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Take advantage of temporary tax cuts. (Business Topics).

Article Excerpt
Congress has passed and the president quickly signed into law a $350 billion, 10-year tax-cut plan that will significantly affect the tax bills of every metals distributor and their business. The new law largely adopts the House's prescription for trimming taxes on capital gains and stock dividends for at least five years while lowering income tax rates and encouraging business investment.

The legislation contains many of the elements of President Bush's plan for stimulating the U.S. economy, a plan that originally called for $726 billion in tax reductions through 2013. This scaled-back version now cuts taxes by $330 billion for stockholders, individual taxpayers, couples and businesses, while including $20 billion for financially strapped states, a provision that Bush did not seek.

Although the final bill does not contain President Bush's proposals to eliminate the tax that individuals pay on corporate dividends, it will lower the top tax rate on both dividends and capital gains to 15 percent. The current top tax rate is 38.6 percent for dividends and 20 percent for capital gains. Lower-income individuals will pay a 5 percent rate on both.

The new rates apply through 2007; in 2008, the lower rate drops to zero. In 2009, today's higher rates return.

On a personal level, the average taxpayer, including many owners and managers of metals businesses, will find...

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