One of the last votes the Senate made in December before adjourning was to yet again pass a bill of so-called “tax extenders” to renew a long list of temporary tax provisions. While all tax extenders provide an advantage vested interests—rum producers, race horse owners, farmers, small businesses, NASCAR race tracks, etc.—many do so at the disadvantage of others, and should be eliminated. The legislation passed last month only extends these provisions for the 2014 tax year. Therefore, the new Congress has another chance to make meaningful tax reform this year or else be saddled with passing another temporary tax bill come December 2015.

One tax extender that would benefit all industries, however, is “expensing.” Full expensing levels the playing field from an economic standpoint and, from a political standpoint, makes it harder for Congress to choose winners and losers in the tax code. This simple change will promote economic growth by encouraging increased investment and employment, and should be made a permanent feature of the tax code, not just a temporary provision subject to annual uncertainty over Congressional renewal.

The current tax code does not let businesses deduct the full value of purchases, but rather deduct a certain value each year over the useful life of the asset. This “deprecation” distorts corporate profits and, by extension, increases the real taxes paid to government. Full expensing would let business deduct spending on manufacturing plants and farm equipment in the same way they currently deduct their spending on employee wages.

It’s important to note that expensing isn’t a tax cut—it’s a change to the timing of tax payments. Expensing allows business to deduct more today and deduct less in the future. This has the result of lowering tax payments today but raising payments tomorrow.

As our new research on “Options for Corporate Capital Cost Recovery: Tax Rates and Depreciation” published by the Mercatus Center at George Mason University shows, the current system of depreciating assets for tax purposes decreases the profitability of investments, creates different effective tax rates across industries, complicates the tax code, and rewards special interest lobbying.

Under the U.S. tax code, every durable good must have a defined asset life. This specification gives the IRS, Treasury, and Congress an impossible task of trying to determine the useful life of all assets. But useful life depends on maintenance, frequency of use, climate, initial quality, and any number of other factors. An attempt to account for the natural depreciation of equipment in the tax code results in seemingly random asset classifications.

The arbitrary nature of depreciation timelines leaves the tax code open to modifications promoted by special interests. A 2012 report by the Joint Committee on Taxation lists 55 separate statutory changes to depreciation periods. In many instances, Congress has the ability to shorten a depreciation timeline and increase the profitability of a special type of capital, meaning Congress can make one firm or industry more profitable than another by manipulating depreciation laws.

When a capital purchase is depreciated for tax purposes, the government effectively receives an interest-free loan from the business community as tax payments are larger up front than they would be under expensing. Furthermore, the businesses’ after-tax return on investment is diminished. Because the deduction loses value over time, the longer an asset is depreciated, the less profitable it becomes. Tax depreciation discourages long-term investments, while full expensing treats capital expenditures similarly and would encourage long-term investments and lead to job creation and economic growth.

An alternative proposal to full expensing is “bonus depreciation,” or 50 percent expensing. This allows businesses to write off half their investment upfront and depreciate the rest. Even though 50 percent expensing is popular in Congress, it would be more advantageous for both businesses and workers if full expensing were adopted.

Advocating for 50 percent expensing, recent Ways and Means Committee Chairman Dave Camp  (R-Mich.) said, “it's time for us to agree that we should make it permanent so businesses can do what they do best, invest in the economy and hire new workers.” The 50 percent expensing policy has been renewed nine out of the last dozen years. But the temporary nature of the policy leaves business uncertain of its permanency. For business, uncertainty of future tax policy leads to paralysis of investment which holds back economic growth and job creation. Adopting a tax policy of permanent full expensing would generate even more jobs and investment.

The beneficial effects of full expensing were highlighted by the Tax Foundation finding that “full expensing would increase GDP by 5.13 percent, lift the capital stock by 15.4 percent, raise wages by 4.36 percent, create 885,300 jobs, and boost federal revenue by $121.3 billion.” Opponents who claim full expensing does nothing but decrease federal revenues fail to account for the higher taxes resulting from increased economic growth and the benefits of a simplified tax code gained from full expensing.

The current corporate tax code distorts investments, hurting some industries while privileging others. It’s time we move away from temporary tax policy and adopt meaningful reforms. Congress should consider full expensing as a permanent change to the tax code to level the playing field and grow the economy.