The House of Representatives could debate and vote Friday on a bill to permanently extend 50% tax deductions for business expenses, or "bonus depreciation."
The bill is HR 4718. A Congressional Research Service study earlier this week downplayed the significance of bonus depreciation in compared to other tax cuts of federal spending increases. Nonetheless, business groups are strongly supporting the bonus depreciation bill.
The White House issued a statement opposing the bill, stating bonus depreciation was considered a short-term stimulus in 2009 and never considered, "and it was never intended to be a permanent corporate giveway." Further, the White House stated the bill has no offsets and would add $287 billion to the deficit over 10 years, "wiping out more than one third of the deficit reduction achieved by the American Taxpayer Relief Act of 2013."
The Joint Committee on Taxation in May projected the bill would add $262.9 billion to the federal deficit over 10 years.
The Tax Foundation, however, maintains that extending bonus depreciation boosts GDP by more than 1%, boosts capital stock, increases wages and creates more than 200,000 jobs. The Tax Foundation also argues the provision increases federal tax revenue collected by $23 billion because of the resulting economic activity.
Follow me on Twitter @ChrisClaytonDTN
© Copyright 2014 DTN/The Progressive Farmer. All rights reserved.