On Aug. 1, the House passed the Job Protection & Recession Prevention Act of 2012 (H.R. 8), 256-171. The bill provides a two-year alternative minimum tax patch (covering 2012 and 2013) and extends through Dec. 31, 2013, the tax cuts originally enacted in 2001 and 2003 including:
• Lower marginal rates
• Marriage penalty relief
• $1,000 child credit
• 15 percent top rate on dividends and capital gains
• Estate tax at its 2011 and 2012 parameters (indexed)
• Higher Sec. 179 small business expensing limits.
On Aug. 2, the House passed the Pathway to Job Creation through Simpler, Fairer Tax Code Act of 2012 (H.R. 6169), 232-189. The bill provides rules for next Congress to follow in order to expedite the consideration of comprehensive tax reform legislation.
Both matters still require Senate approval, though neither is expected to gain traction on the other side of Capitol Hill.
In related news, the Senate Finance Committee failed to approve an amendment in the Aug. 2 markup of the Family & Business Tax Cut Certainty Act of 2012 (“extenders bill”) that would have reinstated 100 percent bonus depreciation for 2012 and extend it through 2013.
The Association of Leaders in Equipment Distribution (AED) has been making the case that 100 percent depreciation bonus should be reinstated for 2012 to amplify the economic impact of the new highway bill and engage contractor purchasing. In a letter to the Senate Finance Committee dated August 1st, Christian A. Klein, AED’s Vice President for Governmental Affairs, wrote:
“Extending 100 percent depreciation would benefit all tiers of the construction industry. Equipment distributors and manufacturers would see increased demand for product. Contractors and other suppliers would be rewarded for new investment and see profit and productivity gains from having more efficient machines. And workers would be given access to the newest, most environmentally-friendly technology.”