Jr. Many of us know that publishing has changed considerably over the last 15 years. More titles see print every year, but the average title sells fewer copies, and goes out of print more quickly, than its late '70s counterpart. Advances and royalties have dropped in inflation-adjusted terms.
More books become insulation and other recycled-paper products earlier than ever before.
Many of us also know that one of the causes of this change was the Supreme Court's 1979 ruling in Thor Power Tool Company v. Commissioner of Internal Revenue . Still, over the last 14 years I've encountered a number of statements that demonstrate a profound failure to understand either the ruling itself, or its implications for the publishing industry. This is not true. An inventory tax, like a property tax, imposes a certain number of cents in annual tax for every dollar of inventory, regardless of corporate profit or loss. The Thor Power ruling does involve inventories as they relate to corporate income taxes, but it does not tax inventories.