[recursivedoubts]

wow big companies with access to cheap financing aren't bothered by it but it destroys smaller companies that operate on a cash-flow basis, crazy who would have suspected that such a tax regime would be supported by big companies

[kevstev]

Can you lay out your understanding of how this works?- I get the feeling you don't even understand the basics. You are only taxed on profits so why would financing even be brought into the conversation?

[recursivedoubts]

yeah, sure: money spent on dev salaries that are dedicated towards "research" aren't fully deductible in the year they are paid, instead you have to depreciate the cost over a number of years. that means your "profits" are higher in the first year because you can only claim a small percentage of the money you actually spent in cash terms. fine for a large company that has access to to financing and/or a large warchest to absorb the hit: in the long run it pencils out, but for smaller/newer companies that are run on a cash basis its brutal and very easy to get into a situation where taxes exceed profit.

i think everything should be done on a cash basis in general, so what do I know