NTU strongly urges all Representatives to vote “YES” on H.R. 4718, which would make permanent bonus depreciation and thereby provide a much-needed boost to our business climate and economy.
Though H.R. 4718 falls short of full business expensing, the legislation would move our outdated tax system in a positive direction by making permanent bonus depreciation and letting businesses expense a full 50 percent of the cost of capital investment within the year it was acquired. Domestic corporations are already at a disadvantage compared to overseas competitors thanks to our record-high corporate tax rate. The current Tax Code adds insult to this injury with lower-than-average capital consumption allowance rates compared with other Organization for Economic Co-operation and Development members. The expiration of bonus depreciation at the end of 2013 pushed U.S. businesses even further behind.
Troubling reports indicating that our economy contracted in the last quarter make it all the more imperative that Congress acts quickly to bolster our business sector. Recent studies from both the Tax Foundation and the Joint Committee on Taxation predict that reinstating bonus depreciation would have a positive effect on Gross Domestic Product and employment. The Tax Foundation’s research also indicates that wages would increase due to additional capital investment. Furthermore, these healthy benefits would enter our economic bloodstream almost immediately.
Roll call votes on H.R. 4718 will be significantly weighted in our annual Rating of Congress and “YES” votes will be considered the pro- taxpayer positions.
If you have any questions, please contact NTU Federal Affairs Manager Nan Swift at (703) 683-5700