WASHINGTON May 29 A U.S. House of Representatives committee on Thursday approved legislation renewing and making permanent a tax break, known as bonus depreciation, that lets businesses immediately depreciate certain new capital and equipment investments.
The bill, estimated to cost to taxpayers more than $260 billion over 10 years, is expected to die in the Democratic-controlled Senate because the Republican measure is not offset by any proposal for new government revenue to pay for it. As a result, it would add to the federal budget deficit.
The bill was approved 23 to 11 along party lines by the House of Representatives Ways and Means Committee.
Initially enacted to aid businesses in the 2008 financial crisis, bonus depreciation is one of about 50 temporary tax breaks that technically expired at the end of 2013 because Congress failed to renew them, as it often does.
Known as the tax extenders, these temporary measures are expected to be renewed for another year or two, on a retroactive basis, after the November congressional elections are over, likely in December, analysts said.
Republican Representative Pat Tiberi said a contraction in U.S. gross domestic product, announced on Thursday, was evidence of the need to renew the tax break. Analysts blamed the contraction primarily on harsh winter weather.
The committee also approved making certain charitable donation tax breaks permanent, at an estimated cost to taxpayers of $16 billion over 10 years.
Earlier this month, the full House voted to make the business research and development tax credit permanent. That bill was criticized by Democrats for its $156 billion cost over 10 years. (Reporting by Patrick Temple-West; Editing by Kevin Drawbaugh and Richard Chang)