Investment slows when tax policies are uncertain

The National Association of Manufacturers recently conducted a survey of businesses. Here’s the short form.

The release today of NAM/IndustryWeek Survey of Manufacturers confirms what manufacturers have long known, the expiration of the on-again and off-again investment tax incentives have companies holding off on making key purchases and thus delays the robust economic growth we need. According to the survey, the expiration of two of the key incentives for manufacturers, the “enhanced” Section 179 expensing and the so-called “bonus depreciation,” forces many manufacturers to rethink with investment plans.

Here’s the survey.

Although this has to do with specific federal tax policies, the principle is universal. When governments fail to establish consistent, enduring policies, the effect can be, and often is, chilling.

Our state legislature’s refusal to extend tax incentives for R&D and data centers is a case in point.