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1 William McBride, The Economic and Budgetary Effects of Bonus Expensing 1 (2014)

handle is hein.taxfoundation/taxfaal0001 and id is 1 raw text is: TAX( FOUNDATION The Economic and Budgetary Effects Apr. 2014 of Bonus Expensing No. 428 By William McBride Chief Economist Key Findings 50 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 GDP by over 1 percent, the capital stock by over 3 percent, wages by about 1 percent, and would create 212,000 jobs. These benefits go primarily to workers with low incomes due to higher productivity, higher wages, and more jobs. Due to the growth in wages and incomes, total federal tax revenue would increase by about $23 billion per year. ................................................................................................... : .........................................................................................................................................................................................................................................................................................................................................................................................................