While reducing statutory rates would provide a benefit to existing investments and improve the valuation of the company from the point of view of the shareholders, expanding expensing and accelerated depreciation provisions would generate returns over the lifetime of the company by improving cash flows and thereby enhancing firm value. Both types of reforms are critical to firms that are deciding what new investments to undertake and which activities will generate the highest return. In economic terms, the user cost of capital, or the implicit annual cost of investing in physical capital, is determined by not only the headline corporate tax rate, but also other factors such as the rate of depreciation as well as the interest rate. Therefore, any changes to either the tax rates or the provisions affecting the return from capital, would lead to a change in the user cost, which would affect physical capital investments by firms.
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Please join us for the third-annual Walter Berns Constitution Day Lecture as James Ceasar, Harry F. Byrd Professor of Politics at the University of Virginia, explores some of the Constitution’s most significant contributions to political theory, focusing on themes that have been largely unexamined in current scholarship.
We invite you to join us for this year’s international conference on housing risk — cosponsored by the Collateral Risk Network and AEI International Center on Housing Risk — which will focus on new mortgage and collateral risk measures and their applications.
Please join us as Speaker John Boehner (R-OH) delivers his five-point policy vision to reset America’s economy.
Please join us as a panel of distinguished experts explore the implications of the report and the consumer role in shaping the future of Medicare.