taxfoundation / capital-cost-recovery Goto Github PK

The PSL appreciates the willingness of the capital-cost-recovery maintainers to join the Library! The capital-cost-recovery model is currently a PSL-incubating model. This issue highlights and provides a status update on progress towards the model obtaining PSL-cataloged status. The criteria for inclusion in the PSL catalog is outlined below, with notes on the status of this model's progress towards satisfying these criteria.

Once all "MUST" items are checked off, a PR will be opened to include a PSL_catalog.json configuration file in this repository.

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  • See README
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  • Mirrored at https://github.com/PSLmodels/capital-cost-recovery
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• The source code SHOULD be written in an open source language.
  • R
• A PSL_catalog.json configuration file to be used for cataloging these criteria MUST be included in the project's repository. Specific instructions for creating this file can be found in the Catalog-Builder Documentation.

cc @elkeasen @danielbunn

Two of the capital-cost-recovery methods described in README.md are not totally clear to me and I am not familiar enough with methods across the OECD to infer what is correct:

1. "SL2 - Straight-Line Method with Changing Rates": Does this represent rates that are known to change ahead of time (e.g., a firm makes an investment knowing they can recover 20% of the cost for the first two years and then 10% of the cost after that time (until the item is full depreciated)) or does this method reflect ex-post rate changes (e.g., a firm made and investment in year t under tax law that allowed one to depreciate the asset under a SL method at 20% per year, but a law change at t+k only allows SL at 10% per year (and investments already in place were not grandfathered)?
2. "InitialDB - Declining-Balance Method with an Initial Allowance": Is this method the same as DB with bonus depreciation?

If I've missed a document that outlines the equations underlying these methods, please point me towards that. I can see equations in the R code, but wanted to understand them conceptually rather than work backwards from the source code.

Thanks!

https://github.com/TaxFoundation/capital-cost-recovery/blob/master/final-data/npv_all_years.csv

Optional: add ISO-2 codes instead.

https://github.com/TaxFoundation/capital-cost-recovery/blob/master/final-outputs/npv_weighted_timeseries.csv