INCOME TAXES AND INVESTMENT DECISIONS: THE LONG-LIFE APPRECIATING ASSET CASE |
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| Authors: | ANTHONY H. CHISHOLM |
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| Affiliation: | Australian National University, University of California |
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| Abstract: | 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. |
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