A Historical Look at Immediate Expensing and Its Potential for Stimulating Economic Growth

By By David E. Franasiak, Robyn Gaudon, Kate Johnson, Nicole Ruzinski

The concept of immediate expensing as a potential tax reform to stimulate economic growth has been around for decades. Most recently, the House Republicans have issued a tax reform “blueprint” that calls for immediate expensing. The Republican proposal argues that “allowing investments to be immediately written off provides a greater incentive to invest than is provided through interest deductions under current law…” With immediate expensing as potential fodder for tax reform legislation in 2016, this note examines the history and debates around the concept since it was raised in tax reform discussions in the 1980s.

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