U.S. Sen. Martha McSally (R-AZ) on July 30 proposed legislation that would permanently allow a tax deduction at the time an investment in qualified property is made to remove tax barriers and spur U.S. economic growth.
Sen. McSally cosponsored the Cost Recovery and Expensing Acceleration to Transform the Economy and Jumpstart Opportunities for Businesses and Startups (CREATE JOBS) Act, S. 4376, with bill sponsor U.S. Sen. Ted Cruz (R-TX), which aims to reform expensing under the U.S. tax code.
“As we continue to confront the coronavirus and its economic impacts, I’m working to implement policies that encourage investment in our country,” Sen. McSally said. “Our bill does this by removing unnecessary tax barriers, which will incentivize American businesses to expand or bring their manufacturing and research and development back home.”
If enacted, S. 4376 also would “update provisions from the Tax Cuts and Jobs Act that are set to expire in the coming years to encourage economic growth through the end of the pandemic and beyond,” she added. “By doing this, we will help restore the booming economy that was realized prior to the pandemic.”
Specifically, S. 4376 would apply neutral cost recovery to rental units and commercial structures, make permanent the bonus-depreciation provisions of the Tax Cuts and Jobs Act, and preserve full expensing for R&D spending, according to a bill summary provided by Sen. McSally’s office.
Removing tax policy barriers can help businesses and individuals invest, work, create jobs, and lift the economy during a post-pandemic recovery without requiring lawmakers to create a new spending program, according to the Tax Foundation in an April report.
“One of the most cost-efficient options available to lawmakers is to make permanent and expand the full expensing of capital investment,” foundation experts wrote, noting that such provisions would increase long-run GDP by 5.1 percent, increase wages by 4.3 percent, create over one million full-time jobs for American workers, and help keep the United States on the leading edge of innovative research.