Prospective Changes in Tax Law and the Value of Depreciable Real Estate

The Economic Recovery Tax Act of 1981 significantly reduced the taxation of income-producing properties by accelerating tax depreciation on both new and, especially, existing properties. A partial reversal of the 1981 legislation appears likely. To provide some insight into the possible effects of a decrease in tax depreciation of income-producing properties, two potential tax changes are analyzed: an increase from fifteen to twenty years in the tax service lives of both new and existing properties and an increase for existing properties only. Both residential and commercial/industrial properties are considered.     

Catching hipos: screening, wages, and competing for a job

In this paper, I study the wage a firm sets to attract highability workers (hipos) in situations where people compete fora job. I show that the more people compete, the larger a firm'sincentives to sort high and low ability workers. Moreover, workerswill signal their (high) ability in situations with many competitorsonly if a job offers a high enough wage. The main result, therefore,is that a firm sets higher wages, when more people compete.