Dominika Langenmayr: Tax discounts don't buy machines yet
The federal government is allowing companies to depreciate capital goods more quickly and is reducing corporate tax from 2028. But companies only invest if they expect to generate returns.
American economist Robert E. Hall was awarded the Nobel Prize in Economics last week, along with Michael Woodford, for their work on microeconomic foundations of macroeconomic stabilization policy. Hall has also authored other influential studies, including a 1967 paper with Dale W. Jorgenson titled "Tax Policy and Investment Behavior".
This paper explores how tax policy affects corporate investment, by calculating the capital usage costs, which take into account the machine's price, depreciation, interest rates, and tax regulations. The study found that more generous tax write-offs make investments cheaper for companies.
Written by urgent.news from Handelsblatt's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
