Working Paper: NBER ID: w0848
Authors: Alan J. Auerbach
Abstract: The Economic Recovery Tax Act of 1981 included the largest business tax cut in U.S. history, embodied in the Accelerated Cost Recovery System. This paper describes in detail the provisions of the new treatment of depreciable property ,and analyzes in a fairly nontechnical way its economic impact. Particular attention is paid to a novel part of ACRS that creates a "safe harbor" for a wide range of sale-leaseback arrangements, effectively permitting the sale of depreciation deductions by investors without taxable income.
Keywords: tax policy; depreciation; investment; economic recovery tax act
JEL Codes: H25; H32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| ACRS (R50) | Investment in the U.S. (F21) |
| ACRS (R50) | Sale-leaseback arrangements (L14) |
| ACRS (R50) | Net operating loss for taxpayers (H24) |