President Signs Stimulus Package
February 13th, 2008
Caroline Hurley
Today, President Bush signed into law an economic stimulus package that includes tax rebate checks for individuals (including senior citizens and veterans), business tax benefits, and housing provisions. The bill, a compromise reached last week by the House and the Senate, includes two business tax provisions to assist business investment made in 2008. The first is a 50 percent bonus depreciation allowance for new equipment purchased and placed into service this year. (The deduction is allowable for regular and alternative minimum tax purposes.) Important for USTelecom members, whose outside plant and equipment tend to have longer asset lives, the one-year extension of the placed-in-service date (to January 1, 2010) is provided for certain property with a recovery period of 10 years or longer. The new law also increases the expensing limit for small businesses this year – by allowing them to immediately deduct up to $250,000 for both new and used tangible property purchased and placed in service in 2008, with an investment phase-out threshold of $800,000.
The importance of including measures in the stimulus package to encourage new investment can’t be stressed enough, especially when it comes to encouraging investment in information and communications networks. Robust, ubiquitous broadband is a key driving force in our economy, so policies that encourage investment and create incentives for infrastructure improvements in broadband spur growth in other industries, as well. Of course we’re glad that both Congress and the administration recognized that fact when considering these economic relief measures; hopefully they’ll continue to press for investment-friendly policies and consider some more lasting measures, such as updating the outdated depreciation schedule for telecom equipment!
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