TY  - JOUR
AU  - Fullerton,Don
AU  - Henderson,Yolanda K.
TI  - Long-Run Effects of the Accelerated Cost Recovery System
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 828
PY  - 1988
Y2  - 1988
UR  - http://www.nber.org/papers/w0828
L1  - http://www.nber.org/papers/w0828.pdf
N1  - Author contact info:
Don Fullerton
Department of Finance
University of Illinois
BIF Box#30 (MC520)
515 East Gregory Drive
Champaign, IL  61820
Tel: 217/244-3621
Fax: 217/244-3102
E-Mail: dfullert@illinois.edu

yolanda henderson
E-Mail: yolahenderson@cox.net
AB  - Much of the debate surrounding the enactment of President Reagan's tax plan was concerned with the short run effects of macroeconomic stimulation.  Now that the Economic Recovery Tax Act of 1981 has become law, it is appropriate to look again at the long run effect of these tax cuts. This paper measures, for 37 different assets and for 18 different industries, the reduction in effective corporate tax rates that result from the acceleration of depreciation allowances and the expansion of the investment tax credit. It also uses a detailed dynamic general equilibrium model of the U.S. economy to simulate the effects of the new Accelerated Cost Recovery System (ACRS) on revenues, investment, long run growth, and capital allocation among industries. We find significant welfare gains from ACRS, but we find larger welfare gains from alternative plans that were not adopted.
ER  -