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1 Scott Greenberg, Cost Recovery for New Corporate Investments in 2012 1 (2016)

handle is hein.taxfoundation/crencorpiv0001 and id is 1 raw text is: 






TAX
FOUNDATION

FISCAL

FACT
Jan. 2016
No. 495


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@2016 Tax Foundation
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Cost Recovery for New Corporate


Investments in 2012



By  Scott   Greenberg
    Analyst



Key   Findings


    Cost recovery refers to the extent to which businesses are able to deduct the full
    cost of their investments over time.


    Many  economists argue that a system of full cost recovery would be maximally
    efficient. However, the current U.S. tax code requires corporations to deduct
    investments over time periods ranging up to 50 years, leading to limited cost
    recovery.


    Overall, U.S. corporations will only be able to deduct 87.14 percent of the value of
    investments made  in 2012 over time.


    If not for bonus depreciation, corporations would only have been able to deduct
    83.08 percent of the value of investments made in 2012 over time.


    The extent of cost recovery varies by industrial sector and by asset, reflecting
    the numerous  depreciation schedules to which different industries and assets are
    subject.


    The current system of cost recovery prevents corporations from making
    investments that would otherwise be profitable under a system of full cost
    recovery.

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