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NTU Joins Coalition in Support of Permanent Bonus Depreciation

by Brandon Arnold / /

Dear Senator/Representative

In 2008, a bipartisan Congress tried to jumpstart an ailing economy by implementing an important pro-growth tax relief program known as accelerated expensing, or “bonus depreciation.”  This makes it easier for companies to write off expenses more quickly than they had previously been able to – letting the company account for all or a share depreciation in the first year of a capital expenditure, rather than amortizing it over several years.

Fundamental tax reform that includes full business expensing remains a top priority.  But for the here and now, this program has been a success.  Congress has renewed it every two years—until this year.

We urge you to support the current legislation, H.R. 2510 introduced by Rep. Pat Tiberi (R-Ohio) and S 1660 introduced by Sen. Pat Roberts (R-Kansas), would make permanent the extension of accelerated expensing.  This legislation is an important pillar of a pro-growth tax reform agenda that will create jobs and incent greater investment in infrastructure throughout our economy 

Bonus depreciation encourages investment. Accelerated expensing gives businesses the certainty they need to spend money on capital expenditures in an uncertain economic environment. A recent study out of Harvard and the University of Chicago found that 50 percent expensing raises investment appreciably; sometimes up to 30 percent over a given time period. This makes sense: where normal depreciation schedules allow the company to depreciate the value of an investment over the course of the decade, this legislation allows companies to take that tax write off more quickly, reducing the stated value of the capital expenditure. By guaranteeing that companies can write off the value of an investment sooner, bonus depreciation legislation encourages companies to get those investments done quicker. 

Bonus depreciation builds the economy and creates jobs. Capital investment contributes to economic growth both directly and indirectly. When companies spend money on capital purchases, they not only benefit the recipient of the sale; they also create jobs, stimulate local economies and unleash the power of the multiplier effect. That money goes not just to contractors involved in the project, but is also circulated throughout the local economy as those contractors hire local workers and subcontractors, who then spend that money on local goods and services, and the cycle continues.  

Bonus depreciation moves toward fundamental tax reform. “Full business expensing” is a cornerstone of pro-growth tax reform. Bonus depreciation moves the current tax system more than halfway to full business expensing. Making bonus depreciation permanent would be a massive victory and big step forward towards meaningful tax reform that will help American businesses compete in the face of an increasingly difficult regulatory environment here at home, and the incredibly competitive global marketplace. 

Growing our economy is the only way to create jobs, pay down the debt and ensure our nation’s long term financial security. 

Permanently extending the benefits of bonus depreciation will encourage investment, build the economy and create jobs. We hope you support permanent extension. At the very least, it’s crucial to support S. 1666, the 2-year extension of the 50 percent expensing bill introduced by Sens. Debbie Stabenow (D-Mich.) and Pat Roberts, which will continue our nation's forward-looking policies that encourage investment in new jobs and equipment. 

Sincerely, 
 
David Williams
President
Taxpayers Protection Alliance
 
Seton Motley
President
Less Government
 
Karen Kerrigan
President & CEO
Small Business Entrepreneurship Council
 
Jeff Mazzella
President
Center for Individual Freedom
 
Andrew Moylan
Executive Director and Senior Fellow
R Street Institute
 
Norm Singleton
Senior Vice President
Campaign for Liberty
 
Brent Gardner
Vice President of Government Affairs
Americans for Prosperity
 
Matthew Kandrach
Vice President
60 Plus Association
 
Iain Murray
Vice President
Competitive Enterprise Institute  
 
Brandon Arnold
Executive Vice President
National Taxpayers Union
 
Andrew Langer
President
Institute for Liberty
 
Andresen Blom
Executive Director
Grassroot Hawaii Action
 
Gregory T. Angelo
President
Log Cabin Republicans
 
Mario Lopez
President
Hispanic Leadership Fund
 
George Landrith
President
Frontiers of Freedom
 
Thomas Schatz
President
Council for Citizens Against Government Waste
 
Matt Schlapp
Chairman
American Conservative Union
 
Dan Schneider
Executive Director
American Conservative Union