The only thing as certain as death and taxes is that the PC you just bought will be outdated before you open the box. Computers and software often become obsolete after only two or three years. But under current tax law, they are assumed to have a five-year useful life, and must be depreciated over a five-year period.
Sen. Christopher S. 'Kit' Bond, R-Mo., is working to change these regulations. The former chairman of the Senate Small Business Committee, and current ranking Republican on the Committee, has introduced a small-business tax-relief bill, the Small Business Works Act of 2001 (S. 189), that among other things would reduce the depreciation period for technology purchases to two years. According to Bond, the bill is intended 'to ease burdens on self-employed individuals and small firms that pay approximately 40 percent of the nearly $2 trillion that the government collects each year.'
Before Senate control shifted to the Democrats, the bill appeared to be on the fast track to passage. However, the new Senate Finance Committee chairman Max Baucus, D-Mont., has insisted that any new tax cuts be met with offsetting spending reductions, and neither party seems very interested in cutting spending. Bond and other S. 189 proponents now hope some of the bill's measures might be enacted as amendments to other legislation.