The U.S. House of Representatives passed a bill on Friday that would make a temporary tax break a permanent part of the tax code. The bill is seen as a boost for businesses, but also a drag on taxpayers.
The bill is an attempt to resurrect a tax break for businesses that, along with dozens of others, expired at the end of last year. It previously allowed a company to immediately write off half the cost of pretty much any capital investment they made, from heavy machinery to apple trees. Typically, businesses make these write-offs over the estimated life of the capital investment, usually several years.
The tax break, called bonus depreciation, was used to free up cash for businesses during the economic slump starting in 2009.
Some Congressional lawmakers, mostly Republicans, are now trying to bring it back indefinitely, saying it's a much-needed boon for business investment and job growth.
But it also could add $287 billion to the federal deficit within the next 10 years, according to a study in May by the Joint Committee on Taxation. That's a big reason why the White House has threatened to veto the bill, saying the tax break wasn’t supposed to be a “permanent corporate giveaway.”
Three of Arizona’s nine Representatives — Ed Pastor, Ann Kirkpatrick and Raul Grijalva — voted against it.
Rep. Kyrsten Sinema reiterated her support of the legislation in a statement on Friday, saying it would come at a critical point in Arizona’s recovery.
“This reasonable bill lowers the tax burden on new investment and helps firms invest and create jobs in Arizona,” Sinema said. “As Arizona’s economy continues to recover, Congress needs to take action and pass comprehensive tax reform. We need comprehensive reform that provides certainty, encourages job growth, and enables us to compete on a global scale.”
The bill is now on its way to the Democrat-controlled Senate, which is also working to revive the tax break along with several others, but for only two extra years.
