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I'm guessing he was just trying to explain the overall concept, that or he moonlights at New York or California's tax departments.

But does it reduce it by 3x?

It might not reduce it at all. It might reduce it by 100%. It's impossible to make generalizations about this.

The logic is that the cost of acquisition must be constant.

Unfortunately, that logic is a fantasy.

Well, yeah. :) Suppose I could have replaced "logic" with "assumption."