On March 9th, President Bush signed the Job Creation and Worker Assistance Act of 2002. The Act included a temporary increase in depreciation allowances for business spending on equipment and software (Eamp;S) in the form of 30 percent partial expensing. In this paper we explore the impact of...

In the late 1970s, many economists argued that the deleterious effects of inflation on the user cost of capital for U.S. firms were large. Since that time, the tax code has changed, the level of inflation has dropped significantly, and the of investment has evolved considerably. In this paper,...

Auerbach (1979, 1981) has demonstrated that inflation can lead to large inter-asset distortions, with the negative effects of higher inflation unambiguously declining with asset life. We show that this is true only if depreciation is treated as geometric for tax purposes. When depreciation is...

In this paper, we use criteria developed in the literature on economic growth to compare the levels of U.S. net investment and the U.S. capital stock (relative to GDP) to their golden rule levels. Specific comparisons are made for total fixed capital, business fixed capital, producers' durable...

On March 9th, President Bush signed the Job Creation and Worker Assistance Act of 2002. The Act included a temporary increase in depreciation allowances for business spending on equipment and software (E&S) in the form of 30 percent partial expensing. In this paper we explore the impact of the...

Auerbach demonstrated that inflation can lead to interasset distortions, with the negative effects of higher inflation unambiguously declining with asset life in the case of geometric economic and tax depreciation. We show that, when tax depreciation is straight-line, higher inflation can have...