Long-Run Effects of the Accelerated Cost Recovery System
Long-Run Effects of the Accelerated Cost Recovery System

Author: Yolanda K. Henderson

Publisher:

Published: 1988

Total Pages:

ISBN-13:

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Much of the debate surrounding the enactment of President Reagan's tax plan was concerned with the short run effects of macroeconomic stimulation. Now that the Economic Recovery Tax Act of 1981 has become law, it is appropriate to look again at the long run effect of these tax cuts. This paper measures, for 37 different assets and for 18 different industries, the reduction in effective corporate tax rates that result from the acceleration of depreciation allowances and the expansion of the investment tax credit. It also uses a detailed dynamic general equilibrium model of the U.S. economy to simulate the effects of the new Accelerated Cost Recovery System (ACRS) on revenues, investment, long run growth, and capital allocation among industries. We find significant welfare gains from ACRS, but we find larger welfare gains from alternative plans that were not adopted.

Depreciation Lives and Methods
Depreciation Lives and Methods

Author: David W. Brazell

Publisher:

Published: 2001

Total Pages:

ISBN-13:

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In part because of concerns that the tax depreciation system may be dated and may not properly measure income, Congress directed that the Treasury study the current tax depreciation system. This paper is derived from the staff work for the Treasury Study. The paper first discusses the rationale for a depreciation allowance. It next describes the current tax depreciation system. Using the cost of capital, the paper evaluates the current tax depreciation system. It then discusses several comprehensive reforms of the tax depreciation system, and calculates the effects of these reforms on the cost of capital. The final section discusses several practical problems with the current tax depreciation system.

Capital Formation and Retention
Capital Formation and Retention

Author: United States. Congress. House. Committee on Small Business. Subcommittee on Access to Equity Capital and Business Opportunities

Publisher:

Published: 1979

Total Pages: 176

ISBN-13:

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