FARM MACHINERY INVESTMENT AND THE TAX REFORM ACT OF 1986

The Tax Reform Act of 1986 significantly changed incentives for investing. This analysis specifically examines how changes in marginal tax rates, depreciation schedules, and the investment tax credit altered the cost of capital and net investment in agriculture. A stochastic coefficients econometric methodology is used to estimate an investment function which is then used to simulate the effects of tax reform. Estimates indicated that relative to prior law, the Tax Reform Act will reduce the capital stock of farm machinery and equipment by nearly $4 billion.


Issue Date:
1992-07
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/30743
Published in:
Journal of Agricultural and Resource Economics, Volume 17, Number 1
Page range:
66-79
Total Pages:
14




 Record created 2017-04-01, last modified 2017-04-04

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