From bhandari at phoenix.Princeton.EDU Sat Aug 28 14:55:41 1999
Jordan, is the decision to expense--rather than
capitalize--software tax related?
I would imagine. I think in general the distinction between current expenses and amortizable ones is largely seen in corporate america as being an artificial one, and one that only leads to higher taxation. So yes, I believe that a not insignificant portion of the GDP is spent on trying to outsmart the taxman and this is a good example. If you can expense something, it's better to.
Is it possible that profits would not be robust at
all--certaintly they would not justify the bull market--if
not for creative tax avoidance?
I think that's a stretch. My feeling is that creative tax avoidance means that accountants and lawyers get paid instead of the government and the tax system has to be much more complex (it's spy vs. spy all over again) in order to counter. If people paid the taxes they owed, we'd be a whole lot better off.
And the DJIA would easily go to 36,000 :-)
/jordan