Center for Federal Tax Policy

Cost Recovery

Cost recovery is the ability of businesses to recover (deduct) the costs of their investments. Although sometimes overlooked in discussions about corporate taxation, capital cost recovery plays an important role in defining a business’s tax base and can impact investment decisions—with far-reaching economic consequences. When businesses are not allowed to fully deduct capital expenditures, they spend less on capital, which reduces worker productivity and wages.

Featured Research

President Trump Outlines Second Term Tax Ideas

August 25, 2020

FAQ on Neutral Cost Recovery and Expensing

July 10, 2020

Empirical Evidence Shows Expensing Leads to More Investment and Higher Employment

May 19, 2020

Options for Improving the Tax Treatment of Structures

May 19, 2020

White House Considers Neutral Cost Recovery for Structures

May 6, 2020

Reviewing the Benefits of Full Expensing for the Post-Pandemic Economic Recovery

April 27, 2020

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