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Dynamic Analysis of Income Taxes on Farm Firms
Author(s) -
Hardesty Sermin D.,
Carman Hoy F.,
Moore Charles V.
Publication year - 1987
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1242286
Subject(s) - investment (military) , production (economics) , economics , investment decisions , business , microeconomics , income tax , public economics , industrial organization , politics , political science , law
A dynamic optimization model is used to analyze the effects of tax law changes instituted by the Economic Recovery Tax Act of 1981 on farm firm decision making. The model incorporates the integrated nature of the firm's production, investment, and financing decisions. Because of interactions between tax provisions, the tax changes had the unexpected effect of reducing optimal investment in machinery and land.