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The House Committee on Ways and Means plans to mark up on Thursday H.R. 4718, to provide a permanent extension of bonus depreciation, as well as other tax extenders that deal with retirement planning and charitable giving.
In the absence of comprehensive tax reform, the Tax Foundation argues that “a permanent extension” of the bonus depreciation “is the best option to spur investment, lift wages, grow the economy, create jobs and increase federal revenue.”
The Tax Foundation, a nonpartisan think tank, says that bonus deprecation would have a large impact on the economy and, according to the foundation’s analysis, be a revenue gainer in the long term in terms of:
— Growth: Bonus depreciation would grow the economy by 1%. This would add $182 billion to the economy.
— Investment: Bonus depreciation would increase investment by over 3%. Permanently extending bonus depreciation would increase the capital stock (the tools we use to produce) by over 3% by lowering the current cost of investment.
— Wages: Bonus depreciation would increase wages by about 1%, with the largest increase going to those at the bottom.
— Jobs: Bonus depreciation would create 212,000 jobs.
— Revenue: Static revenue estimates are misleading. Bonus depreciation would increase federal revenue by about $23 billion a year in the long run, due to increased economic activity.
The committee also plans to mark up on Thursday the following tax extenders that deal with retirement planning and charitable giving:
HR 4619, “to make permanent the rule allowing certain tax-free distributions from individual retirement accounts for charitable purposes”; HR 4719, “to permanently extend and expand the charitable deduction for contributions of food inventory”; HR 3134, “Charitable Giving Extension Act”; HR 4691, “to modify the tax rate for excise tax on investment income of private foundations.”
-- Check out Top 9 Biggest Tax Scams of 2013 on ThinkAdvisor