House Introduces Extension of 100% Bonus Depreciation
A group of Democrats on the House Ways and Means Committee have introduced a bill to extend 100 percent bonus depreciation through 2012 to encourage capital investments and job growth.
The Invest in America Now Act was introduced Wednesday by 14 Ways and Means Committee Democrats and Budget Committee ranking member Chris Van Hollen, D-Md. House Democrats say it is the first in a series of “No Excuses” legislation to promote economic growth that Ways and Means Committee Democrats plan to introduce before the August recess in an effort to encourage House Republicans to act on jobs legislation. Given that the bonus depreciation extension has broad bipartisan support, they contend there is no excuse for House Republicans not to immediately act on its extension.
“There’s no excuse for Republicans not to act on this and other proven, bipartisan measures to spur job growth,” said Rep. Sander Levin, D-Mich., the ranking Democrat on the Ways and Means Committee. “This bill would extend the ability of businesses large and small to fully write off their investments in machines, software, equipment and other property they would normally have to depreciate over many years. This means small businesses will have more cash to make additional investments or hire additional workers. It’s time for Congressional Republicans to finally turn their focus toward jobs legislation and this measure gives them an easy opportunity to do something both parties support.”
The 100 percent bonus depreciation tax break is a bipartisan provision that, before it expired at the end of 2011, gave businesses an incentive to make major capital investments now by allowing them to write off the entire cost of a major purchase in the year it is made rather than depreciate those expenses over many years. It benefits over 2 million businesses. The Treasury Department has estimated when bonus depreciation was originally expanded to 100 percent in 2010 that it could support up to $50 billion in new investment. The Invest in America Now Act would offset the cost of this incentive by repealing the Section 199 manufacturing deduction for the five largest oil and gas companies.
“Enacting this legislation will enable businesses to access capital for immediate investment and create jobs in the United States now,” a group of 79 American companies and associations wrote in a letter to leaders of the House and Senate on June 1, 2012 urging action on H.R. 4196, whose central measure was an extension of bonus depreciation. “Because of the importance of this legislation to U.S. economic growth and competitiveness, we strongly urge you to support immediate action on this pro-growth, pro-jobs legislation.”