اثرات تشویقی استهلاک جایزه
|کد مقاله||سال انتشار||تعداد صفحات مقاله انگلیسی||ترجمه فارسی|
|7148||2010||26 صفحه PDF||سفارش دهید|
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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of Accounting and Public Policy, Volume 29, Issue 6, November–December 2010, Pages 578–603
This study examines the effect on capital expenditures of “bonus depreciation,” which was intended to stimulate such spending by allowing businesses to immediately expense a portion of the cost of qualified capital expenditures from late 2001 through 2004. After controlling for many previously documented determinants of capital expenditures, some of our results indicate that capital expenditures during bonus depreciation’s availability were greater than those during the time it was not available, consistent with the expected effect. However, other results indicate that bonus depreciation had an insignificant effect on capital expenditures. These mixed findings generally persist through several sensitivity analyses. We interpret these results as weakly supportive evidence that Congress attained its goal of stimulating capital spending.
Congress has often enacted tax law provisions that are intended to increase capital spending by businesses, such as the investment tax credit and accelerated depreciation deductions. Empirical research has examined these tax provisions’ effect on capital spending, with results that have not always been conclusive and consistent. One possible reason for such results may be that major changes in these tax provisions have generally coincided with other tax law changes that also might be expected to affect capital spending, such as tax rate changes. Nonetheless, Congress has used favorable tax provisions with the intent of inducing capital spending,2 so evidence of their effectiveness would be useful for tax policy makers. This study focuses on the “bonus depreciation” provisions that were enacted as part of the 2002 and 2003 Tax Acts, which allowed businesses to immediately expense 30% and 50%, respectively, of the cost of qualified capital expenditures.3 Bonus depreciation provides a unique opportunity to study the effect of tax depreciation on capital spending for several reasons. First, the 2002 and 2003 Tax Acts did not include tax rate or investment tax credit changes; bonus depreciation was the only provision that would be expected to directly affect capital spending.4 Second, the 2002 Tax Act was an economic stimulus bill that was enacted largely in response to the terrorist attacks of September 11, 2001. This event, whose date was made the effective date of the bonus depreciation provision, was unexpected, so businesses could not have delayed capital spending that they would have made even without bonus depreciation in order to take advantage of it. Third, bonus depreciation was allowed for both regular and alternative minimum tax purposes, thus avoiding complications that the alternative minimum tax might otherwise introduce. Fourth, bonus depreciation was available to both large and small businesses, unlike the immediate expensing available under Section 179. Bonus depreciation’s availability to larger, publicly-traded businesses allows richer and more readily-available data sources (e.g., Compustat) to be used, providing larger sample sizes and an enhanced ability to control for various other factors that might affect capital spending. The empirical model of capital expenditures developed here uses quarterly data and is estimated over the years 1990–2006, with indicator variables partitioning the data into five time periods: a pre-bonus depreciation era (including recessionary and non-recessionary time periods); an era when deliberations regarding the Bill that became the 2002 Tax Act were ongoing (and for which bonus depreciation was made retroactively applicable); an era following the 2002 Tax Act’s enactment; an era following the 2003 Tax Act’s enactment; and a post-bonus depreciation era. If firms responded to bonus depreciation by increasing their capital spending, capital expenditures during the bonus depreciation eras would be greater than during the pre- and post-bonus depreciation eras. Some of the results indicate that bonus depreciation led to greater capital expenditures. However, the support for a bonus depreciation effect is limited, with other results indicating it had an insignificant effect. These findings are relatively robust through several sensitivity analyses and occur despite having included many control variables (e.g., user cost of capital, capital intensity, debt, cash flows, sales growth) in the empirical model. Overall, the results provide supportive, but weak, evidence that Congress attained its goal of stimulating capital spending by making bonus depreciation available, but they should be interpreted cautiously because of their mixed nature. The next section of the paper describes the bonus depreciation provisions in the 2002 and 2003 Tax Acts. Following that is a discussion of the theoretical background and a review of relevant empirical studies. The method of our study is then described, and the results are presented and discussed. Finally, conclusions are drawn.
نتیجه گیری انگلیسی
Congress has used tax incentives many times, and in many forms, over the years to try to induce businesses to increase their capital spending. The bonus depreciation that Congress enacted in 2002 and 2003 was yet another attempt to attain this goal. Prior research has studied the effects of tax incentives on capital spending, often finding that they do have their intended effect. However, such research has not focused on depreciation tax incentives per se because changes in them had always occurred simultaneously with other tax factors, such as investment tax credits and corporate tax rates. There is reason to believe that depreciation tax incentives may not lead to increased capital spending. Business executives claim in surveys that tax depreciation is a relatively unimportant factor when making capital expenditure decisions, firms might not respond to such tax incentive since, under US financial reporting rules, they will not reap a reduced income tax expense and effective tax rate in their financial statements, the price of capital goods may have increased due to bonus depreciation, and the stimulus provided by bonus depreciation may have been insufficiently large. The purpose of this study is to examine the effect of bonus depreciation on firms’ capital expenditures. This change in tax depreciation was unique because it was not accompanied by changes in investment tax credits, corporate tax rates, or other factors that would be expected to directly affect business capital spending. We estimate a model of capital expenditures that includes as explanatory variables indicator variables for bonus depreciation’s availability, as well as a number of control variables to allow for the possibility that bonus depreciation dampened a decline in capital spending. After including these control variables, we expect that capital expenditures will be greater during bonus depreciation’s availability than before or after it. We find some evidence consistent with this expectation, but we also find some evidence of an insignificant effect. These results weakly indicate that bonus depreciation stimulated capital spending and suggests that Congress may be furthering its goal of stimulating capital spending when enacting depreciation tax incentives, but the mixed nature of the results mean that such a conclusion should be reached cautiously.