World War II Tax Amortization Revived

Abstract

SINCE last June and the proof of Korea that we must again prepare to defend ourselves, much of the World War II industrial and financial machinery of government has been resuscitated, but, in many cases, with a new twist. The World War II method of offering a tax amortization inducement, allowing the private investor an accelerated write-off and, thus, telescoping his risk into the initial period of his investment, was revived on Sept. 23, 1950, as part of the Revenue Act of 1950. It was this method of rapid tax writeoff which, coupled with government ownership, obtained the facilities for the prosecution of World War II. Substantial expansion through the use of private funds (equity capital, borrowed capital, or otherwise) cannot be undertaken under high tax rates and long-term recapture of the investment through normal depreciation. To understand what is happening today, it is necessary to compare the present situation with that ...