About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 Erica York, Options for Improving the Tax Treatment of Structures 1 (2020)

handle is hein.taxfoundation/tfoptim0001 and id is 1 raw text is: Options for Improving the Tax Treatment of Structures Erica York Economist Key Findings The Tax Foundation is the nation's leading independent tax policy research organization. Since 1937, our research, analysis, and experts have informed smarter tax policy at the federal, state, and global levels. We are a 501(c)(3) nonprofit organization. @2020 Tax Foundation Distributed under Creative Commons CC-BY NC 4.0 Editor, Rachel Shuster Designer, Dan Carvajal Tax Foundation 1325 G Street, NW, Suite 950 Washington, DC 20005 202.464.6200 taxfoundation.org * Removing tax policy barriers can help businesses and individuals invest, work, create jobs, and lift the economy during a post-pandemic recovery without requiring lawmakers to create new spending programs. One of the most cost-efficient options available to lawmakers is to improve the cost recovery treatment of structures. * Residential structures must be depreciated over a 27.5-year-period and nonresidential structures over a 39-year period. Because of the time value of money, the delay in taking deductions for tax purposes means the real value of the deduction to the business is less than the original outlay, which increases the cost of capital and leads to a lower level of investment and economic growth. * A neutral tax would allow an immediate deduction for these outlays, the policy of full expensing. Alternatively, a policy that maintains the present value of deductions over time by adjusting the depreciation allowances would also be neutral toward investment; this policy is called neutral cost recovery. * One challenge of removing the bias against new investment is that it creates a huge disparity between new and existing structures. Rather than retain a bias against new investments by enacting policies short of full expensing, lawmakers could extend neutral tax treatment to both new and existing structures. * Each of these policies has trade-offs in terms of impact on economic growth, the disparity between new and existing structures, and the cost to the government. FISCAL FACT No. 712 May 2020

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most