An Incentive for Investment Hurting Growth?: An Analysis of Section 179 Expensing and its Impact on Job Growth Through Related

Abstract

This paper examines the economic impacts of Section 179 expensing in the Federal Tax Code. More specifically, it examines the impact of this incentive on automation and technological unemployment through a system dynamics simulation involving the professional industry, the manufacturing industry, and the rest of the United States economy. It also provides an overview of current trends towards automation, along with Recommendations for responsive tax policies to combat problems that could arise. Based on the results of the model and the analysis of current trends, both the professional and manufacturing industries face potential risks from automation, due to an increase in the Section 179 allowance, but the economy as a whole will benefit.