100 percent bonus depreciation, otherwise known as full expensing, accelerates the schedule at which firms can deduct their costs of capital from their tax liability. It encourages investment because firms value a present stream of income more than a future one.
The UK economy is experiencing an upsurge in business fixed investment following two pro-growth tax changes. In the second quarter of 2023, business investment was 9.4 percent higher than the same quarter last year.
The 2017 Tax Cuts and Jobs Act (TCJA) was the largest corporate tax reform in a generation, lowering the corporate tax rate from 35 percent to 21 percent, temporarily allowing full expensing for short-lived assets (referred to as bonus depreciation), and overhauling the international tax code.
Policymakers on Capitol Hill should prioritize permanent pro-growth policy in the coming years as the economy struggles with inflation and the recovery from the pandemic.
A harmonized EU tax base is a project in the making. Policymakers have a chance to put the Union on a path for increased investment and economic growth by focusing on the details of capital cost recovery.
Responsible pro-growth reforms to Arkansas’s tax code can help ensure that the Natural State is indeed a Land of Opportunity.
In recent years, European countries have undertaken a series of tax reforms designed to maintain tax revenue levels while protecting households and businesses from high inflation.
The Spanish election results are moving the country away from pro-growth tax reforms while launching the government’s tax agenda, and the agenda of the Spanish presidency of the Council of the European Union, into uncertainty.
The Small Business Jobs Act would improve the tax treatment of investment but the proposal stops short of full expensing, leaving room for improvement.
At least eight Republican presidential hopefuls will take the stage Wednesday night in the first presidential primary debate of the 2024 election cycle—and the future of the U.S. tax code should be one topic that takes center stage.
For policymakers in Germany, corporate taxation stands out as a promising area for reform. See Germany tax reform and Germany tax proposals.
Details and analysis of the latest House GOP tax plan, the American Families and Jobs Act. Learn more about the House Republican tax plan.
What does the tax reform package do well? What does it do poorly? How would it affect me?
Lawmakers should focus on simplifying the federal tax code, creating stability, and broadly improving economic incentives. There are incremental steps that can be made on the path to fundamental tax reform.
By extending bonus depreciation and introducing neutral cost recovery, the RSC budget would significantly improve the treatment of investment leading to increased growth, expanded employment, and higher wages.
The current tax treatment of R&D expenses is irrational, complicated, and counterproductive. Fortunately, fixing this problem is a bipartisan issue.
Making expensing permanent is especially important now, when the economy is threatened with a recession and inflation remains high.
As policymakers shift their focus away from tax rates and look to harmonize the EU’s corporate tax base, they should understand the benefits of full expensing.
By letting the corporate surtax expire, eliminating taxes on GILTI, and embracing full expensing, New Jersey would take important steps toward creating a more welcoming and competitive tax environment.