Economic Recovery Tax Act

The Economic Recovery Tax Act of 1981 allowed pharmaceutical companies to depreciate all expenditures for R D facilities and equipment over a 3-year period. The Tax... 

A comprehensive, scholarly review of what is known about the quantitative Impact of particular tax measures upon the rate of innovation and R D investments. Includes a detailed examination of the provisions of the Economic Recovery Tax Act of 1981 relating to R D investments. 

Tax-law changes put into effect with the 1981 Economic Recovery Act and modified in 1986 have instituted a new system of depreciation known as the Accelerated Cost Recovery System (ACRS). The latter has replaced the former ADR system for most tangible depreciable property used in a trade or business placed in service on or after January 1, 1981. In the ACRS [or Modified Accelerated Cost Recovery System (MACRS) which went into effect for property put into service on or after January 1, 19871, the recovery of capital costs as depreciation was determined over statutory periods of time using statutory percentages depending on the class life of the property and the number of years since the property was placed in service. The statutory periods of time were generally shorter than the useful life of the asset or the period for which it was used to produce income. 

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