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May 28, 2014 at 10:41 AM
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.
