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BPEA Article

Tax Incentives and Equipment Investment

Abstract

OVER THE PAST FORTY YEARS, tax treatment of income from capital in general, and income from producer's durable equipment in particular, has been changed in the United States an amazing number of times. Depreciation allowances have been accelerated and then retarded; depreciation methods have ranged from straight line to double-declining balance; investment tax credits have been enacted, suspended, reinstated, eliminated, re-enacted, and most recently, repealed again. In addition, both corporate and personal tax rates have moved over a substantial range.

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