House Committee Approves Permanent Depreciation Tax Break

By Dow Jones Business News, 
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By John D. McKinnon

WASHINGTON--The HouseWays and Means Committee voted Thursday to revive and make permanent a big depreciation tax break aimed at encouraging business investment.

The proposal, which allows businesses to deduct 50% of many capital purchases up front, was approved by a vote of 23-11 along party lines. It now goes to the full House, where it is expected to pass. But its ultimate fate is less certain, as Congress wrestles with the future of a long list of temporary tax breaks, most of which expired at the end of 2013.

Congress at some point this year is likely to pass an extension of most or all of them, including the bonus depreciation break. But a Senate proposal would extend them only for only two years.

By contrast, House Republicans, led by Ways and Means Chairman Dave Camp (R., Mich.), are hoping to put the most important tax breaks on a permanent footing, to give businesses--and budget planners--more clarity about the future. Thursday's vote was part of that effort.

Putting the tax breaks on a permanent footing has underscored their high cost to the government, with the depreciation tax break alone accounting for a $300 billion revenue reduction over the next decade.

Write to John D. McKinnon at john.mckinnon@wsj.com


  (END) Dow Jones Newswires
  05-29-141451ET
  Copyright (c) 2014 Dow Jones & Company, Inc.


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