Studies show that when bonus depreciation is available, businesses respond by investing in more equipment and increasing employment, as they need more workers to operate the new equipment.
Expensing for capital investment is not a special tax break. Expensing aligns the timing of tax deductions with the timing of actual capital expenditures so that the tax code does not discourage marginal investment projects.
7 min read
On September 15th, Canada announced that full expensing for machinery, equipment, and patent rights will be made permanent and broadened from around 15 percent to two thirds of business capital investment.
6 min read
A Destination-Based Cash Flow Tax (DBCFT) reduces the tax code’s penalty on investment, narrows its bias toward debt over equity, and removes much of the incentive to shift profits abroad.
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US policymakers have put forward two new tax proposals to address concerns about how artificial intelligence (AI) will impact land, energy, and the workforce.
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If Canada doesn’t make these provisions permanent, it will drop to 12th place in the capital cost recovery ranking once provisions expire in 2034.
5 min read
Some taxes have more powerful economic effects than others, and that’s a lesson policymakers should absorb as they work to craft a tax code that encourages growth and raises sustainable revenue.
8 min read
The OBBBA made substantial improvements to cost recovery, but more opportunities remain for policymakers looking to improve the investment climate in the US.
48 min read
The EU Tax Omnibus proposal would create an EU-wide minimum standard for full expensing, but it confines that standard to qualifying tangible assets used in research and development (R&D) rather than to broader asset classes.
16 min read
Rather than adopt temporary policies that phase out and expire, policymakers should focus their efforts on long-term reforms to support investment.
7 min read
The Tax Foundation uses and maintains a General Equilibrium Model, known as our Taxes and Growth (TAG) Model to simulate the effects of government tax and spending policies on the economy and on government revenues and budgets.
9 min read
The ongoing economic uncertainty from global geopolitical threats, supply chain disruptions, rising interest rates, and lagging economic growth in many developed countries have highlighted the importance of private business investment.
32 min read
Although sometimes overlooked in discussions about corporate taxation, capital allowances play an important role in a country’s corporate tax base and can impact investment decisions—with far-reaching economic consequences.
6 min read
Foreign R&D generally complements domestic innovation rather than substituting for it, so penalizing foreign R&D weakens US firms in cross-border mergers and acquisitions and in domestic production that depends on global scale.
7 min read
Full expensing under the One Big Beautiful Bill Act does not neutralize the tariff burden on imported goods, as former White House Council of Economic Advisers chair Stephen Miran asserts.
8 min read
The new data disclosures will draw significant attention in 2026 and beyond. However, because the data is rooted in financial accounting concepts, affected by timing issues, and shaped by inconsistent reporting regimes, it is poorly suited for drawing strong conclusions about tax policy or corporate behavior.
7 min read
For many, the OBBBA made tax filing easier and put more money back into their pockets. But it didn’t improve the grade for overall tax complexity for the US. It may actually make the situation worse.
Windfall taxes, particularly those imposed on the oil and gas industry, often appear as a quick fix for governments seeking to raise revenue during periods of high commodity prices. However, while these taxes may offer short-term revenues, they can also trigger negative consequences that undermine their intended purpose.
21 min read
Policymakers should broaden and make permanent full expensing for additional asset classes and pursue structural reforms that reduce distortions in how businesses are taxed. A more consistent and predictable policy environment, paired with targeted improvements to loss treatment, R&D incentives, and compliance burdens, would give small business owners greater confidence to invest, hire, and grow.
The past decade’s record suggests that countries have reliable legislative methods to improve their tax systems through ordinary tax reforms.
22 min read
Smaller corporate tax bills after the OBBBA are not evidence of new giveaways or loopholes. They are evidence the tax code is finally treating investment the way it should.