WASHINGTON — When Congress returns from its annual summer recess in September, a major legislative battle over taxes and debt reduction is likely to extend through a post-election session.
“With Congress at home, dealers are urged to contact their representatives and senators to warn them that unless federal action on taxes and debt reduction is taken there may be local economic consequences,” said American Truck Dealers (ATD) Chairman Dick Witcher.
Prior to the annual August recess, the House passed legislation extending the current individual tax rates through 2013 and maintaining the estate tax at current levels ($5 million per spouse exemption and a 35 percent rate).
The Senate-approved measure only extends the existing cuts for those who make less than $200,000 and married couples up to $250,000. Due to disagreements between Senate Democrats, the bill fails to impact the estate tax. If not addressed prior to the year’s end, it reverts back to a pre-2001 level of a $1 million exemption and a 55 percent rate.
Key tax-related issues for truck dealers also include an increase in the ability of businesses to write off purchases in the first year (Section 179 expensing) as well as bonus depreciation, which is not included in either House or Senate bill. Also on the fall Congressional calendar are mandatory spending cuts required under last year’s federal debt limit agreement.
Failure to properly address the across-the-board spending reductions (“sequestration”) could have a direct impact on the struggling economy. “Congressional action between now and the end of the year will affect truck dealers’ ability to grow their businesses,” Witcher added. “It is imperative that we explain our business model to our representatives in Congress. Truck dealers provide significant economic opportunity, a tax base and jobs in their local communities, all of which could be threatened if Congress fails to act.”