Tax Reforms: The Need to Change Depreciation Rules

Brief Analyses | Taxes

No. 142
Thursday, November 17, 1994
by Bruce Bartlett

Our income tax system discriminates against long-term investments.  Under current rules, investments in short-lived assets are more attractive than investments in long-lived assets. In fact, the longer the required depreciation period, the less attractive the asset is - especially during periods of inflation. The remedy for this problem is called "neutral cost recovery."

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