WASHINGTON (Reuters) - The Obama administration said on Thursday that it “strongly opposes” a Republican measure pending in the U.S. Congress that would permanently extend a business tax break dealing with deductions on depreciation of certain investments.
Known as “bonus depreciation,” the tax break lets companies deduct 50 percent of the costs of certain equipment purchases right away, instead of depreciating the costs over years. That allows them to lower their federal tax bills.
The rule is temporary, adopted in 2009 to help companies recover from the financial crisis. Republicans want to extend it and make it a permanent part of the tax code, which would cost taxpayers an estimated $287 billion over the next 10 years.
The measure was expected to come up for a vote by the Republican-controlled House of Representatives on Friday. If approved there, it would go next to the Democrat-controlled Senate, where it was not expected to advance.
If it did win Senate approval, however, and arrived on President Barack Obama’s desk, his senior advisers would recommend that he veto it, a White House statement said.
Bonus depreciation “was never intended to be a permanent corporate giveaway,” the statement said.
The Republican measure includes no accompanying proposal to offset its costs, which would enlarge the federal deficit.
The measure was drafted by Republican Representative Pat Tiberi, who said earlier in a statement that “bonus depreciation helps grow the economy and encourages job growth.”
Reporting by Kevin Drawbaugh; editing by Andrew Hay