By Beth Healy

US Senator John F. Kerry yesterday proposed tax cuts that could save small businesses as much as $20 billion over the next decade, arguing that President Bush's tax-cut package offers no stimulus for the economy.

The bill comes two weeks after the Senate agreed to less than half the $726 billion in tax cuts Bush had proposed. Kerry was among those who voted to keep the tax package at $350 billion.

Kerry, a Massachusetts Democrat who is running for president, included in his tax proposal several measures to simplify and lower taxes for small businesses. The bill would raise the limit on expenses that small companies can write off; create an optional standard expense deduction in lieu of itemizing; and permit self-employed people to deduct the cost of their health insurance - an area of growing urgency to sole proprietors. Other changes include introducing income averaging for fishermen and changing the depreciation rules for computers and software.

"Few of the proposals offered by President Bush will truly stimulate the economy or be helpful to the millions of small businesses that need help making ends meet," Kerry said.

Officials at the Senate Finance Committee, which handles tax bills, were unavailable for comment yesterday. The Bush administration has said its tax package will help the economy by trimming the marginal tax rate, by eliminating estate taxes, and by cutting taxes on stock dividends. But critics say those cuts will only help the wealthy.

Michael Widmer, president of the Massachusetts Taxpayers Foundation, said, "The Bush package really provides very little economic stimulus."

Kerry said his cuts were aimed at "trying to help the greatest number of people at the least cost, because we have a deficit."