Legislation Will Encourage Businesses to Update Tech, Farm Equipment
WASHINGTON–Senator Gordon Smith (R-OR) last week introduced the Economic Stimulus Act of 2003 that will allow a 50 percent bonus depreciation over a five-year period for the purchase of high tech, farm, and other capital equipment.
Last year, Smith introduced a 30 percent bonus depreciation incentive as part of legislation signed into law in March 2002. The Economic Stimulus Act builds upon last year's effort by increasing the bonus to 50 percent and extending it through 2008.
"Leading economists have publicly recognized that accelerated depreciation will increase cash flows, add to asset values, and have an immediate stimulating effect on our economy," said Smith. "What this means in human terms is that Oregon's businesses will be able to make capital improvements that will lead to investments in human capital. If you are unemployed, investment delayed is a job denied."
U.S. Department of Commerce data show that private investment in high tech equipment ended its decline and has begun to increase modestly after last year's provision went into effect. Increasing and extending the bonus depreciation will boost business investment further and allow businesses to better plan for sustained increases in technology investment.
Many types of businesses will benefit from this increase, particularly the Information Technology sector which has been an undeniable engine for economic expansion in the United States and especially in Oregon. In the U.S., technology comprises only 8 percent of the economy as a whole but over 30 percent of the growth in the economy over the last 6 years alone. During this same period, U.S. businesses have poured more than $2 trillion into computers, software and other technological products.
"We've got to do something meaningful to help businesses retool, reinvest, restart, and re-employ the citizens of Oregon," said Smith. "Whether you're talking about the Silicon Forest or the real forest, our state needs this bill to create a booming economy not just for today, but for the next several years."
