During the week of July 7, the House of Representatives is expected to vote on a bill – H.R. 4718, sponsored by Rep. Pat Tiberi (R-OH) – that would restore and make permanent the 50 percent first year expensing provisions that have been in effect for the past several years (until they expired at the end of 2013). Allowing companies to write off half of the cost of their capital investments in the same year that the investment is made will go a long way towards ensuring that companies of all sizes can make the best business decisions for their specific business situation and not be paralyzed by constant on-again off-again pro-investment tax policies.
For example, let’s say that a manufacturer needed to invest a significant amount of their budget into the acquisition of some fixed assets (such as automated manufacturing equipment) in order to remain competitive with foreign competitors. H.R. 4718 would make it easier for such a company to make that investment so that they can stay competitive and continue to add new jobs.
In fact, that’s exactly the kind of investment our company, Marlin Steel, made when we acquired the automated manufacturing machines we use to precision engineer wire forms such as material handling and parts washing wire baskets. With this investment, we were able to open up new markets and grow jobs at a time when we were faced with the very real threat of extinction.
If passed, this resolution can help countless other small businesses make similar investments more readily, growing jobs and keeping American companies competitive.
Other Benefits of H.R. 4718
H.R. 4718 also allows companies that have Alternative Minimum Tax (AMT) credits to use those in lieu of taking the 50 percent first-year expensing. In the absence of comprehensive tax reform, manufacturers need critical pro-investment tax policies enacted permanently to allow them to plan for future investments based on business need and not on temporary tax policy.
Expensing is not just a matter of timing. By reducing the after-tax cost of investments, policies like H.R. 4718 allow manufacturers to stretch critical resources and make the investments they need to compete in today’s competitive global economy.
Capital investment is the key to economic growth, job creation and competitiveness. Pro-investment tax policies like this will allow manufacturers to better compete, invest and grow as well as helping to drive increased sales of capital equipment. Please contact your Member of Congress today and urge them to vote in favor of H.R. 4718 and support permanent 50 percent first year expensing.