Investment, Equipment Prices, and Income Tax

Abstract

High income-tax rates and an increasing price level, prominent among the economic developments of the last 20 years, have long been strongly criticized in business circles. They are considered major deterrents to investment, acting as brakes on the growth of the economy. Demands for lower tax rates, and for a halt to price escalation (usually called inflation), are constant topics in the business press, in public addresses by high company officials, ¹ in presentations for the justification of price or rate increases before regulatory commissions, and in institutional advertising designed for the general public.