Bringing Certainty to Tax Policy
by Randy Neugebauer on January 15, 2014 at 9:24 AM
Recently, I’ve been getting questions about expiring tax laws and what that means for local businesses. One deduction in particular helps businesses invest in new equipment and increase jobs and economic growth. The Section 179 deduction allows business owners to purchase new equipment and deduct the entire depreciation amount in a single year. For instance, the lifetime depreciation of a tractor could be deducted entirely during the year of its purchase, making the purchase more affordable. When businesses invest in new equipment, that creates jobs across the economy. So I’m a strong supporter of this tax policy.
Unfortunately, Section 179 is one of many short-term tax policies that expire every few years. That’s problematic because it doesn’t give businesses much certainty when planning ahead. In years past, Congress has renewed tax extenders after they’ve expired, and made sure that they were retroactive so there wasn’t a gap in these tax policies. But how do you think that affects businesses making plans right now? Would you invest in new equipment if you weren’t sure how it would be taxed this year? Probably not.
That’s why I’m advocating for comprehensive tax reform that gives families and businesses certainty. We need to make sure our tax policy is designed to encourage economic growth. And we need a system that is simple, transparent, and easy to understand. I’ll keep working on your behalf to make that a reality.