Americans for Tax Reform sent today the following letter to Senator Richard G. Lugar (R-Indiana):
On behalf of Americans for Tax Reform, I am pleased to support S. 1873, a bill that would allow businesses to continue to expense, rather than depreciate, capital investments for an additional year.
It is clear that the economic policies of the Obama Administration have failed. Rather than providing incentives for businesses to grow, the President has deemed U.S businesses “lazy” and called for higher taxes on them. As a result, our economy continues to struggle, with unemployment hovering over 9%. We cannot continue to wait on President Obama for our economy to grow.
By allowing companies to expense all new capital expenditures, S. 1873 provides an economic incentive for businesses to invest and grow. This change in the tax code benefits businesses by allowing them to write off capital investments in the year they were purchased, freeing up cash-flows immediately that would have been spread out over the life of the asset. The result is that businesses get the full value of their investment from the write-off, rather than having much of it lost to inflation over the subsequent years.
This bill provides a strong incentive for businesses to make the large capital investments that are needed to grow the economy and to make our economy more innovative. Ultimately, to increase our competitiveness we must give our businesses the incentive to compete, and this bill is an important step in that direction.
I urge all senators to co-sponsor S. 1873.