OPINION:
Across America, investment in small towns and suburban communities is declining. Inflation, high interest rates, labor shortages, tariff concerns, lack of access to capital and burdensome regulations have all but halted new development.
Extending and enhancing the Tax Cuts and Jobs Act is a key to kick-starting economic growth, especially on Main Street.
In particular, reinstating 100% bonus depreciation for qualified assets and expanding the scope to include more commercial structures would help get the economy moving.
This policy is a proven incentive that fuels community investment and job creation. Enacted under the Tax Cuts and Jobs Act, bonus depreciation allowed businesses to deduct the full cost of qualifying assets in the year they were placed in service. The policy encouraged capital investment, freed up liquidity and spurred economic activity across industries.
However, it began phasing out in 2023 and is set to disappear entirely by 2027. Thanks to the House’s One Big Beautiful Bill Act, full expensing will be restored for five years, and the Senate seems prepared to make full expensing permanent.
For President Trump and members of Congress — both looking to grow the economy — expanding expensing to include more commercial structures would provide an immediate benefit. Over the past few years, the cost of building in this country has soared. According to the Bureau of Labor Statistics, construction prices have jumped more than 38% since 2020. Interest rates for commercial real estate loans are now often above 7%, compared with just 4% a few years ago.
Layer in inflated labor costs, higher costs of materials and goods and lengthy permitting delays, and it’s no surprise that business owners and developers are shelving projects.
Bonus depreciation for commercial structures can change the story by lowering up-front costs and making more projects viable. For existing structures, it encourages new investment that can be reinvested into businesses, spurring continued growth and job creation.
The impact would be immediate and nationwide. A restored and expanded bonus depreciation policy helps a car wash in Iowa, a drive-thru restaurant in Alabama and an automotive repair shop in upstate New York, all backbones of local economies.
Although providing incentives for large domestic industrial facilities such as semiconductor manufacturing is a move in the right direction, it’s not sufficient. Not every town will land a chip factory or battery plant, and those that do may wait three to five years for a shovel to even hit the ground.
The expansion of expensing for structures such as restaurants and automotive service centers would provide major incentives for investment, construction and blue-collar job creation in communities across the country, large and small, urban and rural. Not every community stands to benefit from manufacturing incentives, but the tax code can provide additional support for the types of projects awaiting construction in every ZIP code: restaurants, gas stations, service shops and local banks. These businesses build wealth locally and create durable jobs.
These businesses are community anchors. According to the U.S. Department of Agriculture, nearly 60% of rural jobs created in the past decade were in service sectors. The restaurant industry has long been a training ground for young people entering the workforce. According to the National Restaurant Association, 90% of restaurant managers started in entry-level positions, and 63% of all adults have worked in the restaurant industry at some point. Enhancing bonus depreciation will help create these jobs tomorrow.
Construction creates high-wage jobs and boosts spending across local supply chains. Every completed project creates full-time jobs while generating tax revenue through property taxes, payroll taxes and local sales taxes. It’s a fiscally responsible way to spark economic development.
Reinstating and expanding 100% bonus depreciation is a rare opportunity for Congress to adopt a bipartisan, pro-growth policy that helps small businesses, workers and communities alike. It rewards risk-taking, spurs private investment and stimulates growth in sectors that matter most to everyday Americans. It has a long track record of bipartisan success, with President Obama’s Tax Relief Act helping lower the average cost of capital for business investment by more than 75%.
The time to act is now. With capital drying up, projects getting delayed and uncertainty looming, Congress should restore 100% bonus depreciation. We have already seen momentum, with the House and the Senate clearly committed to a long-term extension of full expensing. Whether as part of this bill or a reconciliation bill next year, the bonus should be broadened to include more commercial structures. It’s the quickest, most targeted way to get America building and thriving again.
I have the privilege of meeting and working with small-business owners around the country every day. By restoring and expanding full expensing, Congress and Mr. Trump can make the One Big Beautiful Bill Act even more beautiful.
• Glen Kunofsky is the founder and CEO of SURMOUNT, a full-service commercial real estate firm advising business owners and investors globally.
