Thanks for the enlightenment; perhaps those tax laws need to be rethought and reworked?
Oh yeah... That would be about the biggest boon to business that there is...
It is a tough nut though... The problem is, a business can predict tax rate. In order to avoid the taxes, in the past the business would invest into inventory, because at the time, you were not taxed for stock on hand (or at least lightly taxed), which means less money doled out to the old non-working partner, Uncle Sam... And the taxes could be evened out across quarters as the inventory sold.
Now, in order to stop that practice, inventory is taxed hard. So it only makes sense to business not to carry the inventory anymore. Thus JIT.
In my mind, I should be able to write off inventory as materials invested toward a sale. I have hard money tied up in that product. Why should I be taxed on it? It should be a write-off. Let Uncle take his unfair share after the sale when the profit is in hand.