Much Needed Bonus Depreciation Gains Traction
Last week the House Small Business Committee held a hearing on bonus depreciation and its impact on small business. Bonus depreciation simply allows a company to accelerate the amount of depreciation taken in the year purchased by permitting businesses to immediately deduct 50% of the cost of new machinery, equipment and other essential capital investments. As the nation recovers from the economic downturn, an extension will help boost sales for manufacturers of these products and contribute to job creation and overall economic growth.
Chairman Baucus has offered a substitute amendment to the Small Business Lending (and Tax) bill (H.R. 5297), which would extend retroactively bonus depreciation through 2010. This legislation is currently pending on the Senate floor.
In this Association’s opinion, reinstating bonus depreciation will help inoculate the economy against a backward slide in business capital investment in the months ahead, enhance the benefits of other job creation legislation, encourage recovery in fragile, capital-intensive sectors of the economy and, most significantly, put Americans back to work.
Federal Estate Tax Reform
As you are well aware, in January 2011, estate taxes are set to be reinstated at a $1 million exemption with a top rate of 55%; the impact on our industry and all of agriculture will be significant. Although we strongly believe full repeal of the estate tax would be in agriculture’s best long-term interest, we support permanently raising the exemption to $5 million per person and reducing the top rate to 35%. It is imperative that the exemption be indexed to inflation, provide for spousal transfers and include the stepped-up basis.
Estates encompass both liquid and illiquid assets, severely disadvantaging the “land rich” agriculture industry, with families being forced to sell assets in order to pay the estate tax. This ongoing uncertainty of the estate tax has prevented agribusiness owners from being able to properly develop an estate plan. Families have been left guessing on the ever-changing rules when attempting to make plans for the future of their businesses.
We believe the bipartisan reform proposed by Sens. Blanche Lincoln (D-AR) and Jon Kyl (R-AZ) is the only proposal with a chance of passing and it deserves your support.
The Farm Equipment Manufacturers Association encourages members in both chambers and on both sides of the aisle to move forward on extending bonus depreciation and has joined with other associations in urging Congressional leadership to pass both the Bonus Depreciation and Federal Estate Tax Reform before their August recess.
We also encourage you as a member of this Association, to reach out to your elected officials and voice your concerns, now and during the August recess.
Fall Convention In Dallas, Nov. 3-6
So far we are very pleased with the number of members already signed up for our Dallas Fall Convention. Members who would like to reserve one of the limited suites are urged to register today!
Session topics announced include: Making Your Company Easy to Deal With; Effects of Health Care Reform; Dealer Panel Discussion; HR Super Lawyer on Internet Threats to your company’s reputation; When Did Customer Service Die?; and How Tractor Unit Forecast Effect Shortline Forecast. Major speakers also will be announced in the next two issues of the Shortliner.
Register Now! Secured online registration is available at: FarmEquip.org/FC or use the form included with this issue.