In the tax bill passed in late 2010, there is a provision that permits all companies to get 50% first-year bonus tax depreciation for equipment purchases made in 2012.
When I study the past attempts at stimulating the US economy with bonus tax depreciation, it is very clear that there has been very little, if any, job creation from it.
However, there has been a substantial near-term US Debt increase from it, in every case.
My proposal here is to turn this 50% bonus tax depreciation for equipment purchases in 2012 into a much more effective job creator.
Thus, Big Corps, over a certain size, making equipment expenditures in 2012, are allowed 50% first-year bonus tax depreciation, but only if the Big Corp also increases its full-time payroll count sufficiently from Dec 31, 2011 to Dec 31, 2012. I’ll let the Feds decide what a reasonable first-year 50% bonus tax depreciation amount per job added should be.
In addition, the Big Corp receiving first-year 50% bonus tax depreciation for equipment purchases made in 2012, must have their full-time payroll count remain at least at their Dec 31, 2012 level for the following four years, or else the tax benefits from this 50% bonus tax depreciation 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.
