TAX POLICY AND INVARIANT ASSET VALUATIONS UNDER INFLATION

Myles J. Watts and Boris Bravo-Ureta

No 279013, 1984 Annual Meeting, August 5-8, Ithaca, New York from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: The objective of the paper is to derive a tax policy which yields an imputed value of an investment, in real terms, which is invariant with the rate of inflation. The approach explicitly introduces inflation into Samuelson's "fundamental theorem of tax-rate invariance." The results indicate that only real interest should be taxed and depreciation allowances should be equal to economic depreciation indexed for inflation.

Keywords: Agribusiness; Agricultural Finance (search for similar items in EconPapers)
Pages: 12
Date: 1984-08
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea84:279013

DOI: 10.22004/ag.econ.279013

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