I started out trying to answer your question and quit as the longer I went the more I got into the tax and accounting implications surrounding your question.  I don't think that is what you were looking for.  If it is let me know.  Will try to break it down in a different way.

1)  Would your income increase if you didn't buy new equipment?   If you bought no equipment, either new or used,  and had no repair costs you would maximize net income.   Of course, this is impossible to do.  The decision to buy new or used depends on the importance of reliability and your own mechanical abilities as it relates to equipment.  Assuming all things related to the piece fo equipment are held constant, you would increase your net income purchasing a piece of used equipment for less money than new equipment with the same specifications and capability.  

2)  Spreading the cost over the useful life.  Today, many of us use Sec 179 to expense equipment in the year of purchase.  From an accounting perspective this distorts our net farm income.  To get a better picture of our actual cost of production we need to depreciate all equipment over the actual useful life we expect it to have taking into account the residual value when we either trade it in or sell it.  Also, any repairs we make to the equipment during its useful life will go directly to the expense section of our tax returns and income statement.  When looking at your cost of production you figure in equipment costs.  How you factor this in has a significant impact on the figure you come up with.  Same for a obtaining a realistic picture of your net income for any given year.  

3)  Use of available cash.  Long ago I learned that there was only so much cash to go around at the end of the year.  Sometimes there was none.  This means that each year when I made money on the farm  I only have so much money I can comfortably invest back into the farm.  I can either use this money to buy new equipment, used equipment or make a down payment on land.  The decision I made years ago was to keep equipment expenditures as low as possible and buy land.  This gets back to having a plan for your operation and following it. 

4)  How does buying land affect farm income?  That can be better answered from a long term perspective.  Some of the first land I purchased many years cost $200-$400 per acre.  This past year my net profit on some of this land was more than I paid for it.  Guess I am lucky because I sure am not smart.  We must have equipment to crop the land.  We must have land to utilize the equipment.  It is just a matter of how you want to balance it out.  Personally, it worked better for me to invest in land years ago than in equipment. 

5)  Depends on your financial position.  If you own or lease a lot of land and have little or no debt your situation is much different from someone who has a lot of debt.  The decision to purchase new or used equipment is going to be different for each of us.  The key is to know the implications of the purchase as it relates to your operation.  If you are not familiar with the accounting and tax implications of your decisions talk to someone who is.  Hire a professional to help you out.  Better yet, educate yourself regarding accounting and taxes.  You will be well paid for your time spent doing this.  

From my personal perspective and operating plan, purchasing used equipment has increased the bottom line of my farming operation.  Remember, that is just me.  Others are going to tell you the opposite and they are correct as it relates to them.  It is just a matter of your own individual farming operation.  There is no right or wrong answer.