Republican presidential candidate Rick Santorum has released a tax plan and it contains a lot of features worth discussing. It has a 20 percent flat tax on both personal and corporate income, with generous exemptions that mean you will have to earn quite a bit before owing any income tax. It also maintains deductions for charitable contributions and mortgage interest up to $25,000. However, what appears to be mostly overlooked is one feature that could be quite beneficial to small businesses: full business expensing for all purchasing of plant and equipment, including inventory.

Currently, businesses have to depreciate capital expenses (the cost of anything which is not a one-time use item) over varying lengths of time that can range from one to thirty-nine years (for some buildings). That means that while a business can deduct expenses for items such as utilities and labor from its gross revenues before computing taxes owed, it must subtract the cost of “investment” type expenses slowly over time. Because money now is more valuable than money later (thanks to impatience and inflation), this makes the cost of investing in things like new factory equipment higher, which reduces the amount that businesses invest.

Rick Santorum’s plan, by allowing immediate, full expensing will stimulate businesses to invest more in growing their businesses, thus helping to grow the economy. Given our current slow pace of growth, that would be a nice plus.

Read the full article at Forbes.com: Rick Santorum's Tax Plan Has An Overlooked Bonus For Small Business