TY  - JOUR
AU  - Fullerton,Don
AU  - Lyon,Andrew B.
TI  - Does the Tax System Favor Investment in High-Tech or Smoke-Stack Industries?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1600
PY  - 1987
Y2  - October 1987
UR  - http://www.nber.org/papers/w1600
L1  - http://www.nber.org/papers/w1600.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

Andrew B. Lyon
PricewaterhouseCoopers LLP
1301 K Street, NW  Suite 800W
Washington, DC 20005
Tel: 202-414-3865
E-Mail: drew.lyon@us.pwc.com
M2  - featured in NBER digest on 1985-07-01
AB  - When tax rates vary by asset, a "hidden" industrial policy may aid industries that invest in a certain mix of assets. In this paper, we examine whether differential use of depreciable assets gives rise to differential tax treatment of high technology industries relative to other industries. First, we calculate the total effective tax rate on a marginal investment in each of 34 assets. Next, using these asset-specific tax rates and weighting by the use of these assets in each of 73 different industries, we calculate total effective tax rates at the industry level. We find considerable variation within the high-tech sector and within the more traditional sector, but for the case of a taxable firm with a given debt/equity ratio, we do not find any systematic differences between overall rates in the two sectors.
ER  -