U.S. Rep. Pat Tiberi (R-OH) introduced legislation on Thursday that aims to provide a climate of certainty for employers so they can prosper and hire more workers.
Congressman Tiberi’s bill, H.R. 2510, would assist business owners in gaining better access to capital, investing in new facilities and creating new jobs for Americans by permitting businesses to deduct 50 percent of the cost of any new equipment purchases and certain property improvements from income taxes immediately. Businesses must wait several years to depreciate the cost through the traditional tax method. The measure also removes several currently imposed restrictions on tax credits so that they can be used for capital reinvestment, ensuring more companies can realize the benefits of the bonus depreciation deduction.
“This is about providing the opportunity for employers to grow their businesses and hire more workers by providing certainty in the tax code,” Tiberi said. “Time and again, Ohio employers have told me that the ability to immediately deduct half the cost of qualified purchases frees up more money to invest in their businesses. It only makes sense that making this deduction permanent allows employers to effectively plan for their future needs and incentivizes them to grow and create jobs.”
The Tax Foundation recently released a report that said implementing the bonus depreciation benefit permanently would result in the creation of over 200,000 new jobs, increasing federal revenue by $23 billion per year and resulting in a 1 percent boost in the nation’s overall economy.
Bonus depreciation is a popular concept among many business and retail organizations. The Heritage Foundation said that “bonus depreciation – better known as 50 percent expensing – reduces the tax bias against investment” and that making it permanent “would be a major step toward true tax reform.” Additionally, the National Retail Federation has said that bonus depreciation would result in such an incentive for investment that it would “help spur our sluggish economy.”