All Related Articles
Economic and Budgetary Impact of Extending Full Expensing to Structures
Full expensing is one of the most powerful pro-growth policies in terms of revenue forgone. Given that structures comprise a large share of the private capital stock, improving their tax treatment would end a large bias against investment in the tax code.
14 min readGILTI and Other Conformity Issues Still Loom for States in 2020
Even two years after enactment of the federal Tax Cuts and Jobs Act (TCJA), many states have yet to issue guidance explaining how they conform to key provisions of the law, particularly those pertaining to international income.
27 min read
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.
3 min read
Kansas Tax Modernization: A Framework for Stable, Fair, Pro-Growth Reform
Our new report outlines various policy recommendations for Kansas to consider in order to begin a robust and bipartisan conversation about modernizing the state’s tax code to suit a 21st century economy.
15 min read
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.
4 min read
Carbon Tax and Revenue Recycling: Revenue, Economic, and Distributional Implications
In our new report, we explore the design implications of a carbon tax and provide estimates for revenue, economic, and distributional effects of three potential carbon tax and revenue recycling proposals. Each proposal faces different trade-offs and achieves different policy goals.
23 min read
Retail Glitch Awaits Congressional Fix
2 min read
Better than the Rest
2 min read
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