4 ms·

Just keep the MBAs with their Midas touch away from basic tech. Engineers are good enough at math to balance the books, it's not really harder than balancing a

Just keep the MBAs with their Midas touch away from basic tech. Engineers are good enough at math to balance the books, it's not really harder than balancing a checkbook. I had better finances as a high school student than most Wall Streeters at the peak of their career. Got alpha they didn't, accounting for real is just mathematical horse sense.

bsder 4y ago
One of the big problems in the US is accounting for inventory. If you're buying "tax-free" from a supplier, that part goes "onto your books" when it goes into your inventory. If you don't put that part into a product and sell it relatively quickly, you owe tax on that part as it sits on your shelf. There are some other issues with inventory taxation like how fast you can depreciate it (ie. for tax purposes, chips are treated like mechnical inputs even though chips depreciate MUCH faster). This all strongly discourages holding inventory. And even engineers running companies will come to that conclusion.
- Kadin 4y ago
  > If you're buying "tax-free" from a supplier, that part goes "onto your books" when it goes into your inventory. If you don't put that part into a product and sell it relatively quickly, you owe tax on that part as it sits on your shelf. I admit to not being a CPA, but that... doesn't make a ton of sense to me. What sort of tax do you pay on inventory? My understanding is that it's not tax that's the issue, but the tying-up of capital in inventory that's generally being minimized. If interest rates are 3% and you have $1M in inventory, that's $30k per year in interest you're paying in order to hold that inventory, plus the physical costs of warehousing it. And the MBAs naturally look at cutting costs as the fastest and most direct route to improving profitability.
  - bsder 4y ago
    > I admit to not being a CPA, but that... doesn't make a ton of sense to me. What sort of tax do you pay on inventory? Welcome to the US taxation system. As I understand it, VAT solves a lot of this silliness. However, the US doesn't do VAT for a bunch of historical reasons.
  - gnopgnip 4y ago
    Cost of goods are deductible against sales. But unsold inventory is not. So effectively it is taxed as business profit.
    - daniel-cussen 4y ago
      Can't you sell it next year? And you know what? At some point somebody has to lose money to the tax collector. You can't deduct everything, can't shunt it all onto the customer (typically a leaf-node employee, someone at the bottom of an org chart). The business has to be profitable by enough that it can eat some taxation. Or what, you expect the orphan to do it instead? Has to push through friction for others. And plus, cost of goods of unsold inventory isn't that painful if you actually are making huge margins on it, like you ideally should, because you built a better mousetrap that was that much better that you could protect it from copycats with patents and therefore let everyone benefit enormously from it. In the end, the businessman must be creative. Must be an inventor, basically. Or a leader. And so in order to overcome that friction for the sake of the orphanage, the businessman must resolve friction in nature, some inefficiency of some sort, something that could be much better than it is. Something ineffective that could be effective. Plant a seed and reap two.
      - MichaelZuo 4y ago
        You are free to send extra money to the government if you truly believe in it.
        daniel-cussen 4y ago
        I actually went ahead and did already! And I'm going to do it again!
- daniel-cussen 4y ago
  Suck up those taxes! Suck them up! Just pay them! Subordinate yourself to the authority of the State that governs the place you do business, it's the least you can do. Don't cheat the orphanage! Push through the friction! The State of California gave me a huge break that I would have never gotten on my own. I did the math and the taxes I pay turn into that help at a 1/1000000 (one millionth) efficiency rate. That's awesome, that may be a high hurdle for everyone else but for me it's a great deal, because I can get speedups as great or greater, with just that help they gave me. So in fact a 1000000000x (one billion times) speedup was possible directly due to this break they gave me, so the ROI is already 1000x (a thousand times). And once they unlock that, hey that's just the beginning, sky's the limit! That 1Bx speedup (1 billion times) is actually an undersell, I could have kept going and gotten a 1000000000000x speedup (trillion times) and kept going and going beyond that, literally ad nauseam (numbers that would sicken you by looking at them, literally that). It's just a trillion-x speedup is too big, people get dizzy, there's no metaphors, people distrust the problem you're solving if you get that speedup, it's better to say a billion. There's metaphors for that (difference between wheelbarrow of dirt and a mountain, two seconds and the human lifetime, jumping a foot off the ground and going to the Moon). It's the biggest number that really fits in people's heads. But they're both still big speedups that vastly overcome the meaningless 1000000x hurdle that taxation and redistribution impose. Advice: value the taxes you pay at more than 0%. Fine, not 100% or more, but not 0% or less. Say 20%, to start with. Start by reducing what you deduct from your taxes, limit that to the things the State really doesn't want you paying taxes for. But on business lunches! Dude cough it up completely! And in the process get rid of the tax lawyers and accountants who tell you to do contortions for tax reasons. Then you'll see your business with clarity.
  - bsder 4y ago
    This issue isn't "paying taxes"--it's the fact that inventory laws in the US are stupidly obtuse. Computer chips are not nuts and bolts. I believe that VAT solves a lot of these issues (while trading off for others).
  - ravel-bar-foo 4y ago
    If you get 1 trillion x anything taxes won't be a factor in your ability to get money. At that multiplier my pocket change becomes the entire world economy.

bsder 4y ago

One of the big problems in the US is accounting for inventory. If you're buying "tax-free" from a supplier, that part goes "onto your books" when it goes into your inventory. If you don't put that part into a product and sell it relatively quickly, you owe tax on that part as it sits on your shelf. There are some other issues with inventory taxation like how fast you can depreciate it (ie. for tax purposes, chips are treated like mechnical inputs even though chips depreciate MUCH faster). This all strongly discourages holding inventory. And even engineers running companies will come to that conclusion.

Kadin 4y ago
> If you're buying "tax-free" from a supplier, that part goes "onto your books" when it goes into your inventory. If you don't put that part into a product and sell it relatively quickly, you owe tax on that part as it sits on your shelf. I admit to not being a CPA, but that... doesn't make a ton of sense to me. What sort of tax do you pay on inventory? My understanding is that it's not tax that's the issue, but the tying-up of capital in inventory that's generally being minimized. If interest rates are 3% and you have $1M in inventory, that's $30k per year in interest you're paying in order to hold that inventory, plus the physical costs of warehousing it. And the MBAs naturally look at cutting costs as the fastest and most direct route to improving profitability.
- bsder 4y ago
  > I admit to not being a CPA, but that... doesn't make a ton of sense to me. What sort of tax do you pay on inventory? Welcome to the US taxation system. As I understand it, VAT solves a lot of this silliness. However, the US doesn't do VAT for a bunch of historical reasons.
- gnopgnip 4y ago
  Cost of goods are deductible against sales. But unsold inventory is not. So effectively it is taxed as business profit.
  - daniel-cussen 4y ago
    Can't you sell it next year? And you know what? At some point somebody has to lose money to the tax collector. You can't deduct everything, can't shunt it all onto the customer (typically a leaf-node employee, someone at the bottom of an org chart). The business has to be profitable by enough that it can eat some taxation. Or what, you expect the orphan to do it instead? Has to push through friction for others. And plus, cost of goods of unsold inventory isn't that painful if you actually are making huge margins on it, like you ideally should, because you built a better mousetrap that was that much better that you could protect it from copycats with patents and therefore let everyone benefit enormously from it. In the end, the businessman must be creative. Must be an inventor, basically. Or a leader. And so in order to overcome that friction for the sake of the orphanage, the businessman must resolve friction in nature, some inefficiency of some sort, something that could be much better than it is. Something ineffective that could be effective. Plant a seed and reap two.
    - MichaelZuo 4y ago
      You are free to send extra money to the government if you truly believe in it.
      - daniel-cussen 4y ago
        I actually went ahead and did already! And I'm going to do it again!
daniel-cussen 4y ago
Suck up those taxes! Suck them up! Just pay them! Subordinate yourself to the authority of the State that governs the place you do business, it's the least you can do. Don't cheat the orphanage! Push through the friction! The State of California gave me a huge break that I would have never gotten on my own. I did the math and the taxes I pay turn into that help at a 1/1000000 (one millionth) efficiency rate. That's awesome, that may be a high hurdle for everyone else but for me it's a great deal, because I can get speedups as great or greater, with just that help they gave me. So in fact a 1000000000x (one billion times) speedup was possible directly due to this break they gave me, so the ROI is already 1000x (a thousand times). And once they unlock that, hey that's just the beginning, sky's the limit! That 1Bx speedup (1 billion times) is actually an undersell, I could have kept going and gotten a 1000000000000x speedup (trillion times) and kept going and going beyond that, literally ad nauseam (numbers that would sicken you by looking at them, literally that). It's just a trillion-x speedup is too big, people get dizzy, there's no metaphors, people distrust the problem you're solving if you get that speedup, it's better to say a billion. There's metaphors for that (difference between wheelbarrow of dirt and a mountain, two seconds and the human lifetime, jumping a foot off the ground and going to the Moon). It's the biggest number that really fits in people's heads. But they're both still big speedups that vastly overcome the meaningless 1000000x hurdle that taxation and redistribution impose. Advice: value the taxes you pay at more than 0%. Fine, not 100% or more, but not 0% or less. Say 20%, to start with. Start by reducing what you deduct from your taxes, limit that to the things the State really doesn't want you paying taxes for. But on business lunches! Dude cough it up completely! And in the process get rid of the tax lawyers and accountants who tell you to do contortions for tax reasons. Then you'll see your business with clarity.
- bsder 4y ago
  This issue isn't "paying taxes"--it's the fact that inventory laws in the US are stupidly obtuse. Computer chips are not nuts and bolts. I believe that VAT solves a lot of these issues (while trading off for others).
- ravel-bar-foo 4y ago
  If you get 1 trillion x anything taxes won't be a factor in your ability to get money. At that multiplier my pocket change becomes the entire world economy.