BUSINESS/TAXES: “Sen. Ted Cruz (R., Texas) will lay down a marker in the tax debate on Wednesday [9-13-17], endorsing full and immediate deductions for capital investment by businesses.
In a speech at a Tax Foundation event, Mr. Cruz will emphasize that such full expensing instead of current multiyear depreciation schedules would make the tax code simpler and direct tax benefits to new investments, according to a person familiar with his remarks. By getting all those deductions up front in the first year instead of over the life of an investment, companies would have a bigger incentive to invest in factories and equipment.
In contrast, lowering the corporate tax rate—which is also a central piece of the emerging GOP tax plan—benefits companies with both newer and older investments.
The fate of full expensing, like the rest of the GOP tax plan, is up in the air as lawmakers begin negotiating the details. The House Republican tax blueprint called for full expensing, but lawmakers may scale that back as they balance competing goals and try to comply with budgetary rules. Money used for full expensing couldn’t also be used for rate cuts.
A July joint statement from the top Republican negotiators in the administration in Congress said only that the plan would strive for ‘unprecedented capital expensing.’ They haven’t defined what that means.”
-Richard Rubin and Sioghan Hughes, “Cruz Wades Into Tax Debate With Focus on Expensing,” The Wall Street Journal online, Sept. 13, 2017 06:00am