> (3) is valued at the exact cost of all inputs to it, including salaries (uh oh).
Thanks, that really gets at the heart of the issue.
Are any other business processes and elements — e.g. accounting mechanisms, print design, sales funnels — valued this way?
Imagine if secretaries' salaries were applied to the "capital asset" of the well-organized file cabinets they create. Or if janitors' salaries were applied to the "capital asset" of a clean workspace. This whole quagmire is far more insane than anyone is giving it credit for.
Straight no. That’s why they had to put in line 3, “clarifying” the intent, because it’s not done anywhere else.
There could be a distinction between creating new value (greenfield), and maintaining existing value (brownfield). Most of my work is green field and I do consider it to be a capital asset, it's sweat equity as I don't pay myself, but I can't deduct my non-salary either. Others estimate the most of the software work is 95% brownfield.
An other issue is competitiveness with other jurisdictions that don't have these tax laws, but even if that were normalized there are jurisdictions that are far lower tax in general regardless of the classification.