[lbo-talk] An Orgy of Speculation?

Jordan Hayes jmhayes at j-o-r-d-a-n.com
Sat Mar 5 21:11:15 PST 2011


Shane Mage writes:


> The "market value of the structures and equipment" is not
> their "replacement cost" but their *depreciated* replacement
> cost (original cost times inflation rate since purchase divided by
> depreciation rate) ...

I think you're confusing economics with tax policy. Depreciation is merely a way of smothing out the tax consequence of capital investment. Depreciation is zero-sum, and (tax) revenue-neutral.

/jordan



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