In this joint white paper, Nick Loris—Executive Vice President of Policy at C3 Solutions—and Josh T. Smith—energy‑policy lead at the Abundance Institute and visiting fellow with C3—propose replacing today’s patchwork of clean‑energy tax credits with permanent, economy‑wide full expensing for all new capital investments and R&D. Immediate expensing lets businesses deduct the entire cost of plant, equipment, and research in the year the spending occurs, eliminating multi‑year depreciation schedules that discourage up‑front investment. By giving every industry—from advanced manufacturing to next‑generation clean energy—the same neutral tax treatment, the authors argue, Congress can spur broad‑based private investment without picking winners or losers.
The analysis shows full expensing delivers more growth per federal dollar than targeted subsidies while still advancing environmental goals. Tax‑Foundation modeling suggests a permanent policy would boost long‑run GDP by roughly 1.8 percent, create hundreds of thousands of jobs, and strengthen U.S. competitiveness, all at just over one‑quarter the projected ten‑year cost of maintaining Inflation Reduction Act credits. Because every sector can claim the deduction, immediate expensing also offers a politically viable swap: lawmakers can phase down ballooning subsidies yet remain pro‑investment and pro‑environment, giving businesses the long‑term certainty they need to build America’s cleaner, more prosperous energy future.
