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.


Related Articles

Reviewing the Economic and Revenue Implications of Cost Recovery Options

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

Tax Policy After Coronavirus: Clearing a Path to Economic Recovery

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

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

Expensing Provisions Should Not Favor Physical Over Human Capital

Understanding Why Full Expensing Matters

Retail Glitch Awaits Congressional Fix

New Evidence on the Benefits of Full Expensing

Depreciation Requires Businesses to Pay Tax on Income That Doesn’t Exist

Senators Introduce Legislation to Fix the Retail Glitch

Testimony: Temporary Policy in the Federal Tax Code

Lawmakers Introduce Another Tax Extenders Bill

Sanders and Schumer’s Misguided Stock Buybacks Proposal

Sanders’ New Bill Rests on Economic Misunderstandings

Canada May Follow the United States’ Lead on Improving Tax Depreciation for Investment

The Economics of Stock Buybacks

Cost Recovery Treatment Short of Full Expensing Creates A Drag on Economic Growth

Permanence for 100 Percent Bonus Depreciation Provides More Cost-Effective Growth than Permanence for Individual Provisions

The TCJA’s Expensing Provision Alleviates the Tax Code’s Bias Against Certain Investments