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National Business News

House of Representatives Clears $287B Tax Break for Business

White House threatens to veto legislation, calling it “corporate giveaway.”

By Blake Olmstead, SBJ Managing Editor

July 16, 2014  – The Association for Convenience & Fuel Retailing (NACS) reported last week that Republican tax writers in the U.S. House Ways and Means Committee agreed on a $287 billion tax break for business write-offs yesterday, beating back Democratic protests that the extension was both fiscally reckless and pointless, according to a report from The Hill.

The House Ways and Means Committee cleared a permanent extension of the tax break, known as bonus depreciation, along with five other provisions related to charitable giving. In June, NACS signed on to a letter to members of Congress in support of H.R. 4457, America’s Small Business Tax Relief Act, permanently extending small business expensing for equipment and property.

Ways and Means Committee Chairman Dave Camp (R-MI) said the measure is built on his approach of extending important tax preferences for the long term, and would give an “incremental” boost to his broader goal of tax reform. Bonus depreciation and three of the charitable provisions were among the more than 50 tax breaks, commonly known as extenders, which expired at the end of 2013.

Unlike Camp, Senate Finance Committee Chairman Ron Wyden (D-OR) is pushing to extend most of those preferences for two years, which is more in line with how Congress has generally handled the incentives, according to The Hill.

Under bonus depreciation, companies are allowed to tack an extra 50% on top of the normal write-offs they are allowed for certain capital investments. The tax break was first put into place two separate times by the George W. Bush administration after the 9/11 attacks and as the economy floundered in 2008. Bonus depreciation was then extended under President Obama's watch.

On Thursday July 10th, the committee also restored tax breaks for landowners who conserve their land, people who donate to charity from retirement accounts and companies that donate food to charities. The panel also cleared two new tax breaks: one to allow taxpayers to deduct charitable donations made until April 15 on the previous year’s tax return, and another that would cut taxes for private foundations.

Business groups like the Chamber of Commerce and the National Association of Manufacturers said the extension of bonus depreciation would “spur much needed economic growth and jobs.”

The White House immediately threatened to veto the legislation, deriding the bill — particularly the bonus depreciation rule — as a “permanent corporate giveaway” that would add $287 billion to the deficit over the next decade.

With a majority vote from the House or Representatives, a final version of the bill will be presented in the last months of the year. 

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