Economic Stimulus Plan Is a Victory for American Families, Employees and Smaller Businesses

Washington, DC — May 23, 2003 — “The tax cut package approved by Congress is a victory for American families, employees and smaller businesses,” said John J. Motley III, senior vice president of the Food Marketing Institute (FMI), commenting on the economic stimulus plan now heading to President Bush for his signature to enact the law, formally known as the Jobs and Growth Tax Relief Reconciliation Act of 2003.

“The biggest winners are families and family businesses,” he said. “Making the 2001 income tax cuts retroactive to the first of this year will put substantial sums into the pockets of consumers, stimulating spending. Family businesses, most paying company taxes at personal income tax rates, can use the savings to create jobs, expand and compete more effectively.”

“This plan will produce a bigger economic bounce than many people may realize,” he said. Smaller food retailers, with sales of only $25 million, will save $555,750 per year, according to FMI estimates. Larger ones, grossing $500 million, will save $1.1 million per year. “These savings will provide a significant, immediate stimulus for a relentlessly competitive industry. Today, food retailers are compelled to invest as much as possible in technology and new products and services that improve consumer value,” Motley said.

“Retailers will likewise benefit from the increased expensing and accelerated depreciation. The plan quadruples expensing to $100,000 this year through 2005. The ability to immediately expense $100,000 will boost investments in equipment and technology, as will allowing companies to expense 50 percent of the cost of new property and other hard assets in the year they are purchased.

“This measure is sorely needed to bolster our faltering economy and to reinvigorate U.S. job creation, and would not have passed without the tenacious leadership of President Bush.”