Industry Leaders Praise Passing of Stimulus Legislation, Mfg Boost Seen
Press release from the issuing company
March 15, 2002 -- Hailing the importance of the event, the chairmen of NPES The Association for Suppliers of Printing, Publishing and Converting Technologies, the National Association for Printing Leadership (NAPL) and Printing Industries of America (PIA) have jointly praised President George W. Bush and Congress for enactment of economic stimulus legislation that will provide a vital boost to manufacturers, including the printing, publishing and converting industry.
Reacting to President Bush’s signing into law of the Job Creation and Worker Assistance Act of 2002, chairmen of the three organizations stated on behalf of the 1.1 million workers in their industry that they “commended President George W. Bush’s foresighted leadership in proposing and vigorously working for economic stimulus legislation designed to foster a robust post-recession and post September 11 economic recovery in general, and in particular capital cost recovery tax law designed to stimulate immediate capital investment and encourage planning for long-term economic growth.”
NPES Chairman, David Reny, Vice President and Managing Director, Standard Finishing Systems, Andover, MA; NAPL Chairman, James W. Hyder, President and CEO, Fetter Printing, Louisville, KY; and PIA Chairman, Charles F. Stay, President and CEO, Bert-Co Industries, Los Angeles, CA, also praised the U.S. House of Representatives for enacting four economic stimulus packages over the last five months, and finally credited the U.S. Senate for also passing economic stimulus legislation, making it available for President Bush to sign into law at this critical point in the United States’ economic recovery.
All three chairmen underscored the new law’s powerful expensing provision, which will enable manufacturers to write off in the first year 30% of equipment purchases in addition to the current depreciation schedules covering the remaining 70%. They emphasized that “capital investment has proven to be a vital engine in driving and sustaining a strong and expanding U.S. economy, and that the nascent economic recovery will be strengthened and sustained by monetary and fiscal policy that encourages and supports both immediate capital investment and long-term economic growth.” They also extolled the multiplier effect that the expensing provision will have, noting that it will “enable equipment suppliers to re-tool while at the same time making it easier for their customers in the printing, publishing and converting industry to purchase new and more productive innovative technology.”
The new expensing provision means that NPES, NAPL, and PIA members can now write off 40% of equipment purchases in the first year and 57% in the first two years for equipment currently depreciated over a period of 7 years. This compares with 14% in the first year and 39% in the first two years under current law. These percentages would vary depending on the depreciable life of the asset involved. This temporary tax relief applies to equipment ordered between September 11, 2001 and September 11, 2004 and placed in service before January 1, 2005. The depreciation preference will be removed from the Alternative Minimum Tax through 2004.
The new economic stimulus plan was a scaled down version of the original bill that was first introduced in the aftermath of September 11. This was the fourth economic stimulus package to pass the House and finally the Senate with overwhelming bi-partisan support. In addition to the 30% expensing provision the new law includes:
- A 13-week extension of unemployment benefits to workers who lost their jobs after September 11. Current benefits were slated to expire on March 12;
- A 30-year Treasury interest rate fix;
- Extension of expired tax provisions;
- A change of net operating loss carryback period from 2 to 5 years;
- Corporate AMT relief (depreciation preference removed) through 2004; and
- Relief for New York City.
The business tax cuts are estimated to have a value of $43 billion this year. The unemployment provisions will cost about $8.5 billion this year. NPES is a United States national trade association representing manufacturers and distributors of equipment and supplies used in all segments of printing, publishing and converting. NAPL and PIA are United States national trade associations representing the graphic arts industry.
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