The existing tax code is biased against capital-intensive manufacturers, as it prevents companies from deducting capital costs the same way they deduct labor costs.
Fixing the bias against capital investment is preferable to pursuing industrial policy through the tax code, as subsidies tend to be ineffective and tariffs often weaken protected domestic industries and harm downstream industries.
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Policymakers actively marginalized the manufacturing sector by saddling them with cost recovery rules that prevent them from deducting the full cost of investment in physical plant and equipment. Going forward, policymakers should avoid haphazard fixes, targeted measures, and protectionism.
50 min read
Contrary to the president’s promises, the tariffs will cause short-term pain and long-term pain, no matter the ways people and businesses change their behavior.
5 min read
Broad, pro-investment tax policy matters for growth, and the US has plenty of opportunities to make improvements, particularly given the advantages our cross-Pacific rival confers on its firms.
5 min read
Growing levels of waste and pollution, paired with increasing burdens on taxpayers to address environmental problems, have spurned policymakers in the US and abroad to encourage producers to be responsible, either financially or operationally, for the end-life of their products.
34 min read
When the government imposes a tariff, it may be trading jobs and production in one part of the economy for jobs in another part of the economy by increasing production costs for downstream industries.
6 min read
To recover from the pandemic and put the global economy on a trajectory for growth, policymakers need to aim for more generous and permanent capital allowances. This will spur real investment and can also contribute to more environmentally friendly production across the globe.
31 min read
While the approaches differ, they share a reliance on similar linkages: new capital investment drives productivity growth, which grows the economy and raises wages for workers.
37 min read
The U.S. House of Representatives has passed a highly anticipated bipartisan tax deal. The Tax Relief for American Workers and Families Act now awaits action in the Senate.
6 min read
Historical evidence and recent studies have shown that retaliatory tax and trade proposals raise prices and reduce the quantity of goods and services available to U.S. businesses and consumers, resulting in lower incomes, reduced employment, and lower economic output.
5 min read
The Trump campaign is mulling a massive tax increase on American purchases from China. If reelected, he might quintuple the tax, imposing tariffs of 60 percent on imports from China. The economic ramifications would be significant and unwelcome.
5 min read
The House Ways and Means Committee has advanced a tax deal to the House floor that would temporarily—and retroactively—restore two major business deductions for cost recovery and expand the child tax credit through 2025.
10 min read
Lawmakers should prioritize creating a tax system that supports investment more broadly rather than subsidizing specific industries and allowing broad, neutral pro-investment provisions to expire.
3 min read
The current tax treatment of R&D expenses is irrational, complicated, and counterproductive. Fortunately, fixing this problem is a bipartisan issue.
4 min read
Making expensing permanent is especially important now, when the economy is threatened with a recession and inflation remains high.
7 min read
To recover from the pandemic and put the global economy on a trajectory for growth, policymakers need to aim for more generous and permanent capital allowances. This will spur real investment and can also contribute to more environmentally friendly production across the globe.
33 min read
As final negotiations occur between the House and Senate, legislators should avoid adopting new policies that would jeopardize Kentucky’s business tax competitiveness.
5 min read
Instead of such a complex and inefficient system, policymakers should move to full expensing as part of the effort to build.
3 min read
Spreading deductions for research investments across five years instead of one is an innovation killer.
Lawmakers should recognize both the growing importance of business R&D and the need to support it through a commonsense tax policy, namely a return to full and immediate expensing for R&D.
6 min read
The Senate has begun debate on the so-called Chips bill, which would provide $52 billion in grants and $24 billion in tax credits to supposedly strengthen the production of semiconductors in the U.S.
3 min read
The ongoing economic uncertainty from the COVID-19 pandemic, supply chain disruptions, and current inflationary pressures have highlighted the importance of investment.
33 min read
Policymakers actively marginalized the manufacturing sector by saddling them with cost recovery rules that prevent them from deducting the full cost of investment in physical plant and equipment. Going forward, policymakers should avoid haphazard fixes, targeted measures, and protectionism.
50 min read
As lawmakers today look for ways to boost American industry and reduce costs for consumers, they should pay attention to the mountains of evidence that the Trump-Biden tariffs have harmed American consumers and businesses.
6 min read