Spring is always a busy time for my business, U.S. RENTS-IT. We rent the equipment people use for spring cleaning and to get their yards in shape for summer, plus linens, tables, chairs and tents for weddings and graduation parties.

It’s normally a fun part of the year for our family-owned business. I love helping my neighbors spruce up their houses and prepare for their milestone events. We invest hundreds of thousands of dollars if not more, depending on the demand each year to ensure our customers have access to the high-quality products they deserve and have come to rely on us for. This year, though, spring is coming with some unwelcome anxiety and a lot of uncertainty.

A change in the federal tax code is making it more expensive to operate rental businesses. A provision known as “full expensing” made it more affordable to reinvest in our business. Unfortunately, the measure has already begun to phase out and, without action, it will be gone entirely next year. 

Unless Congress passes a bill soon, my small business, and countless others across Missouri, will have to choose between the bad options of raising prices for their customers, reducing investments in stock or a combination of the two. Other small businesses might need to close all together. Fortunately, a new tax bill introduced by Republicans in the House would restore full expensing and put the country on a strong growth trajectory. Congress now must quickly pass it to provide businesses the certainty they need to start investing.

Full Expensing Helps Us All

Full expensing has earned praise from both President Donald Trump and former president Barack Obama for sparking economic growth. When the policy was fully in place from 2018 to 2020, businesses like mine could deduct 100% of the cost of investments made in equipment and technology in year of the spending – freeing up funds for wages, additional jobs or other expansion efforts. The measure began to phase out in 2023 and this year we can only deduct 40% of investment costs.

Decades of research shows businesses, workers and communities all benefit from full expensing. A 2024 report from the National Bureau of Economic Research, an independent nonprofit, found full expensing generates more investment per dollar of tax revenue than any other tax provisions included in the Tax Cuts and Jobs Act.Since the law only applies to investments made in the United States, those are all dollars supporting American jobs and workers.

Similarly, an assessment from the Tax Foundation, a nonpartisan think tank, found making full expensing permanent would boost gross domestic product, employment and wages. Studies from the University of Pennsylvania’s Wharton School of Business and Georgetown University found the policy increased investment levels and wages, respectively. In short, full expensing helps us all.  

It’s not just rental businesses like mine that relied on full expensing. Airlines used the policy to upgrade their fleets to be more fuel efficient, so did waste management companies. Telecom companies report full expensing allowed them to install 5G infrastructure far faster than otherwise would have been possible. Farmers depended on full expensing to purchase new tractors and other equipment. Extending the policy would likely spark investments in domestic manufacturing and in pharmaceutical and semiconductor facilities.

New Era of Investment

Congress can usher in a new era of economic investment — and provide a much-needed boost to the economy by restoring immediate full expensing to 100%. Policymakers recognize the importance of the provision and thankfully have included it their tax and budget bill. Now, it’s time to pass the bill and send it to the president for his signature.

Critics may argue that full expensing only benefits big businesses, but my experience shows that’s simply not true. Others claim that extending the measure is too expensive, but without it we’ll see more and more businesses pull back on investments, especially in a moment marked by economic uncertainty, slowing growth. In contrast, a Tax Foundation analysis found making full expensing permanent would boost long-run GDP by 0.4%

I know as the amount of investment I can deduct has dropped, I’ve had to limit buying new equipment and party rental supplies. If the policy goes away, I’ll have to cut back even more or pass on costs to my customers. Neither option is good for me or my community.

Every election cycle politicians talk a big game about supporting small business. Putting full expensing in place moves that beyond just words and into action.