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

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

Tax Policy After Coronavirus: Clearing a Path to Economic Recovery

April 22, 2020

Senators Introduce Legislation to Fix the Retail Glitch

March 14, 2019


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Why Neutral Cost Recovery Is Good for Workers

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Full Expensing is Good for the Short Run and the Long Run

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Answering Four Questions About How Neutral Cost Recovery Works in Practice

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What the Internet Can Teach Us About Capital Investment, Infrastructure, and Tax Policy

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Inefficiencies Created by the Tax System’s Dependence on Economic Depreciation

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Neutral Cost Recovery Is Not a New Idea

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Empirical Evidence Shows Expensing Leads to More Investment and Higher Employment

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Options for Improving the Tax Treatment of Structures

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White House Considers Neutral Cost Recovery for Structures

May 6, 2020

Reviewing the Economic and Revenue Implications of Cost Recovery Options

April 28, 2020

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Tax Policy After Coronavirus: Clearing a Path to Economic Recovery

April 22, 2020

Toomey Introduces Legislation to Make Bonus Depreciation Permanent and Fix the Retail Glitch

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The White House Budget Highlights the Need to Extend Pro-Growth TCJA Business Tax Provisions

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Expensing Provisions Should Not Favor Physical Over Human Capital

December 17, 2019

Understanding Why Full Expensing Matters

November 26, 2019

Retail Glitch Awaits Congressional Fix

October 10, 2019