Rep. Chris Van Hollen issued the following news release:
Today Maryland Congressman Chris Van Hollen, Ranking Member of the House Budget Committee, and Ways and Committee Democrats introduced the Invest in America Now Act to extend 100 percent bonus depreciation through 2012, a bipartisan measure to encourage capital investments and job growth. The measure, introduced by Van Hollen and 14 Ways and Means Committee Democrats, is the first in a series of "No Excuses" legislation to promote economic growth that Ways and Means Committee Democrats plan to introduce before the August recess in an effort to encourage House Republicans to finally act on jobs legislation. Given that the bonus depreciation extension has broad bipartisan support there is no excuse for House Republicans not to immediately act on its extension. (BILL SUMMARY BELOW)
"The Invest in America Now Act would encourage businesses to invest in new plants and equipment, which has traditionally enjoyed bipartisan support. We hope our Republican colleagues will join us in this measure to boost our economic recovery," said Van Hollen. "Paying for it by ending oil and gas subsidies simply makes the most sense - it would end a tax subsidy that does nothing to increase job growth in order to extend one that will help put Americans back to work. This legislation will help create jobs by boosting business investment in a way that won't add to the deficit, and there are no excuses for not moving it forward."
"There's no excuse for Republicans not to act on this and other proven, bipartisan measures to spur job growth," said Michigan Congressman Sander Levin (D-MI), Ways and Means Committee Ranking Member. "This bill would extend the ability of businesses large and small to fully write off their investments in machines, software, equipment and other property they would normally have to depreciate over many years. This means small businesses will have more cash to make additional investments or hire additional workers. It's time for Congressional Republicans to finally turn their focus toward jobs legislation and this measure gives them an easy opportunity to do something both parties support."
"We need to act now to get this economy running again," said New York Congressman Charlie Rangel. "The Invest In America Now Act is based on a bipartisan idea--and this is the beginning of a full-court press on jobs bill. In the coming weeks, my Democratic colleagues and I will be working hard on introducing legislation designed to increase employment. Right now, we have one thing on our minds: jobs, jobs and more jobs."
"This bill can be passed tomorrow if our Republican colleagues would stop playing politics and start focusing on measures that would actually help the American people," said Washington Congressman Jim McDermott. "This legislation, supported by Republicans in the past, does just that. It frees up capital for businesses to invest and create jobs without adding a single penny to the deficit. Millions of Americans struggle daily as Republican leaders stay focused on their goal of defeating the President. The American people deserve better and that's why I urge my Republican colleagues to pass this bill now."
"We've got to do everything we can to support small businesses, which drive our economy by creating two out of every three jobs right now," said Wisconsin Congressman Ron Kind. "Bonus depreciation allows businesses to keep more money in the bank, freeing up capital for growing and hiring and creating local jobs now and in the long run. The extension and expansion of this provision has bipartisan support and is a good investment in America's future."
"Even as we see signs that our small businesses, our determined workforce, and our innovative entrepreneurs are starting to turn our economy around, far too many in Nevada are still hurting," said Nevada Congresswoman Shelley Berkley. "This is why the Invest in America Now Act is a crucial step forward in helping Nevada small businesses put people back to work."
"We must do all we can to give businesses the confidence and certainty needed to grow and hire, and the Invest in America Now Act will do just that," said New York Congressman Joe Crowley. "If we're going to get our economy moving on all cylinders, it has to be a joint effort. Unfortunately, Democrats are walking this jobs path alone at the moment. It is time for Republicans to join us in working to put America back to work. This legislation, which has historically had bipartisan support, can be the first step. The question is: will Republicans finally join us?"
Summary of the Invest in America Now Act:
The Invest in America Now Act, H.R. 5974, extends 100 percent bonus depreciation through 2012. One hundred percent Bonus depreciation is a bipartisan provision that, before it expired at the end of 2011, gave businesses an incentive to make major capital investments now by allowing them to write off the entire cost of a major purchase in the year it is made rather than depreciate those expenses over many years. It benefits over two million businesses. The Treasury Department estimated when bonus depreciation was originally expanded to 100 percent in 2010 that it could support up to $50 billion in new investment. The Invest in America Now Act would offset the cost of this incentive by repealing the Section 199 manufacturing deduction for the Big Five oil and gas companies.
Extending 100 percent bonus depreciation has broad bipartisan support and there is no reason for House Republicans not to move the legislation immediately. An extension of 100 percent bonus depreciation - which expired at the end of 2011 - was included in the President's budget, the Majority's December 2011 payroll tax bill, and in Rep. Pat Tiberi's H.R. 4196, a bipartisan bill to extend bonus depreciation that has 48 Democratic and Republican co-sponsors. The provision is also included in Sen. Reid's Small Business Jobs and Tax Relief Act of 2012.
"Enacting this legislation will enable businesses to access capital for immediate investment and create jobs in the United States now," a group of 79 American companies and associations wrote in a letter to leaders of the House and Senate on June 1, 2012 urging action on H.R. 4196, whose central measure was an extension of bonus depreciation. "Because of the importance of this legislation to U.S. economic growth and competitiveness, we strongly urge you to support immediate action on this pro-growth, pro-jobs legislation."
Extends 100-Percent Depreciation Deduction For Certain Property. Typically, businesses' expenditures are tax deductible in the year in which they are made, except for major purchases (such as large equipment or buildings), which must be written off over many years. One hundred percent depreciation - also known as "bonus depreciation" or expensing - allows businesses to write off the entire cost of major purchases in the year they are made rather than depreciate those expenses over many years. By accelerating in time the recovery of investment costs through bonus depreciation, additional first-year deductions for new investment lower the after-tax costs of plants and equipment. This encourages new investment and promotes economic recovery. The Invest in America Now Act would extend 100 percent first-year depreciation for one year, effective for qualified property acquired and placed in service between January 1, 2012 and January 1, 2013 (or until January 1, 2014 for certain longer-lived and transportation property).
Bonus Depreciation is a Bipartisan Approach to Growing the Economy. Bonus depreciation has traditionally garnered bipartisan support:
The Job Creation and Worker Assistance Act of 2002 was introduced by House Republicans. It passed the House 417-3.
The Tax Relief, Unemployment Compensation Reauthorization and Job Creation Act of 2010 expanded bonus depreciation to 100 percent. The bill was passed in the House by a vote of 277-148.
Last December, the House Republicans overwhelmingly voted for an extension of 100 percent bonus depreciation in H.R.3630.
In March, Rep. Pat Tiberi introduced H.R. 4196, which has 48 Democratic and Republican co-sponsors.
Bonus Depreciation is a Proven Way to Help Small Businesses Invest and Grow. According to the U.S. Department of the Treasury's Office of Tax Policy, extending bonus depreciation will provide a tax cut to over 2 million businesses. In addition, the analysis estimates that 100 percent expensing reduces small businesses average cost of capital across all investment by more than 75 percent.
Economists Consider Bonus Depreciation One of the Most Productive Ways to Boost GDP. There is substantial empirical evidence that accelerated depreciation boosts business investment. For example, an analysis by the Institute for Policy Innovation estimated that every $1 of tax cuts devoted to accelerated depreciation generates about $9 of GDP growth.