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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Join us for a discussion of the history and future of federal and state alcohol regulation and competition, followed by a reception with beer, wine, and spirits.
Join education scholars and practitioners for a discussion about the latest NCLB research and its implications for future education policy.
What shared commitments do we have as citizens and neighbors to care for one another? How can a proper ordering of America’s political economy enable the most people to have the best life? At this event, Rep. Frank Wolf (R-VA), a longtime champion of human rights causes, and AEI President Arthur Brooks will join Wallis in addressing these and other questions.