- people on the move
- Click here for COVID-19 updates
Builders Scrutinize Bushs Plan
One sees it as capable of providing direct benefits to the construction industry, while one thinks that some builders will benefit from it more than others.
The Associated Builders and Contractors (ABC) enthusiastically supports the president’s plan. ABC President and CEO Kurt Pickerel feels the package would provide immediate benefits for the economy, while setting the stage for long-term economic growth.
“There are specific elements of this plan that will have a direct impact on construction such as the changes in small business expensing limits that will impact firms’ ability to invest in technology and new equipment to expand the business,” said Pickerel.
Bush’s proposal bumps the annual write-off limit for small businesses from $25,000 to $75,000.
“This in turn has a positive affect on manufacturers, suppliers and others throughout the economy,” he added.
The Associated General Contractors of America (AGC), however, feels the increased business expensing would only affect smaller companies with overall investments of up to $400,000. The group’s Tax and Fiscal Affairs Committee said that amount was small for most construction companies, but added it could help smaller contractors and associate members.
The committee also felt that the president’s plan to eliminate the tax on dividends would have a significant impact on about 60 percent of its members organized as privately held C corporations, as earnings from C corps could be distributed to shareholders without taxing them.
S corps and sole proprietorships, about 40 percent of AGC members, would see some gains from the accelerated decrease in individual income tax rates.
But the AGC had a stronger positive reaction last November to an action by Bush when he signed the terrorism insurance bill into law. AGC CEO Stephen Sandherr remarked the law had the potential to unlock at least $15 billion in construction spending that has been held up since the terrorist attacks.
Sandherr said a lack of affordable terrorism insurance left too many buildings and public places without coverage for potentially devastating losses, and contributed to the downturn in the economy by slowing or canceling billions of dollars worth of construction projects.
“With the signing of this legislation,” said Sandherr, “the construction industry will be poised to aid in the nation’s economic recovery by providing jobs and securing America’s future.”
The AGC represents more than 35,000 companies, while ABC has more than 23,000 member firms.