by William McBride
May 08, 2014
Congress is currently debating the tax extenders bill, which is a set of about fifty tax provisions that routinely expire and are then renewed again. The Senate Finance Committee has proposed renewing nearly all of them retroactively to the beginning of this year and through 2015. Many of the provisions reduce taxes on business production, such as the research and experimentation tax credit, while others reduce individual taxes. Some of the items only apply to certain industries, such as the mine rescue team training credit, and as such can be thought of as special interest loopholes. In contrast to many extenders that apply narrowly or are disguised government spending programs, bonus expensing, also known as bonus depreciation, is broadly applicable and has the additional benefit of allowing businesses to more accurately report their incomes. These aspects, combined with its powerful growth effects, makes bonus expensing the most helpful tax extender.