Economic Consequences of Tax Reform on Agricultural Investment

摘要

The Tax Reform Act of 1986 will probably cause investment in agricultural equipment to decline through 1991, mostly because of the repeal of the investment tax credit. Five tax reform proposals debated prior to the passage of the act would also have led to decreased investment in long-lived equipment. The authors combined the cost of capital associated with each proposal and a stochastic coefficients econometric approach to forecast capital investment and rental rates. The stochastic coefficients approach allows the model to reflect changes in the overall economy and society.