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100 Percent Bonus Depreciation (Full Expensing)

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Inflation Reduction Act corporate taxes most economically damaging way to raise revenue Raise the corporate tax rate, raise corporate tax rate, corporate tax hike, corporate tax increase, corporate tax burden

Expensing Provisions Should Not Favor Physical Over Human Capital

Investments in worker training and education can increase productivity and economic output as growth in human capital accumulates, though the time horizon for these effects is longer than that of physical capital accumulation.

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Understanding Why Full Expensing Matters, Full expensing is also known as accelerated depreciation of capital investments, Learn more about accelerated cost recovery of investments.

Understanding Why Full Expensing Matters

Understanding the channel through which a tax policy change is expected to affect the economy is crucial. Absent this understanding, we are likely to reach the wrong conclusions on what sound tax policy looks like and what changes would improve the tax code.

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full expensing, 100% bonus depreciation,

New Evidence on the Benefits of Full Expensing

Additional evidence on the economic benefits of full expensing of investment was recently published in the American Economic Journal: Economic Policy.

4 min read
depreciation requires businesses to pay tax on income that doesn't exist capital investment

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

While tax rates matter to businesses, so too does the measure of income to which those tax rates apply. The corporate income tax is a tax on profits, normally defined as revenue minus costs. However, under the current tax code, businesses are unable to deduct the full cost of certain expenses—their capital investments—meaning the tax code is not neutral and actually increases the cost of investment.

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Amortizing Research and Development Expenses Under the Tax Cuts and Jobs Act research and development expensing

Amortizing Research and Development Expenses Under the Tax Cuts and Jobs Act

Expensing, or the immediate write-off of R&D costs, is a valuable component of the current tax system. The TCJA’s change to amortization in 2022, requiring firms to write off their business costs over time rather than immediately, would raise the cost of investment, discourage R&D, and reduce economic output.

12 min read