Tax Code, Section 179, Depreciation, Economic Growth.


Despite substantial evidence that economic growth is influenced by taxation, the impact of Section 179 on GDP is unclear. Section 179 of the Internal Revenue Code enacted in 1958 has operated for several decades in the United States. In addition, in late 2010, two congressional acts affecting Section 179 have been passed, i.e. The Tax Relief Act of 2010 and The Small Business Jobs Act of 2010. The essence of these adoptions is to provide incentives for corporate as well as individual taxpayers. However, there are concerns as to the degree of economic growth these adoptions will provide. This research is therefore focused on showing the correlation between these Section 179 deductions, depreciation and economic growth as the Section 179 figures are debated and changed annually. The study suggests that annual increments of capital depreciation deductions will aid corporate growth as well as other variables that affect economic growth in the United States. However, the benefits for small business are lower than for corporations.

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