Response to Lily Kahng, The Taxation of Intellectual Capital
Professor Lily Kahng’s article, The Taxation of Intellectual Capital, highlights the distortion contained in the current tax rules governing capitalization. Her article emphasizes that U.S tax law systematically fails to require capitalization for self-created, high-value intangible assets. Professor Kahng’s contribution is to situate the problem in a broader, interdisciplinary context and to use the knowledge gained from that context to suggest specific reforms. In the process, Professor Kahng explores the definitional boundaries of “intellectual capital” and considers potential objections to capitalization of the costs of intellectual capital. As a result, Professor Kahng’s article fosters a richer, contextualized conversation about a significant shortcoming of the tax system.