The effect of taxes upon Investment patterns in agriculture is an important policy consideration which has received attention in past issues of this journal. However, some authors have inadequately adjusted income stream valuation formulas for the effect of the individual income tax and have consequently reached incorrect conclusions regarding both the present value of future income and the effect of income tax progressivity on the relative valuations of individuals in different tax brackets. Rodewald (1969, 1971) and Devino considered the effect of taxes and financing upon investment decisions, but their incomplete treatment of income taxes produces a valuation formula which will result in incorrect investment decisions*
This paper was published in American Journal of Agricultural Economics (1977) Vol. 59, No. 3, pp. 538-542
Adams, Roy D., "The Effect Of Income Tax Progressivity On Valuations Of Income Streams By Individuals" (1976). Economic Staff Paper Series. 138.