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.
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.
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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.
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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.
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Responsible pro-growth reforms to Arkansas’s tax code can help ensure that the Natural State is indeed a Land of Opportunity.
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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.
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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.
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The Small Business Jobs Act would improve the tax treatment of investment but the proposal stops short of full expensing, leaving room for improvement.
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For policymakers in Germany, corporate taxation stands out as a promising area for reform. See Germany tax reform and Germany tax proposals.
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Details and analysis of the latest House GOP tax plan, the American Families and Jobs Act. Learn more about the House Republican tax plan.
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Short FormWhat does the tax reform package do well? What does it do poorly? How would it affect me?
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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.
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The current tax treatment of R&D expenses is irrational, complicated, and counterproductive. Fortunately, fixing this problem is a bipartisan issue.
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Making expensing permanent is especially important now, when the economy is threatened with a recession and inflation remains high.
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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.
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As predicted, the Inflation Reduction Act’s misguided price-setting policy is already discouraging drug development. Rather than double down on it, as President Biden proposes doing in his budget, lawmakers ought to restore incentives to invest in the United States.
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Consistent principles ought to apply across the tax code. In the case of intangible drilling costs, companies should be able to claim full deductions for the costs they incur.
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The UK’s adoption of full expensing is a welcome step that may generate short-run economic benefits. However, for the reform to have a meaningful effect on the UK’s international competitiveness and long-run economic performance, it must be made permanent—which the British government has said it hopes to do.
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Adopting a distributed profits tax would greatly simplify U.S. business taxes, reduce marginal tax rates on investment, and renew our country’s commitment to pro-growth tax policy.
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