The Economic Effects of Bonus Depreciation

May 28, 2014

The House Ways and Means Committee will markup a permanent extension of bonus depreciation on Thursday. Permanently extending bonus depreciation would spur investment, lift wages, grow the economy, and increase federal revenue.

What you need to know about bonus deprecation:

  • Growth: Bonus depreciation would grow the economy by 1 percent: This would add $182 billion to the economy.
  • Investment and Wages: Bonus depreciation would increase investment and wages: Permanently extending bonus depreciation would increase the capital stock by over 3 percent and increase wages by about 1 percent by lowering the current cost of investment.
  • Jobs: Bonus depreciation would create 212,000 jobs.
  • Revenue: Static revenue estimates are misleading. Bonus depreciation would increase federal revenue by about $23 billion a year in the long run, due to increased economic activity.

Update: More on Bonus Depreciation:

The Economics of Bonus Depreciation:

Bonus Depreciation, Investment and Growth:

History of Bonus Expensing:


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