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INCOME TAXES AND INVESTMENT DECISIONS: THE LONG‐LIFE APPRECIATING ASSET CASE
Author(s) -
CHISHOLM ANTHONY H.
Publication year - 1975
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1975.tb00270.x
Subject(s) - economics , asset (computer security) , production (economics) , investment (military) , income tax , tax deferral , gross income , labour economics , state income tax , public economics , tax reform , microeconomics , computer security , politics , computer science , political science , law
In this paper a neoclasical tax incidence model is used to analyze the effects of alternative methods of taxing income derived from products whose production process is long‐lived. Forestry is selected as a classic case. Compared with a “neutral” income tax, two other types of income tax, which approximate those currently applying to the forestry sectors in Australia and the United States, respectively, bias production toward longer growth periods, increase land (site) values, and depress timber prices.