H.R.3967 - Cost Recovery and Expensing Acceleration to Transform the Economy and Jumpstart Opportunities for Businesses and Startups Act; CREATE JOBS Act (119th Congress)
Summary
H.R.3967, also known as the CREATE JOBS Act, aims to amend the Internal Revenue Code of 1986 to stimulate economic growth and job creation. The bill proposes making permanent the allowance of a tax deduction at the time an investment in qualified property is made. It also introduces a neutral cost recovery depreciation adjustment for residential rental and nonresidential real property and eliminates the amortization of research and experimental expenditures, allowing them to be treated as immediate expenses.
Expected Effects
If enacted, H.R.3967 would likely lead to increased investment in qualified property due to the immediate tax deduction. The neutral cost recovery depreciation adjustment could affect the real estate market, and the elimination of amortization for research expenditures could spur innovation. These changes are projected to influence business investment decisions and potentially impact government revenue.
Potential Benefits
- Stimulates Investment: Permanent full expensing encourages businesses to invest in qualified property.
- Simplifies Tax Process: Eliminating amortization for research and experimental expenditures simplifies tax calculations.
- Promotes Innovation: Immediate deduction for research expenses incentivizes companies to invest in R&D.
- Supports Real Estate: Neutral cost recovery depreciation adjustment could stabilize real estate investments.
- Boosts Economic Growth: By incentivizing investment and innovation, the bill aims to boost overall economic growth.
Most Benefited Areas:
Potential Disadvantages
- Potential Revenue Loss: Immediate tax deductions could reduce government tax revenue in the short term.
- Complexity in Real Estate: The neutral cost recovery depreciation adjustment introduces a complex calculation.
- Risk of Abuse: Immediate expensing could be exploited for tax avoidance.
- Uncertainty in Long-Term Effects: The long-term economic impact of these changes is uncertain.
- Disproportionate Benefits: The tax benefits may disproportionately favor larger corporations.
Most Disadvantaged Areas:
Constitutional Alignment
The bill primarily deals with taxation and economic policy, which falls under the purview of Congress as outlined in Article I, Section 8 of the Constitution. This section grants Congress the power to lay and collect taxes, duties, imposts, and excises to pay the debts and provide for the common defense and general welfare of the United States. The specific provisions of the bill, such as those related to depreciation and research expenditures, are within the scope of Congress's authority to regulate commerce and enact laws necessary and proper for carrying out its enumerated powers.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).