[Congressional Record Volume 153, Number 56 (Friday, March 30, 2007)]
[Extensions of Remarks]
[Pages E701-E702]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     SMALL BUSINESS EXPENSING EXPANSION AND PERMANENCY ACT OF 2007

                                 ______
                                 

                           HON. WALLY HERGER

                             of california

                    in the house of representatives

                        Thursday, March 29, 2007

  Mr. HERGER. Madam Speaker, in 2003 Congress and the President enacted 
the Jobs and Growth Tax Relief Reconciliation Act of 2003. This bill 
strengthened and expanded the existing ability of small businesses to 
immediately expense new investment under Section 179 of the tax code. 
The objective of this law was to further encourage small businesses to 
make new capital investments, helping to spur economic growth and 
create jobs in our economy. Like many, I believe we should permanently 
extend and expand this provision, which is why I am introducing the 
Small Business Expensing Expansion and Permanency Act of 2007.
  The Jobs and Growth Act increased from $25,000 to $100,000 the amount 
of new investment a business can expense--or deduct from income--in a 
given year. The law also increased--from $200,000 to $400,000--the 
amount of total investment a business can make in a year and still 
qualify for expensing under Section 179. The original sunset date for 
expensing was slated for 2007, however we successfully extended the 
current law expensing limits under the Tax Increase Prevention and 
Reconciliation Act in 2006. They will now expire in 2009.
  If the higher expensing limits are good for our nation's small 
businesses over the next two years, they should be good for small 
businesses indefinitely. This legislation will repeal the 2009 sunset 
and expand the current expensing limits to $200,000, indexed for 
inflation. The current phase out level would also increase, and would 
begin at $800,000 of annual investment. Further, the legislation would 
allow more small businesses to use this powerful expensing ability by 
reducing the phase out to only 50 cents on every next dollar of 
investment. Effectively, firms investing up to $1.2 million per year 
would be able to use some level of expensing.
  Small businesses truly are the backbone of our economy, representing 
more than half of all jobs and economic output. We should not take 
small business vitality for granted, however. Rather, our tax laws 
should support

[[Page E702]]

small businesses in their role as the engines of innovation, growth, 
and job creation.
  Madam Speaker, in difficult economic times, we must do all we can to 
encourage new investment and job creation by creating certainty and 
predictability for America's small business owners. The Small Business 
Expensing Expansion and Permanency Act of 2007 will help accomplish 
this worthy goal. I applaud the Administration for its consistent 
leadership on this issue, and I look forward to working with others in 
Congress to enact this much-needed legislation.

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