Steven M. Fazzari analyzes several major changes in the tax system that affect corporate capital spending incentives. Fazzari considers how investment tax credits, tax depreciation schedules, and the corporate tax rate affect the after-tax cost of capital for a variety of asset classes. The recent changes in these aspects of the tax system are discussed in an integrated framework that illustrates their combined effect on the cost of capital. The author concludes that the after-tax cost of capital will rise as a result of tax reform, which will reduce the long-run capital stock in the United States. How big the reduction will be, however, is uncertain. Fazzari shows that, under plausible assumptions, the changes need not be as dramatic as many analysts predict.