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1 Alan Cole, Economic and Budgetary Effects of Permanent Bonus Expensing 1 (2015)

handle is hein.taxfoundation/ecbefpbo0001 and id is 1 raw text is: FOUNDATION FISCAL FACT Sept. 2015 No. 480 Economic and Budgetary Effects of Permanent Bonus Expensing By Alan Cole Economist Key Findings Fifty percent bonus expensing allows all businesses to immediately deduct (expense) half of their investment in equipment and software, unlike the current depreciation system that delays these deductions for years or decades. Bonus expensing represents an important step toward full expensing, which economists recognize to be ideal for investment and economic growth. We find that extending 50 percent bonus expensing on a permanent basis would boost the long-term level of GDP by over 1 percent, the capital stock by over 3 percent, wages by about 1 percent, and would create 214,000 jobs. Due to the growth in wages and incomes, the ultimate cost to the treasury over ten years is less than a quarter of the revenue impact without growth. The Tax Foundation is a 501(c)(3) non partisan, non profit research institution founded in 1937 to educate the public on tax policy. Based in Washington, D.C., our economic and policy analysis is guided by the principles of sound tax policy: simplicity, neutrality, transparency, and stability. ©2015 Tax Foundation Distributed under Creative Commons CC BY NC 4.0 Editor, Melodie Bowler Designer, Dan Carvajal Tax Foundation 1325 G Street, NW, Suite 950 Washington, DC 20005 202.464.6200 taxfoundation.org

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