[IMGCAP(1)]As we approach the November elections, the end of the year and the beginning of a new tax season, we’re not much clearer on the fate of the provisions that expired at the end of 2013, aka the extenders, that haven’t yet been renewed.

Among other breaks, these include the deduction for mortgage interest premiums, the deduction for state and local general sales taxes, the above-the-line deduction for higher education, the R&D tax credit, the New Markets Tax Credit, the Work Opportunity Tax Credit, bonus depreciation, and a measure to extend the increase in the maximum amount and phase-out threshold under Section 179. And of course, the three-year depreciation allowance for racehorses.

Although there is clear bipartisan consensus that these measures need to be extended, we very likely won’t see any results until after the midterm elections, and possibly into next year, according to Dean Sonderegger, executive director of product management at Bloomberg BNA, Software Segment.

“The likelihood of anything happening before the elections is very low,” he said. “What happens after then will hinge on what happens in the elections. If the Republicans take control of the Senate, their incentive to negotiate in a lame duck session will be low since come January they will have both houses. Less willingness to negotiate could result in pushing any legislation into 2015, or it could push the Democrats to negotiate more heavily with the Republicans. And President Obama has stated that he would veto any provision that makes the measures permanent unless there’s an offset. It’s possible that the Senate may fall to the Republicans, but not in a fashion that’s veto proof, so the net is that we’re probably looking at something happening in the first quarter of 2015.”

In any conversation about extending the tax breaks that expired at the end of 2013, bonus depreciation is prominent in the mix. Yet it may not be all that important as an economic stimulus to the companies that utilize it, according to Sonderegger.

“As Congress continues to debate the future of these breaks, it’s important to look at how exactly they affect corporate and, consequently, economic growth,” he said.

In a recent Bloomberg BNA survey of 100 tax and accounting leaders at U.S. businesses with revenues of $500 million and more, 83 percent of respondents said that the expiration of Section 179 enhanced expensing and bonus depreciation has not impacted their organizations’ capital expenditures this year.

“Bonus depreciation and Section 179 expensing, while welcomed by the business community, are not viewed by a majority of the community as an economic stimulus that drives business decisions,” said Sonderegger.

Key findings of the survey include:

• 55 percent of respondents report that their organizations’ capital expenditures have increased since the recession;

• 30 percent of tax and accounting leaders feel that the current tax policy climate stifles their firms’ willingness to make capital expenditures;

• More than half of respondents feel that their firms’ capital expenditures would not increase, even if available tax breaks reduced their total cost of capital by 10 percent.

“There is a sizeable minority—30 percent—that do feel changes in tax policy would make it more favorable for them to invest,” Sonderegger observed. “However, the lack of bonus depreciation is not the factor that would affect their willingness to invest.”

The study concludes that, despite other positive economic indicators such as rising consumer spending and falling unemployment rates, corporate capital expenditures have yet to experience a dramatic jump. The majority of survey respondents—51 percent—expect their firms’ capital investments to remain the same through fiscal year 2014.

“On the surface, U.S. businesses’ capital expenditure levels may seem sluggish,” said Sonderegger, “but tax extenders legislation, even if passed, will not necessarily be the boost that businesses have been waiting for to jumpstart capital spending.”

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