How accelerated depreciation increases growth and reduces unemployment

« Causes for increased GDP growth in general

  • Causes for changes in unemployment rate

Research question — did a state’s status on 168 accelerated depreciation have a significant effect on its
GDP growth rate and unemployment rate?

{ you can change this Research question to another much better)

H1 — The states that a allowed a full deduction on accelerated depreciation will have a significantly higher
GDP growth rate than states that did not allow any deduction

H2 — The states that a allowed a full deduction on accelerated depreciation will have a significantly lower
enemployment rate than states that did not allow any deduction

Enacted in 2001, this provision originally allowed businesses to deduct 30% of their costs of new
depreciable assets. The purpose was to keep the economy from a recession after the September 11
terrorist attacks. The provision has remained in effect since, but the deductible amount was increased to
50% of costs in 2003 or so, then to 100% for a few years, after which it went back to 50%. The Tax Cuts
and Jobs Act passed in December of 2017 increased it to 100% again. Many states allow this deduction in
full, others disallow it entirely, and some states adjust the federal deduction.

The current law and its history can be found at US Code Search – IRC § 168

Sample Solution

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