Even when they’re doing the right thing, Congress ends up a day late and thousands of dollars short.

Legislation has finally been introduced into both chambers of Congress to shorten the depreciable life of leasehold improvements from 39 years to 10 years. And with growing bipartisan support in both the House and the Senate, it looks like the measure could pass this summer.

Real estate groups are understandably thrilled about this development. For years, they have (rightfully) complained that a 10-year asset such as an interior wall configured for a specific tenant should be depreciated over its 10-year life.

I would suggest, however, that this conquest is only a small one on the way to a much larger victory, freedom from the highest level of taxation this country has ever seen in peace time. (Remember, we have sent "advisors" to Yugoslavia. We are not at war, yet.)

The real estate industry has a slam-dunk in this case, since the current law runs counter to both academic and common sense.

Leasehold improvements are changes made to a space to meet the needs of a particular tenant, including changes to layout, electrical wiring, plumbing and lighting. Current tax law requires that leasehold improvement costs incurred by the building owner be recovered over the life of the entire building -- which must be depreciated over 39 years.

When a tenant vacates the space, or the improvements go "out of service," a property owner can then write off the remainder of the costs of any improvements made for the tenant's specific needs. However, if a tenant remains, the "in service" improvements continue to depreciate at the current rate, allowing the taxpayer to write-off just 1/39th of the costs per year.

The proposed legislation would match the recovery of improvement expenses to the life of the actual improvements -- a more reasonable 10 years -- and would therefore allow the building owner to write off 1/10th of the costs per year. (Thanks to BOMA for the last three paragraphs of legislative interpretation.)

What makes the 10-year time frame more reasonable is the fact that improvements typically are made every five to 10 years. And the cost of these modifications generally is borne by the building owner.

But leasehold improvements made to lure a new tenant into a space are much closer in definition to an item that may be expensed in the first tax year. This cost was incurred not for the owners’ benefit as much as it was for sales and marketing purposes. Therefore, as a cost directly related to leasing up new or vacated space, leasehold improvements should be eligible for an immediate write-off.

So, while this legislation is moving in the right direction, it is nowhere close to what it should be, the allowance of immediate write-offs of expenses related to securing new occupants.

BOMA is not taking quite the hard line I have.

"Current tax policy runs counter both to common sense and the reality of the marketplace. It is a hidden and inequitable tax on the commercial real estate industry," said W.S. (Bill) Garland, president of BOMA International. "The House of Representatives has recognized this injustice and is moving towards a suitable solution. We applaud the Senate for taking corrective steps as well."

Yeah, most of you out there think my suggestion is crazy. But that is only because year upon year of over-taxation has brainwashed us into thinking it’s OK for the government to deplete our personal and corporate earnings.

The United States has turned into one big transfer payment. Kudos to the real estate industry for getting a little more transferred back into their pockets, where their hard-earned cash belongs.