The Economic Effects of Bonus Depreciation

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:

• The Economic and Budgetary Effects of Bonus Expensing
• The Economic Effects of Bonus Depreciation
• Permanently Extending Bonus Depreciation Grows the Economy

Bonus Depreciation, Investment and Growth:

• Bring Back Bonus Expensing, Bring Back Jobs
• Top 10 Things to Know about Investment and Tax Policy
• Investment, GDP Slow in First Quarter: Bad Weather or Bad Tax Policy
• The Economic and Budgetary Effects of Full Expensing of Investment
• Slow Economic Growth Does Not Need to Be the New Normal

History of Bonus Expensing:

• Has Bonus Expensing Helped Investment?
• What is Investment and How Do We Get More of It?
• Faltering Investment and the Need for Expensing