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Bonus Depreciation Modified and Made Permanent

Floor Speech

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Date:
Location: Washington, DC

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Mr. KIND. I thank my friend from Michigan for yielding me this time.

Mr. Speaker, this place is riddled with ironies from week to week, and this week is no different.

Yesterday, the Ways and Means Committee was working on a markup of legislation for another short-term extension of the highway trust fund--the transportation and infrastructure investment we desperately need in this country.

We were scratching and clawing to try to find an additional $10 billion over the next 10 months to try to keep some of these projects moving forward; and here, today, we have another permanent change to the Tax Code at a cost of $287 billion over the next 10 years and not a nickel of it paid for--no offset, no effort to pay for this at all; yet our roads are deteriorating, and our bridges are falling down.

We are literally becoming a Third World nation when it comes to our infrastructure system, and I am afraid that is becoming an insult to Third World countries today. We are turning into a Fourth World nation when it comes to our infrastructure.

Instead of having this fruitless debate on the floor yet again, knowing that this legislation won't be moving forward, we ought to be having a hearing in the Ways and Means Committee to develop consensus on a 6-year transportation bill that every State desperately needs in our country, but we are not doing that. In fact, the easiest thing to do during an election year, apparently, is to support tax cuts without paying for them.

Every economist and virtually every business owner will tell you that, substantively, this doesn't make any sense either. The whole point of bonus depreciation is to try to spur capital investment at a time when the marketplace has frozen up, and it is the fear of uncertainty that is preventing business owners from moving forward on their capital purchases.

You take away that temporary nature of bonus depreciation and you ruin the whole desired effect of what you are trying to accomplish.

But I have a feeling that the chairman of the Ways and Means Committee, Mr. Camp, and others in the committee, they already know this, and that is why, earlier this year, when they introduced their comprehensive tax reform discussion draft, they completely eliminated bonus depreciation. And not only that, they clawed back the accelerated depreciation, which is the basis of this as well, in order to help pay for a lowering of rates overall.

I would submit, of the 14 tax bills that would permanently change the Code that have been reported out of the committee so far at a cost of close to $900 billion, none of which is being proposed, if we support those measures and they get enacted into law, we might as well kiss comprehensive tax reform good-bye, because the tools that we will need to be able to lower the rates and broaden the base and make our Code more competitive are taken away from us. If you permanently extend bonus depreciation, you take away an important tool when we do run into recessionary times when businesses may need an additional incentive to invest capital and get off the sidelines.

That hasn't been the problem here. Since 2002, we have had bonus depreciation. We have got a track record now. You look back on it. Most economists will tell you it has been dubious, at best.

The 2000s were the worst job growth decade in our Nation's history. When President Bush left office in 2008, he had a net negative job growth during those 8 years when he was in office.

Since bonus depreciation expired at the end of last year, we have been averaging, every month, close to 240,000 additional private sector jobs being created in our economy today. That is without bonus depreciation being in place.

So what we ought to be doing today is having a serious discussion of how we can come together as an institution and find a way to help pay for a 6-year infrastructure bill that will create jobs, that will start spurring the economic activity that we desperately need, that will lay the foundation for long-term economic growth with a viable infrastructure system that is there to sustain it, rather than having another debate that we know is going nowhere.

And that is unfortunate because we do--and I agree with my friend from Texas, we need a pro-growth, competitive economic policy for the American people, one that recognizes reform the Tax Code to help our businesses, large and small, to be more competitive globally, but one that also recognizes that there are important public investments that we have to make as a nation in order to ensure the type of growth in the future.

Part of that is the infrastructure investment that is being neglected, or 23 extensions merely being kicked down the road with short-term measures. Part of it is having a top-flight, quality education system and a workforce development system so that we have got the best educated, best trained workforce in order to compete with increased global competition. It is broadband expansion in every inch of our territory. It is basic research funding. It is these type of things that, yes, we are going to need some resources in order to do an effective job.

But we keep coming to the floor, week after week, calling for permanent changes to the Tax Code without any ability to pay for it, that is going to hinder our flexibility in the future to really spur the type of economic growth and job creation that we desperately need.

I encourage my colleagues to vote ``no'' on this. Let's start coming together on a real pro-growth strategy and work on the jobs that we desperately need.

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