts

George Bush
CBS
Declaring that small business is incredibly important to job growth in America, President Bush defended the tax cuts in his economic stimulus plan during a stop at a trucking firm in St. Louis.

The president spoke of the impact his tax cuts will have on a small businessman named Joe, reports CBS News Correspondent Mark Knoller.

"It makes his customers more likely to buy a product, and when Joe's customers are more likely to buy a product, he's more likely to be able to employ people," Mr. Bush said.

"In order to make sure people can find work, we've got to strengthen our small business environment," Mr. Bush said.

And in a shot at Democratic critics of his plan, the president charged they were using "typical class warfare rhetoric to pit one group of people against another."

Mr. Bush wants to accelerate individual income tax rate reductions Congress passed in 2001, some of which are phased in over the course of a decade.

The White House seemed to be itching to confront critics who charge his plan is tilted to the rich. Mr. Bush deliberately included in a closed-door meeting here some well-off people alongside the workers at a company he visited.

"This is because the president believes that all Americans who pay income taxes deserve income tax relief," White House spokesman Fleischer said. "Small business owners plow their profits back into the business which helps create jobs for American workers. This is our approach to those who offer class warfare in response to the president's proposal for economic growth."

But a new poll poll published Wednesday found most Americans think his economic growth plan mostly benefits the wealthy.

The ABC News-Washington Post poll found 61 percent of respondents believe Mr. Bush's new tax-cut plan favors the wealthy. The poll also found that doubts about the Bush plan are more than mere partisan sniping. For the first time in this poll, a majority disapproved of his handling of the economy, with 43 percent approving and 53 percent disapproving.

Mr. Bush chose JS Logistics, a trucking, courier and warehouse business here, as the site for his latest push.

The event took place on a brightly warehouse floor piled on all sides — and behind the president — with cardboard boxes. Frigid temperatures inside rivaled those outside and had most audience members electing to keep their overcoats and gloves on.

JS Logistics is a $25 million business that exemplifies the kind of firm the White House says would benefit if Mr. Bush's $674 billion plan is enacted.

Company co-owner Greg Hantak said the president's proposals would benefit his business in two ways. First, the plan proposes to accelerate personal income tax cuts now set to take place later in the decade, a step the White House argues would allow small firms to plow money back into their businesses; second, the plan includes a higher cap on expenses that small businesses can deduct in one year.

Mr. Bush would allow small businesses to write off three times as much for new technology, machinery or other equipment, for exemptions up to $75,000 as long as the total purchases don't exceed $400,000. The write-off would be indexed to inflation in future years. Now, businesses can exempt $25,000.

White House officials said JS Logistics was also chosen because it is organized as an "S" corporation — a name that comes from a subchapter in the tax code.

Unlike regular "C" corporations, "S" corporations pay no corporate taxes. Income flows directly to shareholders, who report it as individual income. So Mr. Bush's accelerated income tax cuts would help these business owners keep more money, which Bush says would spur the economy.

Mr. Bush is establishing a new pattern in his travels: In the middle of each week this month, he has gone to a state critical to his re-election to seek support for a domestic-policy initiative.

On Jan. 7 he went to Illinois, a state he lost in 2000, to unveil his new tax-cut proposal; Jan. 16 it was Pennsylvania, another state he lost, to promote medical malpractice caps.

He won Missouri by about 79,000 votes and it is among the states he has visited the most. Wednesday was Mr. Bush's ninth trip to the state as president.

Mr. Bush is confronting surging federal deficits by proposing to dramatically slow the growth of federal spending.

He will propose boosting overall spending for federal agencies next year by 4 percent, less than half the increase expected this year, the White House budget director said Tuesday.