دانلود رایگان مقاله انگلیسی مالیات نزولی استهلاک و سرمایه گذاری مزرعه: شواهدی از میشیگان - امرالد 2018

Abstract

Purpose – The purpose of this paper is to examine the use of accelerated depreciation deductions, which includes Section 179 and bonus depreciation, taken in the first year of asset life by Michigan farms. The frequency, value and influence of accelerated depreciation on farm investment are also analyzed. Design/methodology/approach – Accrual adjusted income statements, balance sheets, depreciation schedules, and income tax information for 66 Michigan farms from 2004 to 2014 provide data for the analysis. The present value of the accelerated deduction and change in the cost of capital were calculated. Finally, investment elasticities were used to arrive at the change in investment due to accelerated depreciation. Findings – Accelerated depreciation was utilized across all applicable asset classes. Section 179 was used more often than bonus depreciation in part because it was available in all the examined years. Based on actual farm business use, accelerated depreciation lowered the cost of capital for the operations resulting in an estimated increase in investment of 0.27 to 11.6 percent depending on asset class. Originality/value – The data utilized are of a detail not available in previous investigations which used either aggregate data or estimated rather than the observed use of accelerated depreciation. This analysis reveals that accelerated depreciation as used by commercial farms lowers the cost of capital and thus encourages investment particularly in machinery and equipment.

Conclusions

Section 179 and bonus depreciation deductions are forms of accelerated tax depreciation available to US farmers. These policies were created to incentivize farm investments. While the agricultural industry is not the only beneficiary of accelerated depreciation deductions, it has become commonplace for farmers to take advantage of these deductions. With widespread use of these tax tools by farmers, it is important to quantify the use and benefits producers are receiving. In this panel data set of 66 farms spanning 11 years, there were 305 Section 179 depreciation deductions taken with an average of $52,250 and 70 bonus depreciation deductions taken with an average of $100,886. Over the 11-year time period, there were seven Section 179 depreciation tax policy changes and four bonus depreciation policy changes. The present value of the depreciation deduction is the benefit the farmer receives from electing an accelerated depreciation deduction in the form of decreased cost of capital investment for the producer. If the cost of the asset is lowered through accelerated depreciation deductions, the business can more easily generate the required return from that asset, thus increasing the likelihood of investment. This paper calculated the decrease in cost of capital attributed to accelerated depreciation deductions using a range of previous estimates of investment elasticity. The use of accelerated deprecation created an average estimated decrease in the cost of capital of up to 11.6 percent.