Social Engineering

[Landwalker]

Originally Posted by Steven Marsh

In this case, the situation publishers find themselves facing is a national one, thanks to the IRS and a 1979 Supreme Court ruling (see my links, above).

Ultimately, it depends on how a company interacts with their inventory. Although the author's breakdown of the hypothetical financial statements is self-admittedly simplified, at best, and has some things that make me cringe from a mechanical standpoint, some of the non-accounting concepts mostly hold. The article also at least does a good job of clarifying that the federal decision isn't a tax on inventory. Which is a relief.

The "just-in-time" or "lean production" strategy O'Donnell points out isn't something unique to the publishing industry, of course. It's widely taught and practiced across almost all manufacturing industries (and was really popularized by Toyota). For most industries, it's terrific. Unfortunately, publishing (or rather, writing, since the writer is ultimately the one in a squeeze) isn't one of them.


And as an aside, I know people like to demonize the IRS, but they get a bad rap. The IRS didn't and still doesn't have anything to do with this. Congress writes the tax code. The IRS just carries it out and makes sure people follow Congress's rules (which Thor, and evidently many other companies and industries, weren't). It's like blaming the police department or state patrol if you get a speeding ticket—they don't make the rules; they just enforce them.