Manufacturer “bonus depreciation” rules and impact

An article in the New York Times (Feb 3, 2012) describes the “bonus depreciation” rule that permits capital investments to be treated as costs for the current year and thus subsidizes equipment purchases.  The impact is to incentivize capital investments while sacrificing taxes, with the potential taxes recovered over time.  The example of a logistics company investing $ 225 million in trucks, thus spurring growth in manufacturing, is one such impact. Will manufacturers demand this subsidy as a continued tax break, and will such incentives be beneficial overall across the US manufacturing supply chain ? Given US law changes, would such competitive benefits continue to persist if other competing economies follow suit ? How should companies sharing a supply chain coordinate to leverage the benefits of such rules, given that they are available temporarily ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , , . Bookmark the permalink.

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