AGC economist calls for tax reform
WASHINGTON - The Associated General Contractors of America's chief economist, Ken Simonson, recently testified before a U.S. Senate subcommittee.
On July 21, Simonson called for "a simple, rational, and relatively stable set of tax rules, particularly with reference to capital cost recovery (which) will enable small contractors to adapt and concentrate on building a strong economy rather than being forced to become tax experts."
Based on an informal e-mail survey conducted in preparation for the hearing, Simonson reported that contractors generally believe the accelerated five-year write-off allowed for most equipment used by construction firms is appropriate. However, those surveyed said software, small equipment and tools should be permitted to be written off over three years or expensed immediately.
Respondents also favored eliminating the alternative minimum tax or at least the separate depreciation calculation required for it. Simonson said that if this could not be accomplished immediately, an interim step could be raising the income floor at which the minimum tax applies to spare small businesses from duplicate accounting and tax work.
He also testified that AGC favors allowing expensing of pollution-control devices. Simonson urged Congress not to lengthen depreciation times and to avoid short-term tax changes, which he says are costly for small businesses to learn about and adapt to.
The full testimony can be viewed at www.agc.org.