The Positive Revenue and Economic Impact of Section 179D the Commercial Buildings Energy-Efficiency Tax Deduction

12 Pages Posted: 12 Dec 2019

Date Written: November 25, 2019

Abstract

The United States Internal Revenue Code has had a tax deduction for the design of energy efficient public or commercial buildings since 2005. However, this tax break has always been a short-term provision, extended near year end for a year or two at a time, largely because of budget exigencies created by Congressional PAYGO rules. Since the provision ostensibly costs the federal government a modicum of foregone revenue, Congress must find a way to make up for that revenue.

However, a proper accounting for the true cost savings from reduced energy consumption from the implementation of 179D would demonstrate that the provision almost assuredly saves governments--the federal, state, and local altogether--money from its implementation, by allowing local governments to overcome purely political short-term budget constraints and allowing them to make decisions that are best for taxpayers in the long run by incentivizing cost-effective energy-saving investments.

Keywords: taxes, energy, national accounting

JEL Classification: H21, H23, H43, H71, H76, H83, Q51

Suggested Citation

Brannon, Ike, The Positive Revenue and Economic Impact of Section 179D the Commercial Buildings Energy-Efficiency Tax Deduction (November 25, 2019). Available at SSRN: https://ssrn.com/abstract=3493233 or http://dx.doi.org/10.2139/ssrn.3493233

Ike Brannon (Contact Author)

The Jack Kemp Foundation ( email )

1200 New Hampshire Avenue N.W.
suite 800
Washington, DC 20036
United States

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