Executive Sessionby Senator John Hoeven
Posted on 2014-12-15
HOEVEN. I ask unanimous consent that the order for the quorum
call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Tax Increase Prevention Act Mr. HOEVEN. Mr. President, I am here today to discuss the Tax Increase Prevention Act. We are now getting down to the end of the year. It is important that we get our work done. An important part of that work is passing the Tax Increase Prevention Act. It is often referred to as the tax extenders package. What it really does is it extends tax credits and deductions used [[Page S6837]] by small businesses across this country. The Tax Increase Prevention Act will extend for 1 year 55 different tax credits and deductions that expired either at the end of 2013 or during 2014.
This is a bill that has already passed the House, and it passed with a huge margin, with a bipartisan vote of 378 to 46.
One of the most important provisions in the act is the section 179 depreciation and expensing provision for small businesses. That is the provision I particularly want to focus on today and talk about and discuss why it is so important for our small businesses and for our entire country.
Section 179 allows farmers and other small businesses to expense and depreciate property they have purchased or repaired for their operations. That is important to them so that they don't see a tax increase, but it also keeps our economy going. Without it, small business will buy and repair less equipment, slowing down our manufacturing base and slowing down our economy. Quite simply, that means fewer jobs. It is not only because small business's costs are increased, but it is also because of the uncertainty that is created when they don't know the rules of the road. That is why this fix needs to be done on a permanent basis.
I think it could have been done on a permanent basis this year. We were working on a deal until the President threatened to veto that legislation. So now we have a 1-year fix, but we have broad support in this Chamber for the 1-year fix. We need to pass it now and then go back to work on a permanent fix next year.
I was home for the weekend about a week ago, and I was talking to some of the farmers in our State. They told me what they have been telling me for some time now; that is, they need the section 179 expensing and depreciation, they need to know the rules of the road, and they need to know it now.
We are at year-end. They are doing their year-end planning. They are doing their tax work. Some are still negotiating on buying equipment for next year. The depreciation and expensing rules affect the decisions they make. They will also affect the number of jobs in our economy. Agriculture alone is responsible for 16 million direct and indirect jobs in our economy. Ag is also a sector of our economy that produces a positive balance of trade. American agriculture provides the highest quality and lowest cost food supply in the world. It is something that benefits every single American every day.
Section 179 expensing and depreciation is important for other small businesses as well. And it is not just small businesses, it helps keep our large industries going too. For example, Case New Holland and John Deere have manufacturing plants in my home State. They produce tractors, balers, and other equipment. In addition, they also make industrial equipment. When farmers and other small businesses slow down their purchase of equipment, these manufacturing facilities slow down as well. It means less business, fewer workers needed, and fewer jobs. That is how it works. It is that simple. The truth is that small business is the backbone of our economy in this country.
The hallmark of America is that it has historically been the best place in the world to do business. It is where everybody has always come to do business. We have always had the best legal, tax, and regulatory business climate. We provided the certainty businesses need to invest, to hire people, to create jobs, and to grow the economy. That is the rising tide that lifts all boats--a higher standard of living for our people and revenue from economic growth, not higher taxes, to reduce our debt and deficit to get them under control as well.
Let's create that certainty for our farmers and small businesses across this great Nation. Let's make sure their taxes don't go up. Let's start by passing the Tax Increase Prevention Act and section 179 expensing and depreciation now.
I would like to close by reading from some of the letters I have received from some of my constituents. I think so often that the hard- working taxpayers of North Dakota, the small business people there who are getting it done every day, say it best.
The first one is from Dick Hedahl, owner of Bismarck-based Hedahls Auto Plus. He said: Without section 179 and the bonus depreciation, Hedahls Auto Plus would really have felt the pinch last year when we purchased equipment to service diesel powered trucks and heavy equipment.
Since the growth in the Bakken, his services have been especially important because he can save clients thousands of dollars by refurbishing worn diesel engine blocks. What makes the refurbishing possible is the 100 percent American-made equipment Hedahl bought in 2012 and 2013 for $450,000. At a 34-percent tax rate, he says he would not have been able to make those equipment purchases work, but with section 179 expensing and depreciation, he was able to make those things work. As a result, he is providing jobs in the western part of our State. Hedahls Auto Plus employs more than 200 people.
Another constituent wrote in. Leann Slaubaugh of Rolette writes: I am concerned about Section 179 and what this is doing to the agricultural sector in North Dakota. Farm equipment is not being sold, as the farmers are concerned about the amount they will have to pay taxes on. I farm with my husband and work at a small town farm supply. Farmers have quit spending due to low commodity prices and Section 179. I am concerned with the effect on our small town economy if Section 179 is not revised. After meeting with our tax consultant, we are concerned with the possible tax liability we are facing and what this means to the future of our family farm. Please push for revision of Section 179.
Dennis Miller, who grew up in Stark County and worked for an ag equipment dealership for 28 years, is similarly concerned. I am going to paraphrase from his letter. Four years ago he started his own business, Southwest AG Repair, Inc. He sells new McCormick tractors and repairs all brands of farm equipment. He has six employees.
Mr. Miller wrote to me earlier this year, anxious about the expiration of section 179: It is going to cut sales of farm equipment drastically if the farmers don't get a tax incentive to purchase equipment. The loss of sales will create backlash in the economy throughout the State and the country. There has to be a better way to create the tax revenue.
Mr. Miller, there is. You create tax revenue with economic growth, not higher taxes, just like you create jobs, create economic activity, getting that rising tide that lifts all boats--that is when it enables us to invest in the future of our country, the roads and bridges, our schools, and all of the things people want for this great Nation. But it comes from a growing economy. Of course, that is what creates the jobs we need for our families across America.
So when we talk about the Tax Increase Prevention Act, that is what we are talking about. We are talking about making sure here at the end of the year that taxes don't go up on hard-working taxpayers across this country, that taxes don't go up on our small businesses across the country, and that we understand that is truly the backbone of our economy, that all those people and all those small businesses are the ones who make our economy go every minute of every day.
It is time to act. The time is here. The votes are here on a bipartisan basis in this body to get it done. Let's get it done. Our American citizens, our hard-working taxpayers have waited long enough.
With that, I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.