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Legislation Introduced to Cancel R&D Amortization
Canceling the amortization of research and development costs would reduce federal revenue, but policymakers have a variety of options to offset the costs.
3 min read
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
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.
3 min read
Capital Cost Recovery across the OECD, 2019
Capital cost recovery, though often overlooked, can have a significant impact on investment decisions—with far-reaching economic consequences.
24 min read
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 readToward a State of Conformity: State Tax Codes a Year After Federal Tax Reform
States incorporate provisions of the federal tax code into their own codes in varying degrees, meaning that federal tax reform has implications for state revenue beyond any broader economic effects of tax reform.
73 min read
Cost Recovery Treatment Short of Full Expensing Creates A Drag on Economic Growth
Full expensing is a key driver of future economic growth, and can have a larger pro-growth effect per dollar of revenue forgone than cutting tax rates.
3 min read
Testimony: The Positive Economic Growth Effects of the Tax Cuts and Jobs Act
Tax Foundation President, Scott Hodge, provides written testimony before the United States Joint Economic Committee on the economic growth effects of TCJA.
21 min read
Permanence for 100 Percent Bonus Depreciation Provides More Cost-Effective Growth than Permanence for Individual Provisions
In the long run, permanent full expensing produces about 4.5 times more GDP growth per dollar of revenue than making individual TCJA provisions permanent.
2 min read
The TCJA’s Expensing Provision Alleviates the Tax Code’s Bias Against Certain Investments
The Tax Cuts and Jobs Act made significant progress in improving businesses’ ability to recover the cost of making investments in the United States by enacting 100 percent bonus depreciation.
11 min read
The OECD Highlights the Economic Growth Benefits of Full Expensing
The Organisation for Economic Co-operation and Development (OECD) praised a measure in the Tax Cuts and Jobs Act (TCJA) passed last December.
2 min read
The Fixtures Fix: Correcting the Drafting Error Involving the Expensing of Qualified Improvement Property
Due to a legislative oversight, the Tax Cuts and Jobs Act excluded the category of qualified improvement property investment from 100 percent bonus depreciation.
12 min read
Capital Cost Recovery across the OECD, 2018
One hundred percent expensing for short-life business investments was a great start but needs to be enacted on a permanent basis for it to have an impact on long-term decision-making.
15 min read
Lawmakers May Vote on Making Key Provisions of the TCJA Permanent
The Tax Cuts and Jobs Act improved the US tax code, but key provisions are only temporary. Now Congress may vote to ensure those tax breaks are permanent.
3 min read