On Fri, 8 May 1998, John Foust wrote:
**** snip ****
> Ward Donald Griffiths III <gram_at_cnct.com> wrote:
> >"Inventory" tax means that for as long as you hold the merchandise,
> >you will continue to be taxed every bloody year unless you bite the
> >bullet and throw the stuff away.
>
> In my understanding of accounting, this "tax" doesn't exist. I think
California has, or at least had, a business property tax that was levied
on the value of saleable items on, IIRC, the 31st of March. Convair, then
here in San Diego, would regularly fly out to Arizona anything that was
airworthy to escape that tax.
- don
> the previous writer doesn't understand why the bean counters want to
> get rid of inventory. There are certainly exceptions that rile
> the blood of small- and large-L libertarians, but in my experience
> in US small business, you are only taxed once. A B.C. wants to
> reduce inventory for other reasons - it's money tied up in junk
> that's not selling, not gaining interest, and isn't growing in value.
> When it comes time to dumpster it, it becomes a write-off loss and
> its original cost is probably taken as a deduction of some kind,
> which alone makes it valuable to the bottom line.
>
> So, the original poster's notion is correct - the complications of
> taxation tends to make companies dump old stuff. It's like property
> tax - it forces people to find a way for the land to generate at
> least that much cash, which discourages people from buying land and
> simply preserving it as-is.
>
> - John
> Jefferson Computer Museum <http://www.threedee.com/jcm>
>
>
donm_at_cts.com
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Don Maslin - Keeper of the Dina-SIG CP/M System Disk Archives
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Received on Fri May 08 1998 - 13:31:27 BST