Article:
Calvin H. Johnson, Tax Shelter Gain: The Mismatch of Debt and Supply Side Depreciation, 61 TEXAS L. REV. 1013 (1983).
 

Abstract:
In this Article, Professor Johnson argues that the Accelerated Cost Recovery System (ACRS), enacted in 1981, is inconsistent with the tax treatment of debt. ACRS allows an owner of depreciable property to deduct her basis in the property, so long the indebtedness used to purchase the property is included in the basis. ACRS creates a “negative tax,” in which the profit from an investment is greater after tax than before or in the absence of tax. Professor Johnson argues that even though the tax rates believed to create tax shelters were reduced in 1981, the ACRS system itself creates tax shelters. Professor Johnson concludes that one result of ACRS will be the inability of low- and middle-bracket taxpayers to own depreciable property.