The Bush Tax Cuts: How did the 2002 tax cuts change the tax code?
The primary feature of the 2002 tax cut legislation (the Job Creation and Worker Assistance Act of 2002) was to provide for "bonus depreciation." Bonus depreciation allows firms to claim extra deductions for depreciation of a long-term physical capital investment during the early years, which reduces reported corporate profits, and thus taxes owed, in the present. This provision allowed a first-year deduction of 30 percent of the value of qualified investments made after September 10, 2001, and before September 11, 2004. This temporary provision, intended to boost investment spending during a period of economic weakness, was scheduled to expire at the end of 2004 but was extended in 2003.