Full expensing of capital investments and lower tax rates are “two great tastes that taste great together.” That’s the word from the National Taxpayers Union Foundation (NTUF) in its newest policy study, an examination of the policy arguments surrounding cost recovery policy in tax reform. The latest in NTUF’s “What’s the Deal With…” series, the paper discusses key arguments for and against full expensing and addresses the political gamesmanship that has held it back.
Full expensing, including NTUF’s newest paper, will be the subject of discussion at a tax reform event hosted by NTUF’s sister organization, the National Taxpayers Union (NTU), featuring remarks Senator Ted Cruz (R-TX). The event will take place at 3 P.M. Thursday October 5th in room SD-106 at the Capitol. After remarks by Senator Cruz laying out his principles for tax reform, a tax policy discussion featuring NTUF Executive Vice President Andrew Moylan and the Tax Foundation’s Kyle Pomerleau will be moderated by NTU’s Mattie Duppler.
Earlier this year, NTU helped lead a coalition of 29 other organizations urging Congress to adopt full expensing for business investments. Other organizations that signed on to the letter include a “who’s who” of conservative groups: Americans for Tax Reform, Heritage Action for America, FreedomWorks, Citizens Against Government Waste, and many others.
NTUF’s Executive Vice President Andrew Moylan said, “Smarter cost recovery policy is the ‘killer app’ of tax reform - a subtle feature that can unlock tremendous economic expansion. It should be a key provision in any pro-growth tax reform proposal.” He continued, saying, “The 1986 tax reform package made the mistake of actually extending depreciation schedules, blunting the economic impact of what was otherwise a landmark reform. Congress should avoid repeating that mistake by ensuring that 2017’s tax reform package includes lower rates and smarter cost recovery.”
Resources:
What’s the Deal with Full Expensing?
Flowchart: Cost Recovery under MACRS vs. Full Expensing
This paper is the second in a series titled What’s The Deal With..., with each designed to provide non-technical explanations of a highly technical tax policy issue – and options for addressing it. The first in the series covered options for addressing base erosion.
NTUF is a non-partisan research and educational organization dedicated to showing Americans how taxes, government spending, and regulations affect them. More information is available at ntu.org/foundation/.