MACHINERY REPLACEMENT, MULTIPLE OPTIMA, AND THE 1986 TAX REFORM ACT
| dc.creator | Lynne, Gary D. | |
| dc.date | 2017-04-01T19:58:33Z | |
| dc.date.accessioned | 2026-07-09T04:06:19Z | |
| dc.description | The 1986 Tax Reform Act established a first year $10,000 expensing option and, for most farm equipment, a 7-year depreciation schedule. Under a profit maximization criterion, these tax law features can lead to multiple optima dependent upon discount and marginal tax rates. For example, the economically efficient time to reinvest under a 2 percent after tax discount rate is at 4, 8, and 30 years for the grower in a 33 percent tax bracket. Thus, the profit maximization behavioral rule needs to be supplemented with knowledge about a farmer's objectives in order to select the "correct" optimal reinvestment interval. | |
| dc.identifier | doi:10.22004/ag.econ.29706 | |
| dc.identifier | https://ageconsearch.umn.edu/record/29706/files/20010179.pdf | |
| dc.identifier | http://ageconsearch.umn.edu/record/29706 | |
| dc.identifier.uri | http://hdl.handle.net/123456789/544876 | |
| dc.language | eng | |
| dc.publisher | ||
| dc.source | http://ageconsearch.umn.edu/record/29706 | |
| dc.title | MACHINERY REPLACEMENT, MULTIPLE OPTIMA, AND THE 1986 TAX REFORM ACT | |
| dc.type | Text |