An Across the Board Stimulus Plan

An attorney friend of mine in San Jose California, Dick Alexander, took this ad out in the Washington Post's National Weekly. He’s apparently willing to spend his own money to help save some of ours. I find his proposal makes a lot of sense. Here it is:

“A simple across-the-board boost to the economy would be to suspend IRS asset depreciation schedules for capital equipment purchases paid with 2009 dollars.

When a business owner buys a capital asset with current dollars it cannot be written off. It must be “depreciated” over a period of years. That makes every owner think twice when making a capital purchase: taxes still need to be paid, but with reduced cash in the till.

Writing off capital purchases against 2009 income would generate a flurry of buying by stores, professionals, and service trades and manufacturers. Include commercial and residential property owners who are forced to depreciate leasehold improvements over time. One-third of Americans live in 32 million rental units; add to that all commercial real estate.

Allow 2009 leasehold improvements purchased by property owners (rugs, refrigerators, stoves, windows, doors, water heaters, air conditioners, furnaces, all refurbishing, etc.) to be expensed. In addition to promoting jobs in manufacturing, the people who deliver and install these products would be provided work.

Revenue lost in 2009 would be no more than the revenue lost over the current depreciation periods and this loss of current revenue would be offset by increases in employment and tax revenues in 2009.

This is not the time to be timid. We are teetering on the edge of a Depression. Change one IRS rule and the whole economy benefits.”

Richard Alexander
408.289.1776