Nomination of Antony Blinken to Be Deputy Secretary of Stateby Senator John Hoeven
Posted on 2014-12-16
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call be rescinded.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 this afternoon to talk about the Tax Increase Prevention Act. I have been speaking on this issue and I intend to speak on it until we get this legislation passed. I am hopeful that we will get this legislation moved tonight or maybe even tomorrow. But in any event, we need to get this very important legislation passed this week to make sure that taxes don't go up on our small businesses, farmers, and the hard-working citizens of this country. That is why I have been down talking about the legislation and its importance, and I have also been presenting and reading letters and emails from my constituents who have been contacting me about the importance of getting this done. I want them to be heard because they know very well how heavy their tax burden is and why we need to make sure they get relief for their families and for their businesses. I am talking about family farmers, men and women who work long hours and long days on the farm. I am talking about small business owners, manufacturers, shopkeepers, the whole gamut of small businesses across this great country, your neighbors and mine.
First I am going to talk about some of the provisions in the legislation. I am going to start with one that is incredibly important for farmers in my State but really for small businesses across the country, as I said earlier. That is the section 179 small business expensing and depreciation provision.
The section 179 small business expensing limitation and phaseout amounts in effect from 2010 to 2013 through 2015: Taxpayers can expense up to $500,000 of acquired business property, rather than the current level of expensing $25,000 and $200,000 respectively. The $200,000 is on the depreciation.
The section 179 expensing and depreciation provision is very important for small businesses. It is very important that we get it in place now because they are doing their year-end planning, and they are doing their tax planning. They need to know the rules of the road. They need to know what they can expense and what they can depreciate and how much. It is not just an issue of preparing their tax returns; it is also very much an issue in terms of their planning for next year. What equipment do they buy? If you are a farmer, what ag equipment do you buy? If you are a small manufacturer, what manufacturing equipment do you buy? What repairs do you do? Can you expense those repairs or do you have to go through an elaborate process of setting up a depreciation schedule and then depreciate that repair over a long period of time? [[Page S6888]] These are things that make it very difficult to do business for small businesses and also impede their willingness and their ability to go out and buy equipment and to make those needed repairs to keep their operation running. That hurts our economy. That hurts job creation in our country. It is very important. The section 179 provision is incredibly important to our farmers and small businesses throughout the country.
Also, another very important provision is the bonus depreciation for property that is placed in service during 2014 or, in some cases, 2015 for property with a longer production period. If we are not allowed to take that depreciation, you may not buy that new equipment. If you don't buy that new equipment, obviously that has ramifications all the way through our economy.
There are eight provisions in the legislation for individuals, including the deductibility of State and local sales tax, the deduction of certain expenses for elementary and secondary schoolteachers, the extension of the above-the-line-deduction for qualified tuition, and the extension of tax redistributions from individual retirement plans for charitable purposes.
Also included in the legislation are a total of 30 business-related provisions in addition to section 179 and the bonus depreciation. They are very important and make a big difference in terms of the taxes our businesses will be required to pay.
The legislation includes the research and development tax credit that allows companies a 20-percent credit for incremental qualified research expenses or a 14-percent alternative simplified credit for R&D performed in the United States. I will use an example. We have a large Microsoft location in my State, in Fargo. They employ more than 1,700 people at their campus in Fargo.
I am going to use Microsoft as an example. Microsoft is on a pace to spend over $12 billion on research and development this year, primarily on U.S. jobs. Other countries are competing for the same R&D investment from Microsoft and other companies. Many of them have lower corporate income tax rates, they have stable R&D incentives, and plenty of research and development talent. A consistent and stable U.S. R&D tax credit gives businesses such as Microsoft an incentive to invest and do that research and development in the United States versus some other country.
Again, we are talking about not only economic activity and jobs in our country, but we are talking about innovation right in our country that drives job creation and economic growth. As I said, the real key, I believe, is the impact this legislation has on small business across this country. Small business is the backbone of our economy.
I want to take a few minutes to read some more of the letters and emails I have been receiving on the importance of passing this legislation and putting in place the section 179 expensing and depreciation for our small businesses.
The first letter I am going to read is from Wayne Hauge, a CPA from Ray, ND, a small town in North Dakota. He is speaking on behalf of many of his clients. He writes: Senator Hoeven, what about the IRC Section 179? $25,000 is far too low of a limit, and should be eliminated if that is all that can be expensed in a year. Far better would be reinstating prior limits and making such a change permanent.
A farmer does not plan a crop after you've harvested it. You plan it a year in advance. Income tax planning is the same. It is an extremely poor financial planner who decides to buy something based on an ever-changing tax policy, and after the fact.
I realize the political system in this country is stagnated, with refusals by both parties to agree on anything. But the time is now to put some semblance of future planning back on the table and help us to stay on top of the game, rather than whining about what should have been done.
We owe it to Wayne and his clients to get this bill done before we leave.
Here is another one. This one is from Mike Van Gorkom with Titan Machinery in Wishek, ND. Titan Machinery is a dealer for Case IH, Case Construction, New Holland, and New Holland Construction. Titan Machinery also represents Titan Rentals, Titan Aggregate, and a varied list of short-line equipment to meet specialized customer demand and niche product needs.
I was just wondering if anyone can tell me when to expect a vote on extending Section 179 tax deductions. I have been following this bill along with many of my customers. Many farmers are waiting to purchase equipment from me until they find out if they can use it for this year's deductions or wait until next year. Thank you and have a nice day.
Lawrence D. Stockert, a small business owner in Bismarck, ND, wants to purchase new equipment this year, but he is not certain he can because we have yet to pass the tax extender package. He writes: I would like to know if there is a possibility for the Senate to pass the increases in the Section 179 depreciation rules. The previous year's provision enabled me to buy new equipment. Can you take this bill to the Senate and get it passed? I would like to purchase additional equipment this year as well.
Then from Stephen Stafki, vice president of service, General Equipment & Supplies in Fargo, ND. He is concerned about the bonus depreciation provision in the extender package. The Tax Increase Prevention Act extends the 50-percent bonus depreciation to property acquired and placed in service during 2014 or 2015 for certain property with a longer production period. He writes: Senator Hoeven, I am writing to you to express my support for passing bonus depreciation before the end of 2014. As a small business owner this legislation is crucial to us and our customer base. I truly hope you will fight to push this legislation through Congress and garner enough support to be able to override any Presidential veto.
The last letter I would like to read today comes from Jay Hansen of Fargo, ND. It is especially telling, because like the earlier letter I read from a CPA, he is also a CPA. Essentially he is speaking for the 1,000 farmers whom he does work for.
My name is Jay Hansen. I am a CPA working for Iver Eliason CPA PC in Minot, ND. We have approximately 1,000 farm clients who rely heavily on depreciating farm machinery as part of their overall tax planning strategy. With the discussion regarding the tax extender bill being on the agenda before the end of the year, we are curious to know if you have any insight on what we can expect and when we can expect it. Any information you can provide me regarding the Section 179 expense deduction would be greatly appreciated.
So time is of the essence. We are days from the end of the tax year, days away from the holidays. Millions of Americans are depending on us to spare them a burden that will hurt their businesses and hurt their families. If we do not act, taxes will go up on hard-working Americans, on small businesses across this country, on farmers. So we need to act. We need to make sure that does not happen. We need to pass the legislation we have here on the floor. We need to get it done now.
So I urge my colleagues to join together in bipartisan fashion and get this done. Let's pass the Tax Increase Prevention Act and make sure we do not see a tax increase on our small businesses and the hard- working taxpayers of this great Nation.
I yield the floor, and 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.