2 ms·
I’ve not read all the comments but I’d note that this issue becomes less serious every year as you build a pipeline of amortization. Assuming 1mm stays the same
by fnordpiglet 4y ago
I’ve not read all the comments but I’d note that this issue becomes less serious every year as you build a pipeline of amortization. Assuming 1mm stays the same YoY in 5 years you’re paying no taxes again. Each year taxable income reduce by a further $200k until year 5. That provides no relief now but even without action it resolves eventually - except for new firms.
- joshgachnang 4y ago> Assuming 1mm stays the same YoY in 5 years That's a pretty big assumption.
- KMag 4y ago... growing firms are also penalized. Also, if a company goes bankrupt (like the majority of companies), those last 4 years of amortization just go into the government's pocket. Even if you could ignore the time value of money, it doesn't actually even out over the long run.
- fnordpiglet 4y agoYes. It also penalizes shrinking firms as you simply lose the benefit of amortization if you can’t use it.
- hgsgm 4y agoPenalizes shrinking revenues, not shrinking firms. Shrinking firms who maintain revenue (layoffs!!) do well by winding down tax liability.
- fnordpiglet 4y agoMy bad you’re right!
- RhodesianHunter 4y agoBut the first year is the hardest...