Bloomberg Tax: Tax Perk to Boost Investment May Work—For Small Businesses
media mentionThe 2017 tax law allowed businesses to use full expensing, or 100% bonus depreciation, for both new and used assets, a benefit that begins phasing out in 2023. Republicans heralded it as a provision that would lead to a flood of new business investment that would buoy economic growth.
But some say it incentivizes investment in automation rather than creating jobs—a notion with some empirical support. Others say businesses might simply be front-loading their capital spending rather than spreading out investment over time as a result of the policy.
“I would suspect that, generally speaking, it looks like depreciation rewards companies that are making investments they would make anyway,” said Steve Wamhoff, director of federal tax policy at the Institute on Taxation and Economic Policy.