In the tax bill passed in late 2010, there is a provision that permits all companies to get 100% first-year expensing of equipment from August 2010 until December 2011.
Clearly, this provision substantially improved the earnings of many large corporations, and also increased US real GDP growth.
But it did very little, if any, job creation, in the aggregate.
My proposal is to now tweak this 100% first-year tax expensing of equipment for all equipment acquired for the remainder of 2011, to turn it into an effective job creator.
Thus, Big Corps, over a certain size, making equipment expenditures from Aug 1, 2011 through Dec 31, 2011, are allowed 100% first-year tax expensing of equipment, but only if the Big Corp also increases its full-time payroll count sufficiently from Aug 1, 2011 to Dec 31, 2011. I’ll let the Feds decide what a reasonable first-year 100% expensing amount per job added should be.
In addition, the Big Corp receiving first-year 100% expensing of equipment for purchases from Aug 1, 2011 through Dec 31, 2011, must have their full-time payroll count remain at least at their Dec 31, 2011 level for the next four years, or else the tax benefits from this 100% first-year tax expensing is recaptured, on a proportionate basis.
This proposal’s near term effect on US Debt should be significantly positive.
And from a fairness standpoint, the US Government should be legislating so that the entire country benefits from capital expenditures made by Big Corps, not just the Big Corps.
