Impact of Full Expensing on Manufacturing Investments

This document is a report that outlines the concept of full expensing, also known as 100% accelerated depreciation, which allows manufacturers to recover the full cost of capital investments in the year of purchase. It explains the importance of full expensing for manufacturers, particularly in capital-intensive industries, as it enhances the cost-effectiveness of acquiring expensive equipment and machinery. The report details how tax reform has implemented full expensing, leading to increased productivity and job creation in the manufacturing sector. It also discusses the phasedown of full expensing that began in 2023, reducing the rate to 80% and outlining future reductions. The report emphasizes the potential consequences of this phasedown, including increased costs for capital investments and the risk to America's manufacturing leadership. It concludes with a call for Congress to make full expensing permanent to support growth and investment in the manufacturing industry.