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Expensing Is Key in Any Pro‐​Growth Tax Package

Adam N. Michel of the Cato Institute writes about pro-growth tax policies.

The C3 Take
  • Immediate expensing allows a company to deduct the full cost of a new investment in the year that the investment occured, rather than over multiple years through a lengthy depreciation schedule.
  • The year after immediate expensing was passed (in the 2017 Tax Cuts and Jobs Act), energy and environmental research and development expenses jumped by $3 billion.
  • A deduction in a few years will yield less of a return for a business than a deduction today, due to inflation.
  • Pro-growth tax policies can spur economic development and energy innovation.

“As Congress searches for policies to meet our current economic challenges, maintaining full expensing—which has begun to phase out—should be top of the list. Full expensing protects business investment from the costs of inflation and supports economic growth by reducing barriers to new investments.”

Read the full article here.

The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.

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