The Republican-controlled House on Friday approved a bill that would allow companies to write off expenses from new equipment known as a bonus depreciation, The Washington Post reported.
The bill, approved by a 258-160 vote, would allow businesses to write off 50 percent of capital investments in the first year of purchase rather than depreciating those costs over time.
It is popular with business owners, but will likely be vetoed by President Barack Obama because it will add $287 billion to the nation's growing budget deficit over the next decade, the Post reported.
Bonus depreciation was last approved in 2008 at the height of the economic downturn as a way to energize the economy. It expired in January. House lawmakers voted to make it permanent but it has stalled in the Senate amid arguments over amendments.
Democrats in the Senate have approached the issue by looking at a host of expiring tax breaks and considering each for a possible extension or end. They hope to extend all temporary tax breaks into 2015 to give lawmakers more time to study which temporary tax breaks to keep and which to kill.
Such tax break renewals have marked a legislative stalemate that is unlikely to be resolved until after 2014 midterm elections in November.
House Republicans argued for a fix now to stimulate business.
"It’s easy. If you want to grow the economy, encourage job creation and increase federal revenue, you support making bonus depreciation permanent," Ohio Rep. Patrick J. Tiberi, a Republican who sponsored the bill, told the Post. "Permanency gives job creators the certainty they need to plan and invest in their businesses, including hiring employees."
House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, argued that the bill would assist tax reform. "By making long-standing features of the tax code permanent, we can facilitate a comprehensive overhaul of the tax code," Camp told The Hill.
The White House pushed back, saying in a statement
that the tax bonus depreciations were "never intended to be a permanent corporate giveaway."
"House Republicans also are making clear their priorities by rushing to make business tax cuts permanent without offsets even as the House Republican budget resolution calls for raising taxes on 26 million working families and students by letting important improvements to the Earned Income Tax Credit, Child Tax Credit, and education tax credits expire," the White House said in the statement.
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