Helping Small Businesses and Farmers Invest in Growth
by Randy Neugebauer on April 15, 2014 at 9:44 AM
Every week, I hear from farmers, ranchers, and small business owners who are hoping for a simpler, fairer tax code that will help them grow their businesses. Tax reform can help us strengthen the economy and create jobs. How? Well, for one thing, small businesses waste about 1.7 billion hours each year on tax compliance. And small businesses spend more than $18 billion each year on tax compliance costs — not on taxes; on complying with tax policy. Freeing up that time and money allows business owners to invest in new equipment, new employees, and business expansion—and that benefits everyone.
Part of simplifying the tax code is putting an end to temporary provisions that expire after a few years. Temporary policy is problematic because it doesn’t allow businesses to make long-term plans. House Republicans are working on permanent, comprehensive tax reform, but there’s a long road ahead for that policy.
In the meantime, farmers, ranchers, and business owners are struggling because an important tax provision has expired. The Section 179 expensing allowance allows businesses to purchase new equipment and deduct the entire depreciation amount in a single year. For instance, if a farmer buys a new combine, he could deduct its lifetime depreciation from his tax return that same year, which makes the purchase more affordable. With some farm equipment costing hundreds of thousands of dollars, Section 179 expensing gives the farmer the ability to not only improve his or her operation in a fiscally responsible manner, but also to invest money in the local economy.
I want to help our farmers, ranchers, and business owners invest in our local economy, so I sent a letter to House and Senate leadership today urging them to return the Section 179 allowance to its former levels for a minimum of two years. I explained that, “Small businesses drive our economy, and tax policy that encourages growth, investment, and expansion means more jobs for Americans.” You can read the full text of the letter here.