Depreciation Profiles and Depreciation Policy in a Spatial Context*

Abstract

This paper demonstrates that the treatment of depreciation in the federal tax code is nonneutral not only with respect to assets and industries, as demonstrated in a number of recent studies, but also with respect to location. Using a unique set of data for manufacturing plants in Los Angeles and Philadelphia, the paper shows that the 1981 Tax Act's reduction of equipment lives to five years is likely to create differences in effective tax rates and wedges between the sample metropolitan areas for groups of plants with the same two-digit industrial classification. These are attributable to spatial differences in corporate tax rates and the type and quality of assets used. The paper concludes by explaining how the results can be generalized to other sectors and metropolitan areas, and by noting some implications for policy.

Constructing a Manufacturing Fixed Capital Stock Series for the Regions of Greece

“…Regional manufacturing total gross asset formation in Greece, 1980(values in billion drachmae constant 1980prices) Regions/year 19801981198219831984198519861988198919911992 (1980)(1981)(1982)(1983)(1984)(1985)(1986)(1987)(1988)(1989)(1990)(1991)(1992)(1993), and ESYE Statistical Yearbook of Greece (1986Greece ( -1996. Table7.…”

“…These can reveal which part of regional growth can be attributed to the expansion of capital and labour inputs and which part is owing to technical change (Moomaw, 1981;Harris, 1982;Hulten & Schwab, 1984;Beeson, 1987;Vagionis & Spence, 1994;Vagionis & Sfakianakis, 1997); (iii) to build investment and consumption functions that can be used not only for testing theories but also for the prediction of the future investment, income or consumption levels (Usher, 1980a;O'Mahony, 1993). (iv) to assess the regionally divergent effects of tax policies (Luger, 1986).…”

Progress Report: Capital, Technology and Industry Dynamics in Regional Development

“…Hence it remained a relatively unstudied entity, especially when compared to labor, and came to be regarded almost mystically as an elusive and shadowy immeasurable or a footloose class of factory owners. However, the last 5 or 6 years have seen the emergence of some first attempts to correct this empirical imbalance, as is evident in the studies of manufacturing investment by Browne, Mieszkowski, andSyron (1980) andGertler (1984a) at the state level and Varaiya and Wiseman (1981) and Luger (1986) a t the level of SMSAs. All of these studies have documented the changing geography of capital accumulation, with all but the first authors (Browne e t al., 1980) inquiring into the nature and pace of technological change revealed by capital shifts in the aggregate.…”

El stock de capital industrial medido a través de la relación inversión-empleo: estimaciones para los estados mexicanos

“…Para construir funciones de inversión y consumo que puedan ser usadas no sólo para probar teorías sino también en la predicción de la inversión futura de los niveles de ingreso o de consumo [Usher, 1980;O'Mahony, 1993]. d. En la valoración de los efectos regionalmente divergentes de la política de impuestos [Luger, 1986].…”