Via The Business Journals

Small businesses could expense up to $500,000 a year in capital expenditures, and the research and development tax credit would be strengthened and made permanent, under legislation approved by a House committee Tuesday.

Don’t get too excited, however. These bills may pass the House, but they likely won’t go anywhere in the Senate, at least in their current form.

The House Ways and Means Committee approved six bills that would permanently extend tax breaks that expired Dec. 31. These bills would cost the federal government $310 billion in lost tax revenue over the next 10 years.

Making these tax breaks permanent without offsetting their cost is fiscally irresponsible, said Rep. Sander Levin, D-Mich., the committee’s ranking Democrat.

But Chairman Dave Camp, R-Mich., said “short-term tax policy is bad for business, and bad for economic growth and jobs.”

There is bipartisan agreement on the value of these six tax breaks, he said. By making them permanent, “businesses small and large will have the ability to plan for the future, invest in the economy, hire new workers, and invent new technologies and products.”

Earlier this month, the Senate Finance Committee approved legislation that would extend around 50 tax breaks through the end of 2015. The cost of this bill wasn’t offset either, but this is only a temporary extension. Committee Chairman Ron Wyden, D-Ore., said the bill puts “an expiration date on the status quo” while giving businesses tax certainty for two years as Congress debates comprehensive tax reform.

None of these tax breaks will be extended unless the House and Senate work out their differences on this issue.

Many business groups support comprehensive tax reform, which would eliminate many tax breaks in return for lower tax rates. In the meantime, however, tax breaks like the R&D tax credit and Section 179 expensing for small businesses need to be revived and strengthened in order to boost the economy, they contend.

“The extension of these provisions would foster more effective business decisions and help spur capital investment and job creation,” the U.S. Chamber of Commerce wrote in a letter to House Ways and Means Committee leaders.

Making the R&D tax credit permanent would be “a game changer for our industry,” said Matt Hettinger, senior vice president at TechAmerica, a technology trade association.

“The United States was the originator of the credit, but we’ve been bested by our competitors as of late,” he said. “These changes help even the playing field. “

Small businesses, meanwhile, strongly support raising the limit for Section 179 expensing to $500,000. That limit dropped to $25,000 in 2014. Section 179 expensing allows small businesses to immediately deduct all of the cost of new equipment such as computers, vehicles and office furniture instead of having depreciate the cost over time.