Short-Term Incentive Effects of Temporary Full Capital Asset Expensing

<p>The Tax Relief, Unemployment Compensation Reauthorization, and Job Creation Act of 2010 (2010 Tax Relief Act) temporarily modified capital asset expensing provisions, increasing the allowed bonus depreciation percentage from 50% to 100%. The legislative intent of the provision was to encourage capital investment by firms, although prior research suggests that capital expenditures did not increase during the availability of 30% or 50% bonus depreciation. I find that the availability of 100% bonus depreciation significantly increases the likelihood that firms increase capital expenditures, as well as increases the magnitude of capital expenditures. Overall, my evidence highlights how temporary changes in capital asset expensing provisions affect firms’ behavior with respect to investment decisions and that the market reacts both positively and negatively to those decisions.</p>

Name thesis:degree_name

Doctor of Philosophy (PhD)

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Accounting

Year

2016

Author dc:creator

• Witesman, John David Patrick

Contributors dc:contributor

• Susan M. Albring

• 2010 Tax Relief Act
• bonus depreciation
• capital asset expensing provisions
• capital expenditures
• Tax Relief
• Unemployment Compensation Reauthorization
• and Job Creation Act of 2010
• Accounting

Repository record dc:identifier

https://surface.syr.edu/etd/460

OAI identifier oai:identifier

oai:surface.syr.edu:etd-1460