H.R. 2510 would amend the Internal Revenue Code to permanently provide an additional first-year depreciation deduction of 50 percent of the adjusted basis of qualified property, effective January 1, 2015. Under current law that additional deduction expired for most property placed in service after December 31, 2014. The bill would also expand the definition of qualified property and make other modifications to that deduction.
Because of the magnitude of its budgetary effects, this bill is “major legislation,” as defined in section 3112 of S. Con. Res. 11, the Concurrent Resolution on the Budget for Fiscal Year 2016. Hence, the cost estimate prepared by CBO and the staff of the Joint Committee on Taxation (JCT) incorporates the federal budgetary effects of changes in economic output and other macroeconomic variables that would result from enacting the legislation.
JCT estimates that enacting the bill would increase deficits by about $267 billion over the 2016-2025 period. That estimate includes two components. First, excluding macroeconomic feedback effects, JCT estimates that the bill would increase deficits by about $281 billion over the 2016-2025 period. In addition, the macroeconomic feedback would reduce deficits by about $14 billion over that period, JCT estimates. Most of the effects on deficits would result from changes in revenues. In addition, JCT estimates that enacting the legislation would decrease revenues and increase the on-budget deficit by at least $5 billion in one or more of the four consecutive 10-year periods beginning in 2026. That estimate includes macroeconomic feedback.
Enacting the legislation would affect direct spending and revenues; therefore, pay-as-you-go procedures apply.
JCT has determined that the bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.
