[HN Gopher] OBBB signed: Reinstates immediate expensing for U.S....
___________________________________________________________________
OBBB signed: Reinstates immediate expensing for U.S.-based R&D
Author : tareqak
Score : 395 points
Date : 2025-07-05 00:24 UTC (22 hours ago)
(HTM) web link (www.kbkg.com)
(TXT) w3m dump (www.kbkg.com)
| tareqak wrote:
| > Foreign R&D must still be amortized over 15 years
| macinjosh wrote:
| Awesome, this literally could not be better for American tech
| workers.
| Den_VR wrote:
| So payroll for R&D is now entirely tax deductible? Businesses
| get to choose to pay taxes or do R&D for themselves?
| lazide wrote:
| Either scenario taxes are paid - it's just how and over
| what time period.
| tomrod wrote:
| In the long run, we are all dead. 20% depreciation per
| year for any software developed is a burden for all but
| the largest of companies.
| bobmcnamara wrote:
| This matched capex software.
|
| Weird how the depreciation schedule changes based on how
| the software was acquired.
| n_u wrote:
| It's more about whether or not the company has taxable
| profits for that year (importantly these are not the same
| as real profits). I would read this article to understand
| more about how being forced to amortize tax deductions for
| expenses affects a business's taxes.
|
| https://news.ycombinator.com/item?id=44180533
|
| more info here too
|
| https://news.ycombinator.com/item?id=44226145
| alphazard wrote:
| Tax deductible is a weird way of phrasing it. It's not like
| these software companies were counting their money at the
| end of the quarter, and then deciding to do R&D instead of
| paying taxes. They had already paid R&D expenses to build
| the product, which gained them revenue. Previously they
| weren't allowed to actualize the cost of R&D all at once,
| so the business could be losing money, and still have to
| pay taxes on top of the loss (which is nuts).
|
| This fixes the problem, so now if you spend $100 on
| software developers, and you make $100 from the software,
| then you have $0 income, instead of $80 income.
| tomrod wrote:
| It was also weird because people pay money on income
| (dividend, partner payment, SCorp share, etc.) anyway, so
| in a long term view this incentivized companies to keep
| fewer software engineers on staff.
| beebmam wrote:
| There's also H-1B (and other worker visa) restrictions/costs
| imposed. Overall, quite good for the American tech worker
| Izikiel43 wrote:
| Source?
| beebmam wrote:
| Extra $250 fee for visa applications:
| https://judiciary.house.gov/media/press-releases/big-
| beautif...
|
| 3.5% remittance fees on sending money out of the US:
| https://www.globalimmigrationblog.com/2025/06/what-are-
| the-i...
|
| Also (in above source), no ACA subsidies for H-1B visa
| holders (and others), which likely means employers they
| will have to pay more for health care if they want to
| cover their immigrant workers
| tareqak wrote:
| Quoting all the fees in
| https://judiciary.house.gov/media/press-releases/big-
| beautif...
|
| > Expansion of Immigration Fees:
|
| > $1,000 asylum application fee -- first in U.S. history
|
| > $1,000 fee for individuals paroled into the U.S.
|
| > $3,500 fee for sponsors of unaccompanied children
|
| > $5,000 fee for sponsors of unaccompanied children who
| fail to appear in court
|
| > $550 fee for work permits
|
| > $500 application fee for Temporary Protected Status
| (TPS)
|
| > $400 fee to file a diversity immigrant visa application
|
| > $250 fee to register for the Diversity Visa Lottery
|
| > $250 visa integrity fee
|
| > $100 year fee while asylum applications remain pending
|
| > $100 fee for continuances granted in immigration court
|
| > $5,000 fee for individuals ordered removed in absentia
|
| > $1,500 fee to adjust status to lawful permanent
| resident (green card)
|
| > $1,050 fee for inadmissibility waivers
|
| > $900 fee to appeal a decision by an immigration judge
|
| > $900 fee to appeal a decision by DHS
|
| > $1,325 fee to appeal in practitioner disciplinary cases
|
| > $900 fee to file motions to reopen or reconsider
|
| > $600 application fee for suspension of deportation
|
| > $600 application fee for cancellation of removal
| (permanent residents)
|
| > $1,500 application fee for cancellation of removal
| (non-permanent residents)
|
| > $30 fee for Form I-94 (arrival/departure record), up
| from $6
| apical_dendrite wrote:
| The $100/year fee while an asylum case is pending means
| that the government is charging someone for the
| government's own inability to process cases quickly.
| Brybry wrote:
| The House's[1] SEC. 112104. EXCISE TAX ON REMITTANCE
| TRANSFERS. 3.5% tax became 1% in the Senate's[2] SEC.
| 70604. EXCISE TAX ON CERTAIN REMITTANCE TRANSFERS and a
| lot of the language changed.
|
| The Senate made a lot of changes (Byrd rule also nuked a
| lot of stuff) so old articles are of limited use to the
| final bill.
|
| I don't even know if [2] is the actual final text as
| there is neither an enrolled or public law version on
| congress.gov yet.
|
| It's super annoying how often we can't read the final
| text of a bill before Congress votes on it.
|
| [1] https://www.congress.gov/bill/119th-congress/house-
| bill/1/te...
|
| [2] https://www.congress.gov/bill/119th-congress/house-
| bill/1/te...
| unmole wrote:
| > 3.5% remittance fees on sending money out of the US:
|
| The version of the bill that passed a 1% excise is
| applicable " _only to any remittance transfer for which
| the sender provides cash, a money order, a cashier's
| check, or any other similar physical instrument_ ".
| zhivota wrote:
| Ok thank you I was really worried for a second. Capital
| controls are on the bingo card but I was hoping it
| wouldn't come yet.
| ndiddy wrote:
| For comparison, India taxes remittances at 20%.
| kondu wrote:
| This is not true. There's a TCS of 20%, which is an
| advance tax payment that you can claim back in your
| income tax returns at the end of the year, and it not an
| additional tax. This is just a (bad) mechanism to stop
| black money from leaving the country.
| throwaway7783 wrote:
| I don't see anything supporting this in the text of OBBB,
| nor in the definition of domestic research expense
| (https://www.irs.gov/pub/irs-
| regs/research_credit_basic_sec41...). Where did you see
| this?
|
| Edit: Oh you mean costs in general, not in the context of
| section 147
| lesuorac wrote:
| Meh.
|
| If you hire H-1B you should be required to pay a fee
| greater than it costs to educate an equivalent American.
| Otherwise you're always in the situation where you have to
| hire foreigners because no Americans are trained. (or in
| reality you hire foreigners because they're cheaper for the
| same role which this no longer makes it the case)
| calvinmorrison wrote:
| NJ, home of the H1B scam. I worked with these guys at
| some large corporations on contract and as an employeed
| (F500 companies). I felt bad for them. Modern serfs. They
| lived in housing owned by you know the names of these
| indian firms that do 'anything'. Companies love the low
| cost, unlimited hours, and no need to hire, they're
| contractors. they sign deals with big indian vendors to
| provide everythingunderthesun.
|
| Poor dudes are like ' this is my chance to make it in
| America' and the high caste indian management treats them
| like dirt.
|
| The 'old boomers yelling at young people' is a myth in
| professional America compared to the absolute screaming
| insults you'd hear hurled at these guys.
|
| And if they messed up? boom, gone, next guy flown in.
| supportengineer wrote:
| Sounds like a CRIME to me.
| lukeschlather wrote:
| IDK, sounds like it's a bunch of stupid misc. fees. So
| instead of just raising the minimum wage for H1Bs and
| indexing it to inflation, they raise taxes (and these taxes
| on H1Bs don't seem like a consequential funding source.
| They might even bring in less tax revenue than raising the
| H1B minimum wage to where it should be if it had originally
| been indexed to inflation.)
| seany wrote:
| Huh? Eliminating h1bs tracks better with what's going on.
| autobodie wrote:
| > _raising the minimum wage for H1Bs and indexing it to
| inflation_
|
| Huh? Not even regular minimum wage is indexed to
| inflation. What are you talking about?
| lukeschlather wrote:
| In Washington state it is. But I'm talking about the
| minimum salary to get an H1B visa which is $60,000. Given
| that H1Bs are intended to substitute for skilled
| professionals where the prevailing wage is easily twice
| that these days, raising it and indexing it to inflation
| seems like common sense.
| earth2mars wrote:
| Yes, but why the domestic r&d must be amortized only within 5
| years? One way it is harder for finance to deduct all the
| expense within 1 year or they have to amortize only within 5
| years. In case of foreign r&d expenses though they cannot
| detect in the year they incur but they have 15 years
| amortize. So I don't get the benefit of. In fact if they
| haven't touched this it could have been much better. In tcja
| they made it worse. And they fix it partially by making it
| deductible within the year they incur for domestic r&d. But
| the amortization still kills it.
| loeg wrote:
| You might look at the rest of the bill.
| me551ah wrote:
| Sure, foreign R&D still gets amortized over 15 years (NPV [?]59
| % of a full write-off, so you "lose" ~8.6 % of your R&D spend
| in present-value terms, and only 6.7 % of the cost is
| deductible in year 1, creating a 19.6 % cash-tax gap).
|
| But offshore wages are often 50-70 % below U.S. rates:
|
| * Even after the slower amortization drag, hiring at half the
| cost nets you ~30 % total savings on R&D headcount.
|
| * On a pure cash basis you only need ~20 % lower wages to break
| even; most offshore markets easily exceed that.
|
| * So the labor-cost arbitrage far outweighs the tax timing
| penalty unless your foreign salaries are less than ~20 % below
| U.S. levels.
|
| In short: the 15-year amort rule hurts your tax deduction, but
| 50 %+ lower offshore wages more than make up for it.
| eric-burel wrote:
| What qualifies as forein here? Employee located abroad, or
| hiring subcontractors from other countries?
| __turbobrew__ wrote:
| How does that actually work? Most large companies open foreign
| subsidiaries owned by the parent, for example "Microsoft" will
| own "Microsoft Canada" and employees working in Canada work for
| "Microsoft Canada" and NOT the main "Microsoft" company.
|
| The R&D done by Canadians is booked against Microsoft Canada,
| so in my mind the Canadian laws around R&D would apply and not
| the USA laws of 15 years old amortization?
|
| Am I missing something?
| rufus_foreman wrote:
| Actual title is "House Passes Tax Bill Sending to President for
| Signature - Details Inside".
| 9283409232 wrote:
| I think editorializing the title is fine in this case. The
| original headline is not descriptive and buries the part that
| would be relevant to HN.
| tareqak wrote:
| I came across the article on Techmeme, and they used the
| following title: "President Trump signs the One Big Beautiful
| Bill, which allows immediate deduction of US software labor;
| foreign R&D still must be amortized over 15 years".
| n_u wrote:
| It also classifies software development as R&D which together
| with immediate expensing for R&D undoes the Section 174 changes
| as far as I understand.
|
| "For purposes of this section, any amount paid or incurred in
| connection with the development of any software shall be treated
| as a research or experimental expenditure"
|
| Page 303 of bill here
| https://www.congress.gov/119/bills/hr1/BILLS-119hr1eas.pdf
|
| Original article about Section 174 tax code causing layoffs
|
| https://news.ycombinator.com/item?id=44180533
|
| Post from @dang with more info about Section 174
|
| https://news.ycombinator.com/item?id=44226145
| mjoin wrote:
| That's nuts
| tareqak wrote:
| Page 301
|
| > there shall allowed as a deduction any domestic research and
| experimental expenditures which are paid or incurred by the
| taxpayer in the current taxable year
|
| AFAIK, there was no domestic vs. foreign R&D distinction in
| section 174 before.
| Thorrez wrote:
| There was a domestic vs foreign distinction in the TCJA,
| passed in 2017, which took effect in 2022:
|
| > 174 to require taxpayers to amortize specified R&E
| expenditures ratably over a five-year period for domestic
| expenditures and a 15-year period for specified R&E
| expenditures attributed to foreign research
|
| https://www.journalofaccountancy.com/issues/2022/nov/amortiz.
| ..
| Thorrez wrote:
| >It also classifies software development as R&D
|
| The TCJA (passed in 2017) already did that (effective 2022). So
| it sounds like this new bill is keeping that, but changing the
| deduction rules back to what they were before 2022.
|
| See this previous discussion of the TCJA:
|
| > all "software development" is now an R&E expense.
|
| https://news.ycombinator.com/item?id=34627712
|
| (AIUI, "R&D" (research and development) and "R&E" (research and
| experimentation) are synonyms.)
| tomrod wrote:
| If correct, this is a good thing on a generally bad, overstuffed
| bill. Immediate expensing never should have been changed in the
| first place, and it was always weird seeing people twist
| themselves in knots defending it.
| xp84 wrote:
| It's an overstuffed bill because nobody will compromise on
| anything so the only way to pass a bill that has anything even
| remotely controversial to either party is one reconciliation
| bill a year.
| dragonwriter wrote:
| > It's an overstuffed bill because nobody will compromise on
| anything so the only way to pass a bill that has anything
| even remotely controversial to either party is one
| reconciliation bill a year.
|
| No, and lots of controversial bills have passed other than as
| reconciliation bills, and especially so during trifectas
| where they "controversial" within the minority party but
| broadly supported by the majority; reconciliation is
| necessary to pass something that strains unity in the
| majority party and is _uniformly opposed by_ (not
| "controversial to") the minority party, perhaps.
| cheriot wrote:
| In the last 10 years, have there been more than a handful
| of bills that got 60 votes in the senate?
|
| I wouldn't like what the current congress would do without
| the filibuster, but at this point a paralyzed system might
| be worse.
| apsec112 wrote:
| "Despite Democrats holding thin majorities in both
| chambers during a period of intense political
| polarization, the 117th Congress (2021-2023) oversaw the
| passage of numerous significant bills, including the
| Inflation Reduction Act, American Rescue Plan Act,
| Infrastructure Investment and Jobs Act, Postal Service
| Reform Act, Bipartisan Safer Communities Act, CHIPS and
| Science Act, Honoring Our PACT Act, Electoral Count
| Reform and Presidential Transition Improvement Act, and
| Respect for Marriage Act."
|
| All of these except the first two were bipartisan and got
| 60 Senate votes (or more)
| thomquaid wrote:
| https://www.senate.gov/reference/resources/pdf/yearlycomp
| ari...
|
| It does seem like things are trending toward less public
| laws passing over the last decade, as well as record low
| time in session and other congressional activity.
| 9283409232 wrote:
| The answer is to vote out politicians. Getting ranked
| choice voting on your states ballot would go a long way
| to fixing this. They would not have Mamdani on the ballot
| for NY mayor if it wasn't for ranked choice voting.
| Certain politicans know this and have made RCV illegal in
| their state. Get RCV on the ballot for your state.
| mindslight wrote:
| RCV / Ranked Pairs of course. The IRV decision process is
| still a relic of the two party system, with the
| possibility for some pretty terrible strategic-voting
| dynamics as votes diverge from just two major parties.
| boroboro4 wrote:
| Not important but Mamdani would've won without ranked
| choice voting too, it didn't play a role in the end.
| tialaramex wrote:
| We can't know. Ranked choice changes how people vote.
|
| In particular it gives people permission to vote for a
| candidate they like but don't expect to be able to win.
| AnthonyMouse wrote:
| Score voting (or STAR) is better.
| 9283409232 wrote:
| Anything is better than what we have and ranked choice
| voting is the most popular alternative.
| AnthonyMouse wrote:
| If you're doing a new thing anyway then it makes no sense
| to do something worse instead of something better.
| Popularity is determined by people; make the better thing
| the popular one.
| 9283409232 wrote:
| It absolutely makes sense. You need buy in from the
| public. RCV is the most known alternative and it has
| taken a decade to get it that far. If you want to start
| the work of informing people about STAR voting then be my
| guess but RCV is a tremendous improvement from what we
| have and an acceptable alternative.
| AnthonyMouse wrote:
| Most people don't actually know anything about any of
| this. If they've heard of RCV at all their understanding
| of it is at the level of "it's something different than
| the status quo and supposedly better". You could swap in
| STAR and they mostly wouldn't even notice that you've
| changed anything. But you'd notice the difference in the
| election outcomes, in a good way.
| 9283409232 wrote:
| Enough people know about it that it has been put on
| ballots in several states and has had strong pushes in
| other states while STAR hasn't at all. If you want to get
| outside and start informing people about STAR then please
| do but RCV has a decade long head start and is the path
| of least resistance.
| nerdsniper wrote:
| Personally I think "approval voting" is almost as good as
| RCV but orders of magnitude easier to sell to the public.
|
| There's just a checkbox next to each candidate and you
| check the box next to any candidate you're "okay" with.
| Results in the most "okay-est" candidates getting elected
| so when the winner is announced everyone goes "...okay."
|
| Also could make primaries less important, because
| multiple candidates from a party could theoretically run
| for the general election without splitting votes.
|
| Communication is easier because in RCV the candidate who
| gets the most #1 votes doesn't necessarily win which
| could lead to a loss of confidence in the system. Its
| very easy to tell the American public "this guy got the
| most checkmarks" and no one gets confused.
| 9283409232 wrote:
| If I recall the problem with approval voting is that it
| is much easier to tamper with than RCV. Filling in an
| empty bubble is a lot easier than changing the order of
| ranking on a ballot
| nerdsniper wrote:
| That's a good point. Seems like that could be a problem
| for current ballots too - add a second checkmark to
| invalidate ballots voting for the "other" guy. Doesn't
| seem to be a widespread issue, but detecting it for
| current ballots would be more obvious.
|
| Maybe that breaks this idea. Maybe ideally you'd maybe
| want a touchscreen+printer to fill in the bubbles with
| printer ink and show it to the voter for them to double-
| check before putting in the stack (or, if wrong bubble
| filled, put it in rejected stack).
|
| Would love more feedback from people to get a better
| sense of all pros and cons.
| FireBeyond wrote:
| > Certain politicans know this and have made RCV illegal
| in their state.
|
| That would be Republicans.
|
| While Democrats have pushed across multiple states for
| changing voting mechanisms, Republicans in eleven states
| have pre-emptively banned any and all use of RCV at any
| level within the state.
| a_wild_dandan wrote:
| What does that matter? We're talking trifectas here, not
| supermajorities. The filibuster is a cute remnant of
| "decorum." It's a vestigial rule which will disappear
| when too inconvenient. (Fun question with not-so-fun
| answers: why isn't the filibuster gone already?)
| ethbr1 wrote:
| > _(Fun question with not-so-fun answers: why isn 't the
| filibuster gone already?)_
|
| Because both parties are scared eventually the other
| party will be back in the majority.
| actionfromafar wrote:
| So it seems like a good canary? If it's removed, the
| ruling party is no longer afraid it will be ever removed
| from power.
| Spivak wrote:
| Because I don't think it's vestigial, I think it's
| serving an important function of governance that never
| made it into the official rules but is nonetheless
| necessary as a stabilizing effect. It doesn't have to be
| the filibuster but something ought to provide the effect.
| It should be easier to block legislation than to pass it.
| It wouldn't be a good thing if you could have huge policy
| swings when a 51-49 becomes 49-51. Being able to, with
| effort, demand specific pieces of legislation reach a
| higher bar biases us toward the status quo.
| margalabargala wrote:
| Absolutely. Many bills in the Senate in that time have
| gotten over 90. Here's one that passed 95-2 that I picked
| at random.
|
| https://www.congress.gov/bill/118th-congress/senate-
| bill/870...
|
| A lot of what happens in Congress is obvious to do and
| everyone agrees. While the media certainly focuses on the
| handful of things the two parties are at odds over, most
| of the lawmaking done by Congress is not controversial
| between parties, and is simply passed, so we don't hear
| about it.
| sugarpimpdorsey wrote:
| The last time something like that happened was probably the
| Patriot Act.
| Calavar wrote:
| The 2024 Ukraine defense funding bill passed despite
| having < 50% support in the majority party in the House,
| and it was not part of a reconciliation.
| rpiguy wrote:
| Affordable Care Act (Obamacare) was the most sweeping
| legislation ever passed via reconciliation.
| apsec112 wrote:
| Obamacare was passed via regular order (60 Senate votes),
| not reconciliation. There was a follow-up package to
| tweak it that passed via reconciliation in 2010, but the
| original bill was regular order. It's the only (very
| brief) window where one party has held 60 Senate seats
| since 1977.
| pfannkuchen wrote:
| It seems like a more formalized quid pro quo system is needed
| so that political favors can be split across bills and relied
| upon. This sort of thing seems to be human nature, it doesn't
| help anyone to pretend in the procedural rules that it
| doesn't happen.
| disgruntledphd2 wrote:
| This was called pork when it used to happen and people were
| very angry about it.
| onlyrealcuzzo wrote:
| Which is why we need to get rid of reconciliation and go back
| to actually needing to get compromise, but hell will freeze
| over twice before that happens.
| earth2mars wrote:
| This. TCJA removed it and OBBBA restored it. What am I missing
| here
| lesuorac wrote:
| It lets you claim BBB doesn't increase the budget by as much
| as it'll ultimately do.
|
| By having a bunch of random provision in BBB that generate
| revenue it lowers it's impact on the defect and then you can
| repeal them later on after passing BBB.
| rhinoceraptor wrote:
| Classic 45-47 maneuver, first create a problem. Then solve
| it, often poorly and incompletely. Finally, claim victory,
| another 300 IQ 5D chess move in the books.
| FireBeyond wrote:
| Or set a little timing booby trap. Like in this, "We're
| going to cut Medicaid, but only after the midterms, so if
| you start screaming about it, we'll blame the Dems for it."
| mindslight wrote:
| Twisting not required. Depreciation straightforwardly applies
| to every other business capital expenditure. Hire someone to
| put a new roof on a rental property, and you're out the tens of
| thousands of dollars cash while only getting an immediate
| deduction for one thirtieth of the value. If you were expecting
| to pay that cash out of income, it's effectively a realized
| income and then reinvestment.
|
| The recent (-ly undone) change went against decades of how
| things were, was crippling for medium size cashflow-positive
| startups, effectively increased taxes, etc. But it was really
| just a straightforward application of the general principles
| that apply to most everything else.
| djoldman wrote:
| ?
|
| This applied to salaries, it wasn't a capital expenditure as
| "capital expenditure" has traditionally been defined.
|
| This was an operational expense.
| mindslight wrote:
| Yes, salaries spent to build a capital asset. Half the cost
| of a new roof is paying salaries, right? And yet, you still
| depreciate the whole value of the completed thing, not just
| the cost of the input materials. If you hire the roofers
| yourself as employees, you're still supposed to be
| accounting this way - although obviously there are many
| ways to fudge it.
|
| The point is that building a piece of software that is
| going to be in use for several+ years is creating an asset.
| It just goes against our intuition since this industry is
| so driven by fast fashion, and the bookkeeping of specific
| components, their depreciation schedules, early end of
| life, (etc) seems like needless complexity.
| creato wrote:
| At least 50% of time on every software team I've ever
| been on was spent on maintenance and fixing bugs.
|
| You _can_ expense such time as opex, but it has to be
| justified, and that 's often difficult to do. Did you fix
| a bug by refactoring some code to avoid the problem? Is
| that capex or opex? Can you convince the IRS of such?
|
| The old (and now new) rules eliminated this accounting
| game and uncertainty.
| mindslight wrote:
| Sure. I get that having to facilitate accounting takes
| away from programming, and that nothing is cut in dry
| with the IRS. I'm not even a fan of the general idea of
| mandatory depreciation schedules, seeing depreciation as
| more of an artifact that fell out from double entry book
| keeping's proliferation of different types of accounts.
| My only point was that this is just the same regime that
| everything else has to deal with.
|
| For example if you pay someone to fix a leaky roof and
| they replace a section of a given size, can you call it a
| repair/maintenance expense or should you be depreciating
| it as an improvement to the building? Can you convince
| the IRS of such? The only reason this has more
| straightforward answers is that accountants have been
| answering this question longer.
| eastbound wrote:
| The debate is the duration of the capex in software. The
| law will oscillate between "Software lasts 15 years!" and
| "basically throw-away".
|
| At this moment, the law came back to 1-year deprecation.
| mindslight wrote:
| " _1-year deprecation [sic]_ " would mean that salaries
| paid in the second half of the (fiscal) year are only
| half deductible in that year, and half in the next.
|
| But seriously what is with this trend of throwing out
| simple reframings as if they're insightful on their own?
| tomrod wrote:
| While accurate, capex captures the building of things, like
| hiring a company (that pays salaries) to build a factory.
| AnthonyMouse wrote:
| > The recent (-ly undone) change went against decades of how
| things were, was crippling for medium size cashflow-positive
| startups, effectively increased taxes, etc. But it was really
| just a straightforward application of the general principles
| that apply to most everything else.
|
| The error was in reconciling them by getting rid of it for
| software R&D instead of allowing other business expenses to
| be deducted when they're paid for as well.
|
| For large stable incumbents that have the same expenses every
| year, the difference doesn't matter except in the first years
| after you make the change, because it doesn't matter if you
| deduct all of this year's expense this year or 5% of each of
| the last 20 years' expenses this year, they add up to the
| same deduction every year.
|
| Where it matters is for new challengers, because they don't
| have arbitrarily many years worth of legacy expenses to
| deduct, so their deduction in their first year will be less
| than their incumbent competitor's.
|
| It also creates a disincentive (or competitive disadvantage)
| to increase long-term investments. If some existing company
| had been making a $5M investment every year but is now facing
| new foreign competition and needs to increase it to $10M in
| order to stay competitive, they're in the same position as
| the upstart. Moreover, then they may not be able to do it,
| because they were going to have to run lean and divert the
| $5M profit they usually make to increasing their capital
| investments, but then the government is expecting tax on most
| of that $5M which means they can't spend it this year it even
| though it's ultimately a deduction.
|
| Notice what this does specifically in the case of real
| estate: If rents start going up the normal incentive is to
| build new housing, but now you have to put out all the money
| to build a new building in year 0 and not get to deduct it
| for decades. Is that the incentive we want? Probably not.
| mindslight wrote:
| Sure, a lot of that understanding was included in my
| recognition of the downsides.
|
| The fundamental dynamic is that the government wants there
| to be a forcing function on having to actually realize
| profits, so that taxes have to be paid in a timely fashion.
| They don't _want_ people to be able to reinvest all of the
| effective profit and keep kicking the can into the future
| indefinitely. Capital gains and retirement plans are
| exceptions, each for their own reasons.
| AnthonyMouse wrote:
| > The fundamental dynamic is that the government wants
| there to be a forcing function on having to actually
| realize profits, so that taxes have to be paid in a
| timely fashion. They don't _want_ people to be able to
| reinvest all of the effective profit and keep kicking the
| can into the future indefinitely.
|
| I would have to question whether that is actually a good
| policy.
|
| To begin with, it doesn't work unless you do it
| consistently, which they don't. Then businesses defer the
| taxes anyway, and you get huge market distortions because
| it majorly affects where investments go, e.g. we're then
| lacking for sufficient housing construction because it's
| heavily disfavored by the tax code over alternatives. But
| doing it consistently also doesn't work because many of
| the industries that have exemptions have them because
| they would implode without them. In particular, anything
| that experiences significant foreign competition would be
| screwed as soon as the other country does it the other
| way. It would also create bad incentives -- you'd have to
| get rid of the retirement deferral, damage everyone's
| retirement savings and create perverse incentives for
| immediate spending over saving/investing.
|
| Moreover, the main reason we use an income tax instead of
| a consumption tax is in order to have a progressive rate
| structure. If you want to put a different effective rate
| on someone who spends $1M/year than someone to spends
| $10k/year, a merchant collecting the tax at the point of
| sale wouldn't know what rate to charge. (There are also
| other ways to achieve this, like combining a flat
| consumption tax with a UBI to achieve the desired
| effective rate curve, but that's a more systemic change.)
|
| But if you allow business expenses to be deducted
| immediately, that's another path to having a consumption
| tax with a progressive effective rate curve. The rate can
| be higher for the people who spend more but you still
| have to pay the tax when you want to buy a yacht or a
| personal mansion. It also gives you a way out of the
| "they borrow money to avoid realizing capital gains"
| thing: Make the loan taxable income in the year it's
| taken out and a deduction in the year it's paid back, but
| if it's a business loan then you get a canceling
| deduction when you take it out and invest it (and the
| same for e.g. student loans), which makes it so you can't
| spend the money on personal consumption without paying
| the tax.
|
| Meanwhile if you always reinvest 100% of profits then you
| don't pay tax until you stop, but _that 's what we want
| them to do_. Build housing, hire people, invent things,
| donate to charity. These things are tax deductions on
| purpose.
| mindslight wrote:
| > _But if you allow business expenses to be deducted
| immediately, that 's another path to having a consumption
| tax with a progressive effective rate curve_
|
| If I had written a longer comment, I was going to go in a
| similar direction. But I think it's a bit fallacious to
| be talking about that when it would make the tax code
| even more lopsided to heavily taxing wage earners. Like
| when you buy a car to be able to get to work, you can't
| even deduct that from your earnings even though it is a
| necessary expense for being able to earn that income. If
| that last part were changed - both with direct deduction
| of things like living expenses and also unrestricted
| traditional IRA contributions/withdrawals, then it would
| make sense to start talking in terms of moving towards a
| de facto consumption tax. But without doing that, it just
| seems like a rallying cry to further reduce taxes on the
| investment-owning classes.
|
| (I'm using the word "deduct" in the business tax sense of
| direct subtraction, not the personal income tax sense
| where your expenses have to rise above the level that is
| otherwise a personal exemption. Being able to deduct so
| many specific expenses would of course end up placing a
| heavy bookkeeping burden on individuals, though)
| phonon wrote:
| ...and 1031 Exchanges. People defer profits on real
| estate across generations, now.
| trollbridge wrote:
| The immediate effect of this is that one of my customers
| simply cranked up the amount they can spend on R&D this
| year by the amount of the tax savings. Which is
| substantial, because they were only planning to expense 20%
| of what they would pay us, and budget paying about 25% in
| income taxes on the rest.
|
| So out of $100,000, that's $17,600 more in spending, or a
| 17.6% increase. And they can expense that extra $17,600
| too.
| tossandthrow wrote:
| > Immediate expensing never should have been changed in the
| first place
|
| This is indicative of ignorance. There is a reason why we have
| these rules.
| tomrod wrote:
| Please expound
| tossandthrow wrote:
| Ofcause.
|
| Fundamentally there are reasons why we don't allow
| companies to funnel all operational profits into capital
| assets without them paying taxes.
|
| An analogy would be a company that used all their profits
| to extract gold from the ground such that they get the
| labor worth of gold out. In doing so they would effeciently
| dodge paying taxes of their profits.
|
| Now back to your comment: you portray it is as only good
| that this law was changes . And in doing so you leave out
| these details that essentially leads to instantiating laws
| like these.
| rsync wrote:
| Your analogy suggests a deferment of taxes paid but not
| elimination.
|
| In your example, they still own all the gold and would
| eventually pay taxes on any liquidation.
|
| I bring this up because I, too, am as interested in your
| parent to know the original inspiration for these parts
| of the tax code...
|
| Further: I have a suspicion that this should be applied
| differently to C-corps vs. pass through entities in the
| same way that corporate taxes and retained earnings
| are...
| tossandthrow wrote:
| The depends on how you implement it.
|
| You could also just don't allow to deduct taxes on the
| work out into digging out the gold.
|
| In the end I do not care. But i feel like people would be
| equally ignorant if it was proposed to tax the software
| in other ways (eg VAT on the derived services from
| operating).
|
| Regardless, these are the discussions to have.
| trollbridge wrote:
| Sure, but not allowing expensing of software R&D was asinine.
| lsllc wrote:
| Looks like prior years can be caught up with:
|
| > Companies with capitalized domestic R&D expenses from 2022-2024
| can elect a catch-up deduction, which could significantly improve
| cash flow for firms engaged in innovation.
| umeshunni wrote:
| The 2nd most annoying thing about section 174 was all the time
| you had to spend classifying each engineer's time spent as R&D or
| 'internal software'. At my last company, every year, me and my
| engineering lead counterparts would spent almost a day reviewing
| each engineer's JIRA tickets to reconstruct how much of their
| time was spent on R&D vs internal software.
| supriyo-biswas wrote:
| At a previous employer, they used to have this process where
| they would classify each project as being in active development
| or being in maintenance, and even the tiniest bit of
| development work required the "initiation" of a "project" with
| budget planning and approvals.
|
| At the time I dismissed it as a bureaucratic process invented
| by the company; after all, they had no dearth of leaders adding
| bureaucracy to systems for the purpose of empire-building and,
| to a lesser extent, asserting self-importance. However, upon
| reading about Section 174, it made some sense, and I wonder
| whether they might just get around to removing these processes.
| viraptor wrote:
| > and even the tiniest of development work required the
| "initiation" of a "project" with budget planning and
| approvals.
|
| That's fully automateable though, right? Sounds like my
| script to upload a PR, create a JIRA ticket with the same
| name, link them up, auto-Done on merge.
| samrus wrote:
| You cant automate the tactical assessment of "do we want to
| incur this tax?" Not easily anyway
| viraptor wrote:
| I meant most of the process and boilerplate being
| automated. Someone still has to go through the
| rubberstamping process, but at least the BS and clicks
| can come from the BS and clicks generator.
| supriyo-biswas wrote:
| At the company I was speaking of, the business approval
| step involved many internal (and sometimes external
| meetings) and preparation of a feature and OKR document.
|
| While this was the obvious way of doing things there,
| without this project step I also don't think it'd have been
| regarded as a valid classification step for tax purposes.
| Cipater wrote:
| >was all the time you had to spend classifying each engineer's
| time spent as R&D or 'internal software'
|
| > every year, me and my engineering lead counterparts would
| spend almost a day
|
| This is quite funny. Not even a day, almost one.
| monster_truck wrote:
| Why would you waste time doing this when you could just make
| shit up?
|
| And just to clarify, that has been the MO any time I've been
| told to do this. If it's actually important they wouldn't want
| your numbers
| johncole wrote:
| I think we will see this lead to a boost in software developer
| employment.
| Spartan-S63 wrote:
| I'm hoping so, too, along with another boost in salary growth
| since they're immediately expensable.
| lsllc wrote:
| Might even ameliorate some of the corporate RTO efforts and now
| s/w devs will have more employment choice and a presumably more
| vibrant job market.
| mlinhares wrote:
| I doubt it, the narrative is that software engineering is dead
| and everything will be replaced by AI, so that salaries can
| continue to be depressed. Just like the original passing didn't
| really cause much trouble in the general market this repeal
| will mostly just produce more shareholder value.
| x3n0ph3n3 wrote:
| It's always been a nonsense narrative with lack of grounding
| in reality.
| seattle_spring wrote:
| Anyone who knows anything about software and has used AI for
| more than 24 hours knows that AI won't be "replacing"
| software engineering anytime soon.
| ldjkfkdsjnv wrote:
| ive been coding 5+ hours a day almost every day for 15
| years. i think ai will replace 70% of SWE in the near
| future. not employement, but 70% of the current work done
| by engineers
| hightrix wrote:
| Agreed. I see AI as a major tool upgrade in the same way
| the IDE was an upgrade from text editors. It will quickly
| replace the need to do trivial things and greatly reduce
| the time needed to do complex things.
| jnfno wrote:
| I've been coding 5+ a day since the late 80s
|
| And I agree. Because ultimately we don't need that much
| code in the first place. We need robust data sets.
|
| AI models will enable the data driven machine state
| dream. Chips that self improve models will boot strap
| from them and rely on humans to iteratively improve
| updates.
|
| Coding like it's 1970 in the 2020s and beyond is not that
| high tech.
| zeroonetwothree wrote:
| I don't even spend 70% of my time coding. I suspect
| that's common and looking at data it's more like 25% on
| average. So even if it replaces 100% of coding (unlikely)
| that's the extent of the gain.
| distances wrote:
| Agreed, seems it's a great day if I get close to 50% of
| coding time. The rest is various meetings, communication,
| and code review.
|
| And even with reviews you can currently plausibly
| automate only the code correctness check part, the juicy
| part of reviews is always manual testing of the change
| and doing the logical reasoning if the change is doing a
| meaningful thing. And no, the ticket with the spec is not
| a reliable source of this info for an LLM as it's always
| just a partial understanding of the concept.
| kasey_junk wrote:
| Some of my biggest productivity gains with llms come from
| areas that aren't coding. Research, summation,
| communication and operational issues have all seen pretty
| dramatic improvements for me when adding llms.
|
| I don't think ai will replace the career of software
| development but I do think the tools we will be using to
| to it will be dramatically different.
| AnthonyMouse wrote:
| At which point you're potentially looking at Jevon's
| Paradox.
|
| Software developers do X and Y. AI thing can now do X, so
| it's used for that, and it's cheaper, so the number of
| projects increase because you get more demand at a lower
| price. Those projects each need someone to do Y.
| akmarinov wrote:
| Hard disagree, I've been agentic coding the past couple of
| months and have written maybe 100 lines doing this for a
| living.
|
| The rest is coming up with SDDs and reviewing AI's code.
|
| I can easily see most devs, doctors and lawyers automated
| away in the next couple of years.
| throwawaysleep wrote:
| Very much agree.
|
| I am overemployed with 3 dev jobs at once. AI is writing
| virtually all my code and letting me nap all day.
| Eventually that will end once people see the power of
| them.
| coffeebeqn wrote:
| Either we have wildly different difficulty levels at our
| jobs or this is bs. I tried the agents (I get access to
| basically all state of the art from my company) and they
| still have all the same issues of agents from a year
| back. Each step gets more chaotic and the end result is
| always that I end up reverting the over complicated mess
| it made and writing it myself. One-offs with lots of
| context still sometimes work.
|
| Even a perfect eval loop like failing tests end up 80% of
| the time with them creating something way too complicated
| since they solve one visible but not root issue at a time
| and build on top of that hacky foundation until again I
| end up reverting it all
| akmarinov wrote:
| Yeah - that's the hard part now - dialing things down to
| eliminate the divergent paths the AI can take to
| implement what you want.
|
| You can tell it "implement feature X" and it'll go and do
| whatever's easiest for it, often something dumb, that's
| when people usually think "it's dumb, won't replace devs"
| and give up. Or you can nail down your requirements by
| talking to it and describing what you're looking for,
| often it comes back with things you hadn't considered or
| ways of doing things you didn't know. Then just tell it
| "implement this SDD" and watch it one shot it in an hour
| or so.
|
| There's also pain points - some languages like Swift have
| changed so often and there's little open source code to
| train on out there, so it's on the worse side if you do
| iOS development.
|
| It's a new skill that needs working at, but in the end
| your output is significantly increased.
| seattle_spring wrote:
| > in the end your output is significantly increased.
|
| The claim you're arguing against is that AI will replace
| software engineering as a discipline. Seems like you're
| instead saying that it will increase developer
| productivity, which no one disagrees with.
| akmarinov wrote:
| Well yeah, if you have one senior with the power of 2-3
| AI agents - you don't need juniors or sometimes mid
| developers at all. Let's say you're Whatsapp and your 20
| people develop the app, well now you need 5 at most for
| the same workload.
|
| Obviously we're not yet at the point where the CEO can
| enter "build me the next Uber" in Claude Code and watch
| the stock price go up.
| seattle_spring wrote:
| I'd love to get access to codebases made entirely with
| agentic coding that people deem a success. Everything
| they've suggested for me beyond trivial work has been
| wildly overcomplicated.
| mlinhares wrote:
| That doesn't matter, what matters is making the narrative
| stick.
| BobbyJo wrote:
| Original passing didn't cause much trouble because the
| provision didn't take effect til 4 years later.
| noodletheworld wrote:
| Are you being serious or sarcastic? I cant tell.
|
| Seriously, that seems unlikely.
|
| Changes like this may have an impact on employment but it's
| impossible to observe the results in a vacuum.
|
| Given that most large companies are towing the "AI means less
| jobs required" line, it seems likely that this will, at best,
| modestly slow the rate at which companies divest themselves of
| software developers.
|
| I cant see any reasonable reason, in a broader context, this
| would have a meaningful impact.
|
| (Yeah yeah, AI means more jobs one day maybe, but right now
| that is categorically not true, and the future is always pure
| speculation, but in the near term, the impact of this seems
| like it probably wont be material to me; maybe a small
| reduction in the number of layoffs)
| BobbyJo wrote:
| > I cant see any reasonable reason, in a broader context,
| this would have a meaningful impact.
|
| A significant amount of software dev employment is in
| startups. Companies that are spending on development, but
| aren't making much money yet, will see a huge benefit from
| this. The change in tax liability could mean a single seed or
| series A round paying for an extra 1-2 devs.
| kelnos wrote:
| At best it will undo _some_ of the decline over the past 2-3
| years.
|
| This "solution" is to a problem the GOP created themselves
| during Trump's first term, when they made the R&D deduction
| stuff expire in 2022.
| agwa wrote:
| As a small software business owner, I have to agree with Michele
| Hansen (who spent 2 years advocating on behalf of small software
| businesses for this very change): "we're finally going to get
| Section 174 relief, and I couldn't be angrier"
| https://www.linkedin.com/posts/mjwhansen_it-looks-like-were-...
| yieldcrv wrote:
| I disagree, every rider was independently lobbied for and the
| outcome would be the same if passed separately by Congress or
| as a rider in a larger bill like it was.
|
| There is no reason to have cognitive dissonance over it.
| acheron wrote:
| It proves they never actually cared in the first place, it's
| just arguments as soldiers.
| edaemon wrote:
| If every rider was independently proposed the outcome
| wouldn't be the same, reconciliation wouldn't apply and 60
| Senate votes would be required to pass them.
| yieldcrv wrote:
| decent point
|
| two counteracting forces:
|
| The senate parliamentarian decided they could be in the
| reconciliation bill
|
| and outside of the reconciliation bill, believe it or not,
| Congress does pass other bills over the 60 senate vote
| threshold
|
| This R&D one would be a decent candidate
| AnthonyMouse wrote:
| If you have a huge omnibus bill that has a good thing that
| the representative's constituents want, and then a mountain
| of burning trash attached to it, and the representative votes
| for the bill, they can defend the vote as getting the thing
| their constituents wanted.
|
| If you make them each a different bill and then the
| constituents want to know why they voted in favor of the hot
| garbage _by itself_ , how can they answer?
| benreesman wrote:
| Yeah. This is a tough one. Its a really bad bill that happens
| to also be the best thing that could happen in the economic
| life of most any programmer.
|
| This is going to make a lot of people's lives a lot worse and
| I'm against it even though it's an absurd windfall for me and
| people like me.
| doctorpangloss wrote:
| Not sure if this is an absurd windfall... It aligns software
| developers with the guild professionals, like dentists and
| lawyers, who had an economically equivalent benefit via S
| corp distributions. Except to get this one, you have to pay a
| royalty to someone to write your technical narrative.
| benreesman wrote:
| I got more inbound recruiter email in the last week than in
| the two years up until last week.
|
| Everyone's BATNA just skyrocketed. What you choose to do
| with a huge surge in your pricing power is up to you, but
| you have it.
| andrepd wrote:
| Yeah. Not gonna lie it's a bit obscene watching people in
| this thread revelling that their absurdly highly paid jobs
| will become even more highly paid, given what's at stake.
| benreesman wrote:
| When the hammer fell in late 2022 / early 2023 I was out of
| work for the first time in 20 years of uninterrupted
| employment without one day of unemployment. Having just
| carried my family (financially) through a bereavement that
| left people effectively unable to work (there are a zillion
| expenses you don't think about) I was also running on fumes
| myself, and I very rapidly surmised that I was going
| bankrupt : I had a cost structure that takes a minimum of a
| year to change and I had just gotten done telling the
| Valley where to stick their millions a few years earlier.
|
| So for me this is like, the end of a period where
| contrarian hackers can be passed on at arbitrary ability in
| a way that has no lower limit: there is no bottom now and
| there is no safety net.
|
| But I had about a decade of just never having to care about
| money at all before that, so maybe there's some karma in it
| too.
|
| For me this is like, OK I'm definitely not going to get
| frozen out of work with no place to live anymore, and I'd
| be lying if I said I didn't sleep easier last night than I
| have in a while.
|
| But even from that vantage point, I oppose the passage of
| this bill and will argue to see it overturmed: the people
| who it hurts are more vulnerable still.
| Thorrez wrote:
| Is the girl in the picture going to lose coverage? If yes, what
| part of the OBBB is going to remove her coverage? If not, then
| why go into all this detail about her if she's going to keep
| her coverage?
| GenerWork wrote:
| Nobody can answer any of these questions because they've been
| misled by misinformation which has ironically been promoted
| by the same people who bleat about misinformation on a daily
| basis.
| ttul wrote:
| Meanwhile, in Canada, not only can you expense R&D, but there is
| a cashable tax refund that will give you back about 60% of your
| developers' salaries...
| sMarsIntruder wrote:
| I hate to see this, but you're comparing two completely
| different systems. Like it or not, but Canada is much more
| "socialist", you can't expect it in any case to be like US or
| viceversa.
| whatshisface wrote:
| I saw a chart that added the market value of government
| support to income for US persons, and it used the term
| "household resources." I'd like to see a table of household
| resource distributions for Canada and the US.
| cbsmith wrote:
| Canada is "much more socialist" in that it has socialized
| medical insurance. Aside from that, it's maybe a _tiny_ bit
| more socialist, though one could argue it 's not more
| socialist at all.
|
| The systems are different, but saying they are completely
| different is really a stretch. There's a GST that the US
| doesn't have, which is, ironically, a regressive tax. If you
| ranked the tax code of countries by similarity to the US tax
| code, I'm not sure Canada would be at the top of the list,
| but it wouldn't be that far down.
| llm_nerd wrote:
| Canada is much more socialist, in your take, so it has more
| programs for corporations and private enterprise? Huh? This
| is nonsensical.
|
| Further, it's incredibly difficult to quantify countries on
| this purported socialism scale. Sure, Canada has universal
| healthcare like every single developed country but the US,
| but otherwise it's much more of a mixed bag. The US has
| always been vastly more "socialist" than its advocates think
| -- the military is a colossal make work project and is
| straight out of Soviet doctrine for central planning -- and
| of course the entire agricultural industry exists under a
| massive subsidization regime, but under the current
| administration....whoa.... There is no Western country that
| has a central planned economy, with a president that is
| taking direct control of corporations (US Steel) and
| demanding ownership of corporations (TikTok), while enlisting
| private executives as members of the military exactly like
| China
| (https://www.theguardian.com/technology/2025/jun/25/meta-
| exec...), all while saying the entire economy is a "store"
| that he has sole control over. Absolutely no one in the US,
| looking very Stalinesque ala the late 1930s, should be
| throwing stones about socialism.
| ttul wrote:
| I suppose it takes living in both countries to really just
| whether Canada is "much" more socialist. The US has a lot of
| socialism in the form of generous disability income
| replacement programs, Medicare and Medicaid, SNAP, and the
| like. Canadian provinces must implement a single payor
| medical insurance program within certain parameters, but
| dentistry - bar a very new and very small federal program -
| is fully private. And pharmaceutical pricing is largely free
| market.
|
| When you zoom in on some of the Big Beautiful Bill's new
| programs, they appear more "socialist" than anything
| Canadians have ever enjoyed.
| anovikov wrote:
| So it means that indirectly, developers' salaries are not a
| taxable income in Canada if they are working on R&D? Meaning,
| they do pay taxes on their income, but their employer gets
| those taxes back, so if tax is 60%, the employer could pay 250%
| of what they'd pay otherwise, get 150% back, then the developer
| pays 150% of taxes, and gets 100%, so in effect the salary is
| tax-free. Is that what you meant to say?
|
| If so, it sounds almost too good to be true. Why aren't all
| startups in Canada?
| nickff wrote:
| There are many limits on SR&ED, and the reporting/auditing
| process is burdensome. Canada also suffers from a variety of
| other inconveniences, mostly related to its dependence on
| resource extraction-related industries.
| ttul wrote:
| It's not terrible in comparison to the scale of the
| benefit. Just outsource the report writing to KPMG or
| another capable and reputable accounting firm and you'll
| survive audits and it won't kill your team. I would say
| over the years, SRED has helped us become better at
| managing the efficiency of dev.
| throwawaysleep wrote:
| Canada's lack of startups is heavily cultural.
|
| We adopt new products less. We are far more risk averse about
| purchasing goods or services from startups, far more risk
| averse about funding them (founders often give personal
| guarantees to get the investment), value the equity startups
| offer at far less, etc. Government is far more fussy about
| accountability with that refundable R&D money, so lots of
| time is spent filling out paperwork and hiring consultants to
| do it.
|
| Here is a video that explains a lot about Canadian
| purchasing:
|
| https://www.cbc.ca/player/play/video/1.4596459
| tormeh wrote:
| I don't think this is uniquely Canadian. And it's usually
| semi-rational, if you really hate dealing with switching.
| Most cheaper subscription providers will give you a good
| deal at first, then jack up the prices when they're bought
| by a major provider. New cheaper providers are founded, and
| the cycle continues. The cheaper prices last for two or
| three years, or similarly short. Most people would rather
| take the loss than having to pay attention to this stuff.
| throwaway2037 wrote:
| The cultural bit is underrated. Tobias Lutke from Germany
| is the co-founder and CEO of Shopify has written about this
| issue of Canadian business culture extensively. Also, the
| ecosystem of VCs in the US are unmatched globally. And, the
| internal market in US is f'ing huge.
| Canada wrote:
| Yeah, I never thought of it that way. Your plan sounds great,
| but, in practice how it works is you get paid about half of
| what you would get in the US. Currently less than half due to
| the unusual currency exchange rates.
| __turbobrew__ wrote:
| There is lots of paperwork for SR&ED, enough so that
| companies opt not to do it.
| nickff wrote:
| You can only expense Canadian R&D expenses; meaning anything
| that is not completely used up almost immediately is treated as
| an asset. This makes almost no difference for software
| development, but is very important (and disadvantageous) in
| more capital-intensive industries.
| ttul wrote:
| They just added capital expenditures as well at a 40% rate
| (compared with 35% for salaries). So this is no longer a
| concern.
| Galanwe wrote:
| There is something similar in France, the Credit Impots
| Recherche (CIR), I remember it was around 50%. I've heard it's
| going to disappear though, there were abuses.
| eric-burel wrote:
| Hi, CIR expert here, it's well and alive. There has been a
| communication push against it last year but relatively over.
| It's 30% of R&D expenses as a tax cut. Update: I think the
| 50% you mention is related to non salary expenses CII = a
| smaller similar system for innovation, which we differentiate
| from R&D. CII used to cover non salary expenses with a 50%
| forfait but this part has been removed indeed. It still
| covers 20% of salary expenses.
| forty wrote:
| "There are abuses" is really an understatement. "It's mostly
| abuse and there might be some legitimate beneficiaries" would
| be more correct.
| eric-burel wrote:
| It's hackernews, not Elon Musk's X or the French
| parliament, please bring sources and precise details.
| forty wrote:
| It's quite common knowledge :) if you want journalist
| material, I think there was a Cash Investigation on the
| topic a few years ago.
|
| I have discussed this topic with many other engineers
| (known from engineering school, from working 13+ years in
| the Paris tech startup ecosystem and from my worker
| union, whose scope include most tech companies) and I
| have never heard any of them saying they did not write
| bullshit CIR reports for bullshit projects. I have myself
| written my fair share of those bullshit reports. There
| are even companies whose business is to write the
| bullshit reports for you in exchange for x% of your CIR
| credit. I worked with such company.
| eric-burel wrote:
| My experience is different, so far I've defended R&D that
| I believed to be eligible to tax credits, in order for
| companies to be competitive with other countries that
| also subsidize R&D and innovation, namely USA and Canada.
| You can't generalize a 7 billion tax cut system based on
| one journalist work (the same and the same is quoted
| again...), opinions based on a few rotten fruits in the
| basket, and an anti-startup trend that amplifies this
| hatred for political and ideological reasons.
| Galanwe wrote:
| My experience, from 20 years as well, aligns with
| widespread abuses. Pretty much the whole financial sector
| is sponsored by the CIR, none of which contribute
| anything beyond the bullshit reports mentioned above. I
| myself wrote countless reports like that, most of them
| vastly autogenerated to look pompous.
|
| I don't remember having to defend anything to get the
| CIR, it's more of a judgment call on whether you feel
| confident to defend it if you get an audit, and these are
| very rare. We've had such audit in the past, and it made
| everyone rewrite each submitted report in a hurry to make
| them look more serious. No sanction were applied.
|
| At this point, my opinion is that the CIR has very little
| to do with actual research, but rather it's a
| discretionary tax subsidy for sectors in which France
| wants to be competitive.
| forty wrote:
| It's not only the tech startups, I've mentioned it
| because that's what a know best, but my brother works for
| a large industrial company, and they use the same tricks
| and also have their reports done by professional bullshit
| companies whose jobs is to make it look like some
| research happened (in their case it's sometimes somewhat
| the case - unlike tech startups - but most of it is just
| bullshit).
| huhkerrf wrote:
| It's also capricious. I've been in companies doing legitimate
| r&d who would spend man months preparing for the CIR only to
| get it rejected, while they got it in previous years for much
| less interesting work.
| veeti wrote:
| Meanwhile in one of the world's higest taxed welfare states,
| where you absolutely can deduct 100% of SW developer salaries I
| feel I've been taking crazy pills every time reading these
| threads. It's almost as if some folks in """Hacker""" News
| wanted this law to stay to further cement gigantic incumbents
| and make it impossible for bootstrapped companies to compete.
| llm_nerd wrote:
| It's 35% of eligible spend on up to $3 million, and 15% above
| that (15% and 15% if the corporation is not Canadian). Further,
| most software development simply doesn't qualify-
|
| https://www.canada.ca/en/revenue-agency/services/scientific-...
|
| If you're making websites or doing Shopify integrations, etc,
| that doesn't actually qualify.
|
| Something truly novel in AI or self driving or whatever --
| sure.
| ttul wrote:
| This is a naive perspective. In reality, most of the software
| development that a typical growth company does is eligible.
| As one of CRA's auditors once told me, "The general arc of
| your development has to meet the criteria of being
| technically challenging and uncertain, and you have to follow
| a generally scientific approach, measuring your results
| empirically. But if you need a web console to help with that,
| who are we to say that's not eligible support work?"
| llm_nerd wrote:
| >This is a naive perspective.
|
| Okay.
|
| SR&ED had 22,758 applications last year. Software
| development only accounted for 40% of it. So 9000
| applications from software dev firms, the majority being
| very small firms. That is a tiny, tiny minority of software
| firms in this country.
|
| >In reality, most of the software development that a
| typical growth company does is eligible
|
| No, it absolutely is not, unless you are _lying_ on the
| application. And yes, a lot of people lie to get government
| grants and subsidies. And it works out pretty good until
| someone audits it and realizes that someone is making a
| shitty instrumentation console that absolutely no one would
| say advances scientific knowledge and demands the credit
| back plus interest and penalties.
|
| And yes, I've seen people's absolute _bullshit_ SR &ED
| applications before. I've had peers ask me to review
| theirs, where they do bog standard bullshit dev but read on
| HN how super easy it is, and they convince themselves that
| "everyone is doing it". Only those signatures on the form
| that lies about what is actually being claimed.
|
| Again, it's awesome...until it isn't. Which is why the vast
| majority of software firms are not claiming this.
| jofzar wrote:
| So this is going to get all those jobs back that people have been
| layed off for right? Right?
| supportengineer wrote:
| Reversion to the mean
| coliveira wrote:
| Of course not.
| nine_k wrote:
| Hiring software engineers is going to become less expensive. So
| likely there's going to be more jobs on the market, and maybe
| better jobs.
|
| But when a forest is cut, usually a new forest that grows on
| that place looks different.
| 0xbadcafebee wrote:
| The elimination of green energy incentives is going to have a big
| negative effect on the economy. Those billions of dollars not
| only were going to new businesses and jobs, but they were joined
| with loans from banks and commitments from customers with the
| expectation that the government would be funding the remainder.
| This means private industry _and_ banks will be shouldering the
| loss of hundreds of billions of dollars, which, as any astute
| person should know by now, later gets shouldered by the average
| citizen in rate hikes, stock market plunges, increased inflation,
| etc. There goes your job _and_ 401k and here comes more expensive
| products.
|
| Aside from the direct negative effects: we lose even more to
| foreign countries who now have even more runway to gain expertise
| in green energy and sell to everyone else investing in it. Nobody
| but the 3rd world is increasing investments in coal/oil and
| there's no money we could make there anyway. So there goes any
| money we could've made on energy internationally.
|
| Either this country is intentionally being tanked, or we're in
| the stupidest timeline.
| sp527 wrote:
| Any green energy project that isn't nuclear is a waste of money
| and resources. Nuclear is now being pursued in earnest by the
| tech industry itself. There's no problem here.
| cheema33 wrote:
| > Any green energy project that isn't nuclear is a waste of
| money and resources.
|
| Nuclear's cost/megawatt is significantly higher than most
| other options. If anybody is reaching for nuclear it is
| because they are using up all available capacity through
| other means. Nobody picks nuclear for cost reasons.
| AnthonyMouse wrote:
| Data centers are a pretty good match for nuclear because
| they run 24/7 and use a fairly constant amount of power.
| Solar is cheap in terms of amortized price per kWh but then
| you need some other solution to supply power at night or
| when it's cloudy, and the price of that has to be paid _on
| top of_ the cost of solar.
|
| Meanwhile nuclear costs what it does in significant part
| because the number of new plants is low which requires the
| cost of designing new reactors etc. to be amortized over
| fewer plants. But if you build more of them that changes.
| saubeidl wrote:
| Nuclear is by far more expensive than other green options.
| SoftTalker wrote:
| It has been historically, but must it be?
| cbg0 wrote:
| I suspect that in the US nuclear is being pursued by the tech
| industry due to the current administration, if Biden were
| still in the White House, the tech industry would be pushing
| for offshore wind and solar panels.
|
| Nuclear is expensive and requires red tape and a long time to
| bring online, but the real benefit is that it can deliver
| power consistently all day, unlike wind and solar. I think
| the ideal future includes all of these plus better storage
| capabilities.
| nandomrumber wrote:
| What evidence is there of governments being more successful at
| picking winners than the market?
|
| Governments should stay out of the winner-picking business,
| which they do with money from the public purse, and allow
| individuals and enterprise to use their own money to have a go
| at picking winners themselves.
|
| If industry and banks find investment in any particular field
| unpalatable without Government incentive, then those
| investments were unpalatable to start with.
|
| Industry and banks will find something better to do with their
| money.
| jaybrendansmith wrote:
| Sure, I'll bite. Will they invest in more coal and gas
| instead? And help cook the planet? You post as if you don't
| know what it's about, but of course you do. Disingenuous and
| contemptible.
| ChromaticPanic wrote:
| This isn't a game so it's not about picking winners. It's
| about steering the economy so local businesses get an
| advantage over foreign entities.
| nandomrumber wrote:
| By all means, have government get out of the way so the
| economy can get on with it.
|
| I'm more in favour of tax incentivised encouragement,
| lowering the barriers to entry, and more so when there are
| proven benefits to the economy and society, and less in
| favour of government backed loans and direct cash
| injection.
| jnfno wrote:
| What evidence is there those with capital/the market are
| making the best engineering and science based decisions and
| not just juicing their portfolio because they'll be dead when
| shit hits the fan?
| raverbashing wrote:
| Cool, cut all the oil subsidies, and road subsidies, and let
| the market decide
| nandomrumber wrote:
| Did you know if you run a business (carry on an enterprise)
| the majority of the costs of doing business are tax
| deductible.
|
| That's another term _subsidised_.
|
| I'd argue fossil fuel industry subsidies are a net benefit
| to society as they help enable cheap reliable energy.
|
| Whereas renewable subsidies are a net negative because they
| don't. Everywhere more renewables have gone electricity has
| become more expensive and less reliable, completely
| antithetical to strong industrial development.
|
| Also, renewables seem to be driven forward largely due to a
| psychological contagion that a climate apocalypse is nigh,
| which is turning out to be completely toxic, especially to
| the minds of the next generations.
| tired-turtle wrote:
| > Everywhere more renewables have gone electricity has
| become more expensive and less reliable, completely
| antithetical to strong industrial development.
|
| Have you heard of Washington state? 75% renewable energy
| and 10th percentile for the cost per kWh.
| jandrewrogers wrote:
| Washington is a bit of a special case given that most of
| their electricity comes from vast hydroelectric resources
| constructed almost a century ago. That situation doesn't
| generalize to other places. It is disingenuous to imply
| that this is an example relevant to modern energy policy.
| jimmydorry wrote:
| The largest competitor to US renewables, would be China. They
| have been rolling back their subsidies for years. [1]
|
| China, India, Russia, Turkey, Japan, South Korea, and Indonesia
| (off the top of my head, and a quick google to add a few I
| missed [2]) have all increased investments into coal since
| 2020.
|
| The renewable industry in the US was wrought with companies
| seizing as many renewable credits and subsidies as they can,
| while providing as little as possible to show for them. If this
| moves the industry as a whole to focus on projects that are not
| just marginal at best, we should start to see better traction
| on projects that actually matter.
|
| We have long been told that renewables are cheaper in every way
| that matters, so let's see the economics of that play out.
|
| [1] https://www.reuters.com/business/energy/china-roll-back-
| clea...
|
| [2] https://ember-energy.org/latest-updates/wind-and-solar-
| repla...
| wraptile wrote:
| China has been rolling back subsidies because they won solar
| panels. No other country is even remotely close to market
| strength as China here and obviously for Chinese it makes
| sense to reduce incentives but does that make sense for the
| US which has 1% of this market power?
|
| > Between January and May, China added 198 GW of solar and 46
| GW of wind, enough to generate as much electricity as
| Indonesia or Turkey [1]
|
| 1 - https://www.theguardian.com/world/2025/jun/26/china-
| breaks-m...
| 0xbadcafebee wrote:
| > We have long been told that renewables are cheaper in every
| way that matters, so let's see the economics of that play
| out.
|
| Renewables are cheaper now than they used to be. Why? The
| same reason anything is cheaper the longer you make it:
| technological improvement, economies of scale, production
| efficiency, increased # customers, reduced capex, amortized
| r&d, etc.
|
| "the economics of that" aren't black and white. Just because
| something is expensive today doesn't mean it will be
| expensive tomorrow. But if something cheaper exists today,
| and nobody invests in the expensive thing (because "the
| market" doesn't see immediate cash gains in it), then the
| expensive thing never has the opportunity to become cheap.
|
| > The renewable industry in the US was wrought with companies
| seizing as many renewable credits and subsidies as they can,
| while providing as little as possible to show for them.
|
| The "show" is long-term. That's the whole point of all green
| energy: it's expensive _at the beginning_ , and then becomes
| increasingly cheaper over time, to the point you start saving
| money, and then you keep saving money. But to ever get to
| that point, you have to invest big at the start. That's what
| the subsidies are for!
|
| China has a massive and cheap labor force and decades of
| manufacturing expertise. That makes their products/services
| cheap _and_ advanced. Unless we literally take over Mexico,
| we don 't have the labor. And unless we start investing now,
| we'll never have the expertise. Without subsidies, we will
| never get on renewables, and we will always pay more for
| energy. Since the whole future of the world is dependent on
| energy, it might be a good idea for us to invest in it!
| nashashmi wrote:
| This was the expense that was removed in the first Trump tax
| bill. Amazing how it takes another super tax bill just to get it
| through
| root_axis wrote:
| I believe the impact of Section 174 has been vastly overstated,
| sadly we will soon observe this to be the case.
| doctorpangloss wrote:
| Well who the hell was complying anyway?
| BobbyJo wrote:
| What do you base that belief on?
| autobodie wrote:
| I would assume they think the cause of the layoffs was more
| related to the non-zero interest rate.
| cheema33 wrote:
| Nobody at my work knew anything about it. And we do have
| software engineers. I suspect only the very large orgs with
| expensive accountants were complying. And pay now vs later
| thing didn't really matter that much to them anyway.
| greenchair wrote:
| yep it is definitely a big deal for f500. lots of creative
| accounting techniques had to be used in the meantime.
| me551ah wrote:
| I doubt if this will make much difference. Offshoring as a tactic
| emerged in the pandemic when companies realised that being
| "remote" works just as well.
|
| Sure, foreign R&D still gets amortized over 15 years (NPV [?]59 %
| of a full write-off, so you "lose" ~8.6 % of your R&D spend in
| present-value terms, and only 6.7 % of the cost is deductible in
| year 1, creating a 19.6 % cash-tax gap). But offshore wages are
| often 50-70 % below U.S. rates:
|
| * Even after the slower amortization drag, hiring at half the
| cost nets you ~30 % total savings on R&D headcount.
|
| * On a pure cash basis you only need ~20 % lower wages to break
| even; most offshore markets easily exceed that.
|
| * So the labor-cost arbitrage far outweighs the tax timing
| penalty unless your foreign salaries are less than ~20 % below
| U.S. levels.
|
| In short: the 15-year amort rule hurts your tax deduction, but 50
| %+ lower offshore wages more than make up for it.
| BobbyJo wrote:
| This ignores the other financial and non-financial costs of
| offshoring: legal, cultural, temporal... a lot of the time,
| those close the gap.
|
| On paper, offshoring has made sense the entire time, and yet
| here we are in 2025 and companies still hire American devs. Not
| only that, they often fly in foreign devs just to pay them more
| here than if they had just offshored to their home country.
| __loam wrote:
| Yeah people have been offshoring then onshoring once they
| realize offshoring sucks since at least the 90s. I remember
| my dad, who was also a software dev, complaining about it 20
| years ago. It always swings back. The network effect in huge
| hubs like SF and NYC is massive.
| BobbyJo wrote:
| 100%. Most of the planet is cheaper than the US, and has
| been for decades. That being the case, how are there so
| many knowledge workers here still?
| Tade0 wrote:
| Hailing from an outsourcing destination I think I need to
| state the obvious: there exist IT jobs outside the US.
|
| Americans have a... distinct work culture and companies -
| local and foreign - are not stupid, so nowadays they aim
| for the 50-75 percentile in terms of compensation.
|
| On top of that you absolutely need to be fluent in
| English, which disqualifies half the candidates right off
| the bat.
|
| All this combined makes it not obvious whether one would
| want to/could work for an American company - particularly
| if it's through various middlemen.
|
| US used to be 100% worth it, but over the course of the
| last 25 years the ratio of GDPs per capita between USA
| and my country fell from 5.5 to around 3.75 and
| compensation naturally followed.
|
| Lastly, the dollar fell 15% since the start of 2025
| against my country's currency and that has had an effect
| on available openings.
| throwaway2037 wrote:
| > Americans have a... distinct work culture
|
| That is a mighty wide brush to paint your generalisation.
| Do Brazilians or South Africans or Sri Lankans also have
| "distinct work culture"? I assume yes. Not much being
| said there.
|
| Another way to look at it: If your country was much
| richer than the US the model would be flipped. Do you
| think Americans would post a similar generalisation here?
| Yep. Not much being said.
| fnordpiglet wrote:
| I've been a part of the entire arc of offshored teams since
| the trend started in the late 90's early 00's. I've never
| seen it work. The primary issue is and always has been time
| zone related. While it doesn't show to an accountant we do
| live on a sphere and there are implications to everyone.
| The solution is always to find some self contained effort
| for the remote centers but it never works because the
| entire company is pulling together and short of making the
| remote teams spin offs there's no way to disentangle
| dependencies. And at some level even if you could
| management has to work cross regionally which isolates them
| from their center of power in the home office time zone.
| The root is the company is asking you to make immense
| personal sacrifice so they can save money if the model were
| to work. There is no upside to anyone other than the remote
| management in this situation so they burn out quickly and
| still fail because literally no one else in the company
| cares in any meaningful way. It's unfair at its core and
| therefore fails.
|
| The issues of quality and whatnot are at their core racist
| IMO but are made real because of the timezone issue. The
| norms and culture expected in the home time zones don't
| translate easily and result in an impedance mismatch and a
| different measure of "good." Because the remote team is
| isolated and unempowered they always struggle to adopt the
| standard of the team and to some extent can't ever succeed
| in the quality space as it'll be an ever shifting goalpost
| whose reasoning is effectively hidden. Then layer in the
| latent resentment on both sides and the whole situation is
| bound to fail, but the home teams have the advantage of
| being resident with the only management that matters.
|
| I wish everyone involved would realize the experiment has
| failed. But CFOs are too powerful in most companies large
| enough to reasonably pull off outsourcing at all and the
| need for the CEO to please boards and investors who just
| operating off the financial statements and HBR white papers
| are too disconnected for why these efforts fail.
|
| Unfortunately the current persecution of immigrants in the
| US will drive these arrangements more and more. Rather than
| on shoring local foreign talent with the collocated team,
| foreign talent will opt to avoid the fear society being
| birthed. This will lead to a strong incentive to follow
| talent to their home country leading to more imbalance in
| talent disoriented time zones. Maybe this would require
| everyone to figure out the above issues but I seriously
| doubt it. I think it'll just make everyone less effective
| and not achieve anything positive for anyone.
| __loam wrote:
| One of the most insightful comments I've seen on this
| site.
| CalRobert wrote:
| It seems like more American companies are noticing that
| Latin America has lots of intelligent, clever people who
| produce good work, and cost less. I have worked with a
| lot of Argentinians and really enjoyed it.
|
| I'm in Europe now and it definitely is easier to set up
| calls with my South African colleagues than the American
| ones.
| fnordpiglet wrote:
| Yes I've done some excellent work with teams in Brazil.
| xlii wrote:
| I have approx. 15 years of experience working remotely for
| various companies all across the globe and was always an
| advocate of thesis that remote work is difficult and most
| people aren't cut for it and (to horror of many proponents)
| and on average are less efficient than on-site hires.
|
| There are many reasons: It's difficult to understand
| _intention_ when deprived of non-verbal communication and
| working in a choppy network call. Even if one can gloss over
| communication needs etc. there's burnout looming around the
| corner and natural, healthy laziness getting into the way.
| Sometimes even internal politics might be blocking
| knowledge/access/contribution for more or less peculiar
| reasons.
|
| It's not like it's impossible to hire remote engineer, yet my
| (completely unmetered) estimates out of experience is that
| approx. 10% of engineers willing to work remotely can sustain
| health (physical and mental) and be efficient outside of 1-2
| years of honeymoon period.
|
| There was some tumbling around COVID but IMO both stationary
| jobs and remote ones are doing well on mid-high quality
| positions.
| PeterStuer wrote:
| From experience I think your 10% feels overly pessimistic.
| 30-40% feels more accurate, just like only about the same %
| that can survive an open plan or cubicle floor.
|
| I see lots of people thriving in remote. Main reasons being
| a huge increase in quality of life. Regaining 2-3 hours of
| senseless commuting time per day, getting small household
| chores done over lunch, not having to schedule repair and
| maintainance appointments in the weekends etc. is _huge_.
|
| Now I do agree it is not for everyone. I see especially
| younger people living alone not coping to well. Part of the
| reason is they (ab)used the office as a socializing place,
| and are not used to organizing a personal social life
| outside work. There's also people that don't actually have
| much work outside of attending office meetings, and nobody
| thrives sitting in Teams calls all day.
|
| Then there's also real downsides. Some people living in
| shoebox appartments in the city just do not have the space.
| W While work can be done (more?) efficiently remote, but
| carreer climbing needs in person contact. It's like dating.
| Real dinner or a video call? No comparison.
|
| Best of both worlds would be 0 commute time to a luxurious
| private office inside the company premises. All the rest
| will be tradeoffs and compromises either way.
| xlii wrote:
| I can't disclose details but I've been doing mentoring,
| screening and interviewing + screening for years and saw
| remote communities grow from 10s to 1000s.
|
| What you're saying is true especially in the honeymoon
| phase, but the running joke is that you don't really live
| remote life unless solitude made you name a pigeon. I've
| seen careers of many of my peers and usually 5 years in
| people starts to seek on-site.
|
| There's another point to take into consideration though.
| In Europe commute is usually less than hour and for many
| morning routine is an opening to watch movies/read
| books/listen to music or podcasts. Some travel with
| friends so that's a social occasion too. Given accounts
| of my US colleagues where it's usually lone drive back
| and forth experience is different.
|
| Yet remote means omitting or social events and being
| outsider in the most-social environment (especially for
| men). Even hybrid with one day is much better than
| completely remote.
|
| What I found over the years is that no one can say what
| differentiates remote-able to non-remote. Quiet back-seat
| engineer can get depressed after year of remote and that
| guy who is always heart of the party can thrive in
| remote. It's just... it wears people down quickly and
| problems are usually creeping. Back pains coming from
| tension. Working hours slowly inflating to compensate for
| extra 10 minutes spent on lunch, this one time when you
| are bored at 8pm because you are bored in front of
| computer so why not help someone.
|
| Maybe I'm biased but I find situation that some people
| are remote and some aren't to be a healthy one. This
| preserves local jobs while also making an opening for
| those who want to do remote work for any reason
| whatsoever. And this honeymoon period is good to check
| out if you're fit for remote or not (and gives enough
| churn to provide opportunity to try).
| acedTrex wrote:
| I think it is really the commute that makes or breaks the
| office. My commute is 40 mins there and if I leave after
| 4pm itll take me an hour 15 to an hour 30 to get home.
| All in bumper to bumper standstill traffic
| HerrMonnezza wrote:
| Interesting remarks, thanks!
|
| When discussing remote vs non-remote with a colleague
| some time ago over lunch, he mentioned that "remote is an
| extreme version of yourself", so those inclined to slack
| off will slack off way more to the point of being
| unproductive, and those inclined to work longer hours
| will eventually just spend all their time working...
| Maybe over-simplified but I think he was onto something.
| jayd16 wrote:
| So the problem with this reply is you talk about thriving
| and then list personal benefits. Those are not thriving
| _in the workplace_ that companies are looking for.
| CalRobert wrote:
| A lot of companies just suck at it too. "Here's Slack,
| figure it out" seems to be a common approach. In person you
| can pester the person next to you when you're new, overhear
| conversations, etc. but remote it is MUCH harder to
| ascertain the culture, Slack etiquette, etc (my favourite
| was "people write in Slack all the time, in public, even to
| themselves, it's your job to mute Slack when you need
| focus, and don't use DM's unless you really need the
| privacy"), but I have only seen this done very well in one
| place - Auth0 (pour one out :-( ) . Maybe because it
| started remote with founders thousands of KM apart.
| xlii wrote:
| I agree.
|
| Rarely companies want to hire communication expert to
| help shape good practices even though they're spending
| hundreds of thousands if not millions on stuff like
| Datadog etc.
|
| I have this theory that mailing lists with rich search
| (slash Google Groups slash Newsgroups) are the best
| communication tools.
|
| Hadn't had opportunity to try it out though, as it was
| shunned ,,old tech".
| SpicyLemonZest wrote:
| Ehh, IME companies are hesitant because it's not a free
| parameter. All of your internal processes are built on
| top of how people communicate, so you can't change it
| without changing the entirety of how work gets done.
| People routinely hire experts for external comms, manager
| training, etc. because those are easier to adjust in
| isolation.
| sidewndr46 wrote:
| If management is so poor that they can't communicate
| intention in writing, then I don't really see how being in
| office or anywhere for that matter will help. They're just
| flat out incompetent. I've seen the opposite of this as
| well, where whatever management clearly communicated is
| most definitely not what is going to get executed.
|
| If internal politics are blocking knowledge, access, &
| contribution of any employee the correct action is not to
| hire them. If they are already hired, the correct action of
| management is to offer them severance.
|
| My experience working in software startups is that the
| average retention period of an employee is 2 years, in any
| work environment. What you're calling the honeymoon period
| is effectively just the average retention of the industry
| anyways.
| charlie0 wrote:
| I wonder if that's because at the 2 year mark, people get
| a lot more responsibility, but no pay increases to
| compensate.
| whatshisface wrote:
| The big issue is that companies are indeed poor in so
| many ways, and all they have to fix it with is money, and
| sometimes not even that.
| SpicyLemonZest wrote:
| I think you're glossing a bit over the word "intention".
| It's certainly easy for any competent manager to
| communicate _instructions_ or _requirements_ in writing.
| What 's hard is communicating the full scope of their
| intentions, including things like:
|
| * This bit is confusing to me even as I say it - I want
| to keep it in mind as we move forwards in case we're
| thinking about it wrong.
|
| * This requirement is really annoying and I'd love to
| find a way to get rid of it.
|
| * This part is super super urgent, and if we find a way
| to do it faster without too many other costs we should
| rework the plan.
|
| You can't "just" write these things down, both because
| some requirements aren't so annoying you can come out and
| explicitly say it and because too many parenthetical
| clauses start to make a document impossible to read. If
| they're not communicated nonverbally it's hard to
| communicate them at all.
| UltraSane wrote:
| When I have had 100% remote work jobs one think I have
| noticed that when I get into the "zone" and am being very
| productive having to go home doesn't interrupt it and I can
| keep being very productive for many more hours. Then I can
| slack off the next day if I want to.
| phil21 wrote:
| I have nearly 3 decades (ugh...) now of forming fully
| remote startups and working remotely.
|
| It used to be totally non-controversial and completely
| validated by direct personal experience that only a
| minority of the population is built to work remotely. It's
| so silly this is even an argument when our entire society
| and education is built on in-person interactions.
|
| I think the 10% number is variable depending on the org you
| are hiring into. A company that was never built to be
| remote or put any thought into how information and
| communication systems must be different than office? 10%
| may even be high. A company built from first principles
| with lots of thought and intentional design behind business
| processes being remote only? Probably much too low. It will
| be reflected even in the types of personalities being hired
| on average.
|
| If you reach for video calls as a solution to your remote
| companies communication issues you have completely failed
| and probably would be better served with fully on-premise.
| This would be the first question I would ask as an
| interviewee for a remote role. Any company regularly
| engaging or encouraging this means leadership is simply
| trying in the worst possible way to recreate an office
| environment and thus you can expect nearly everything else
| process based to be horribly broken for a remote company. I
| have some other "tells" as well, but this one stands out as
| the simplest as it displays a total disconnect with the
| reality of how to build remote teams. If you can't function
| like a well ran open source project you are almost
| assuredly doing it wrong.
| xlii wrote:
| I read, wanted to reply but would only echo what you
| wrote. 100% agree.
|
| Just a note that my 10% experience is based on general
| population of people who were working remotely for at
| least 6 months (and being a contractor I've switched orgs
| more often than average engineer)
| varispeed wrote:
| The idea of coming to office comes from the fact it was not
| practical for people to have computers and other devices at
| home. Now we have technology that this is no longer
| necessary, but of course commercial landlords and investors
| feel salty about it, so they lobby for this outdated now
| model to keep their investments artificially up.
| AnthonyMouse wrote:
| In addition to this, those factors contribute varying amounts
| to the total in any given case. So you also can't make the
| case that offshoring _never_ makes sense, because in specific
| cases it does. But now there is a ~20% incentive for it to
| make sense in fewer cases.
| cbg0 wrote:
| It also has to do with _how_ the companies handle the
| offshoring, as some larger corporations take the approach of
| just using an outsourcing company from a specific country
| (usually chosen by price) and assume that you can just pay a
| specific amount of money per developer and they will all be
| the same quality as the guys coming into the office.
|
| I've worked most of my career as a remote employee and I can
| say that the best arrangement is when the company is as
| involved in hiring offshore employees as they are with hiring
| onshore ones. Someone working through an intermediary will
| always be disconnected from the company's success, as they
| work for an outsourcing company, and not the US corporation
| itself.
|
| There are definitely a lot of discussions to be had around
| employee cultural fit, and I don't just mean company culture.
| You want a similar mindset and work ethic that your other
| employees have if you want a high chance of success.
|
| We also need to talk about how some companies haven't been
| able to successfully adapt their processes to work with
| remote employees alongside the office employees and sometimes
| treat the offshore ones as second class citizens, which is
| not really a great thing.
| eric-burel wrote:
| If I read properly this is explicitely targeting UE, Canada, UK
| and other countries with high wages and R&D and software
| engineering capabilities.
| tossandthrow wrote:
| Yep, seems like this is an opaque tarrif.
|
| Other countries should use this when retaliating.
| munch117 wrote:
| If I'm understanding this correctly then this is about a
| tax disincentive, making it more expensive for US companies
| to poach R&D talent from other countries.
|
| Not all countries will see that as a problem.
| tossandthrow wrote:
| The current administration is making a huge fuss out of
| VAT in Europe.
| MangoToupe wrote:
| Sadly, not to adopt such a sane taxation method....
| tossandthrow wrote:
| No, lol! That would hamper the USs strongest asset:
| consumption!
|
| which is likely being hampered anyways due to corporate
| greed in the financial sector - it is going to be
| interesting to see the actual breaking point for
| leveraged consumption
| jandrewrogers wrote:
| That isn't really possible because American Constitution
| expressly prohibits it. There is no realistic possibility
| of modifying the Constitution to allow it either.
|
| As far as the US Federal government is concerned it has
| little practical relevance.
| whatshisface wrote:
| It's not possible, really, to believe that markets are
| inefficient enough to pay twice the price for something in one
| place as another...
| PaulDavisThe1st wrote:
| In all likelihood you lived through 2008, and yet you
| continue to believe that market "efficiency" is somehow a
| builtin immutable property of particular trading rules?
| ozgrakkurt wrote:
| It is delusional to think you get same quality work for 70%
| less price.
| whatevaa wrote:
| It is not when ir comes to wages. People in other continent
| aren't dumb, the overall wages are just lower.
| klabb3 wrote:
| If you work at FAANG and relocate from NYC/SF to a smaller
| satellite office within the US, you can take a large pay cut.
| Unless things have changed in the last few years, companies
| usually pay location-based market rate. The lines are blurred
| with remote work - which market are you really a part of? But
| there is nothing magical that separates within the US from
| outside.
| ozgrakkurt wrote:
| Top engineers move to best pay location. For example best
| engineers in europe etc. move to US or get similarly high
| salaries in Europe. And having more high talent people in a
| location creates a different culture.
|
| There is ofc some difference but if you are taking averages
| you will have much better engineers in a company based in
| nyc vs berlin.
|
| I'm not an expert but this has been very apparent in places
| I worked, US based companies just had a better work setup
| and everything moved faster and with higher quality.
|
| As an example, just saying an engineer is quarter the price
| in Turkey so you can just outsource there is very foolish.
| It just doesn't work that way, maybe in wet dreams of CEOs
| only.
|
| Similar thing with LLMs, some people are salivating over
| how they won't need developers but it just isn't that way
| yet.
|
| Seeing how hungry businesses are for outsourcing and hiring
| remote, and seeing how it isn't really working that way
| should be concrete proof for this.
| eru wrote:
| > Offshoring as a tactic emerged in the pandemic when companies
| realised that being "remote" works just as well.
|
| Offshoring is far older than the pandemic.
| bravesoul2 wrote:
| Not convinced. Offshore has been possible since forever. Maybe
| IC cam be remote now. Your team can be global. US lead, 2 India
| based devs, 2 brazil devs. But not having this wasn't a blocker
| for saving money.
|
| 10, 100 or 500 people team in India who could work in the
| office together was possible forever.
|
| It will change. I think once other countries become bigger
| investment centres. Not sure how yet though. US is a good
| potting soil for a startup because there is this huge
| addressable and free market. And the startup ecosystem. Then
| add in that most startups want WFO and minimum synced time
| zones... and for larger tech all that specialism is in house in
| the US.
| g0db1t wrote:
| Yeah, there's simply a lot of 'Muricans thinking programming
| and software dev. for some reason only can be done inside of
| the US.
|
| As a EU senior dev I know zero senior devs making six figures
| pa - Go figure
| bravesoul2 wrote:
| I think there is game theory at play. I don't think Google
| for example is leaving money on the table. They hire
| worldwide of course but they are not swapping US for
| cheaper countries on mass and it must be for a good reason.
| Maybe it's a missed opportunity and some YC company
| dominates the new arbitrage. Who knows! I think I like the
| soil analogy. Moving the palm tree to another spot is risky
| if it's doing well in its current soil.
| CalRobert wrote:
| It's not the heady days of 2022 but six figures shouldn't
| be impossible for someone with 10+ years of experience. But
| the trick is to (mostly) ignore the European companies and
| go for the American ones operating in Europe. Switzerland,
| Norway, and Ireland can be decent too.
|
| I'm still stunned when I see what devs are paid in Germany
| and southern Europe though.
| FirmwareBurner wrote:
| _> I'm still stunned when I see what devs are paid in
| Germany and southern Europe though._
|
| Are German wages really low? I thought Germany as the
| richest country in Europe.
| CalRobert wrote:
| They seem much lower than, say, Ireland, Switzerland,
| Norway, etc. Eastern and southern Europe are low but also
| lower cost of living. A fraction of the US regardless.
| FirmwareBurner wrote:
| I think you're only looking at big tech wages when you
| compare with Ireland. Norway doesn't have much of a tech
| industry.
| disgruntledphd2 wrote:
| Yeah but there's lots and lots of no big tech US
| companies in Ireland. They generally don't have much
| equity or bonuses but the base is OK. I got 6 figures
| from a bunch of them in Ireland so it's possible.
| okanat wrote:
| Usually one earns half to a third of net wage in Germany
| compared to East Coast US. A maximum of 100k total cash
| compensation is usually the norm for mid-size companies.
| That is for the most senior engineers. It is also taxed
| almost at 50%.
| kevin_thibedeau wrote:
| Six figures isn't special in the US for skilled tech
| workers. My starting salary as a college grad 25 years ago
| was an unremarkable $55K when dotcoms were slinging six
| figure salaries and options. That is now $102K.
| throwaway2037 wrote:
| > Offshoring as a tactic emerged in the pandemic when companies
| realised that being "remote" works just as well.
|
| I am confused by this comment. Offshoring IT work to India has
| been going on since the early 2000s. The established model at
| many non tech companies is a few people onshore talking with
| biz stakeholders, then directing offshore staff.
| bsenftner wrote:
| Since I 90's, I remember it.
| FartinMowler wrote:
| Yup, lots of Y2K work shipped offshore in the 90s while
| onshore worked on the web boom. After Jan 1, 2000, mgmt
| thought, hey, how can I use these cheap guys elsewhere.
| dimal wrote:
| Won't make much of a difference? To what?You're only talking
| about whether to offshore or not. Not whether to HIRE or not.
|
| Many companies simply won't offshore core functions because
| doing product development on your core product with a team in a
| different time zone or from a very different culture often
| doesn't work. But this will matter to companies that have laid
| off US engineers or avoided hiring and now won't have that
| extra tax burden.
| xvector wrote:
| Thank jeebus.
| archagon wrote:
| Oh, goody!
|
| Also, ICE has a bigger budget now than most of the world's
| militaries[1]. But let's not talk about that.
|
| [1]: https://www.newsweek.com/immigration-ice-bill-trump-2093456
| saubeidl wrote:
| An organization of goons who grab people off the street and
| disappear them to concentration camps? Why does that sound so
| familiar?
|
| Capitalists have always been involved in the rise of fascist
| movements.
| drstewart wrote:
| >Why does that sound so familiar?
|
| Probably because you've seen it repeated so much in your
| hyper-propaganda bubble of reddit that you've started to
| believe it
| saubeidl wrote:
| I am Austrian. My entire education was dedicated to the
| rise of fascism and how it could happen and how to make
| sure it never happens again.
|
| I know what I'm seeing.
|
| Don't believe me? What about subject matter experts that
| decided to flee the country?
| https://www.nytimes.com/2025/05/14/opinion/yale-canada-
| fasci...
|
| Or how about an excerpt from a book written based on post-
| WW2 interviews of Germans? Does any of that sound familiar
| at all? https://press.uchicago.edu/Misc/Chicago/511928.htm
|
| > They say, 'It's not so bad' or 'You're seeing things' or
| 'You're an alarmist.'
|
| [...]
|
| > "But the one great shocking occasion, when tens or
| hundreds or thousands will join with you, never comes.
| That's the difficulty. If the last and worst act of the
| whole regime had come immediately after the first and
| smallest, thousands, yes, millions would have been
| sufficiently shocked--if, let us say, the gassing of the
| Jews in '43 had come immediately after the 'German Firm'
| stickers on the windows of non-Jewish shops in '33. But of
| course this isn't the way it happens. In between come all
| the hundreds of little steps, some of them imperceptible,
| each of them preparing you not to be shocked by the next.
| Step C is not so much worse than Step B, and, if you did
| not make a stand at Step B, why should you at Step C? And
| so on to Step D.
| drstewart wrote:
| > They say, 'It's not so bad' or 'You're seeing things'
| or 'You're an alarmist.'
|
| Ah, well in that case, it's clear to me Austria is
| actually the one on the brink of fascism. It's clear to
| me, having extensively eaten a lot of strudel (makes me
| an expert in Austria), that it's now a fascist country.
|
| And if you say: 'It's not so bad' or 'You're seeing
| things' or 'You're an alarmist.' then clearly you're just
| in denial.
| saubeidl wrote:
| You've lost me. I'm not sure what you're trying to say
| here, could you rephrase your point in a more coherent
| way please?
|
| But also, yes, Austria was on the brink of fascism not
| too long ago. Our far-right party almost got to form a
| government and their plans were quite sinister.
|
| Thankfully, disaster was averted due to egos and greed -
| the far-right and center-right couldn't agree on who gets
| to pilfer to country more, so they didn't end up forming
| a coalition.
| drstewart wrote:
| Your entire argument boils to the fact that you live in
| Austria and that makes you an expert on fascism and if
| anyone tries to refute you then it immediately means
| they're in denial.
|
| Which is, of course, non-sensical.
| saubeidl wrote:
| I never said I live in Austria. I don't. But having grown
| up in Austria, the rise of fascism was the major theme of
| my entire education.
| squarefoot wrote:
| Italian here, and I know a few things about fascism not
| just because of that. Yes, what is happening in the US is
| the rise of a fascist state controlled by a small
| minority of very wealthy and powerful people purely for
| economical reasons with Trump being just a tool in their
| hands. As with happened in my country back then, there
| are only two possible reasons for endorsing it: being
| part of the cult, or being part of the club. That's why I
| stopped long ago any attempt at reasoning with
| apologists.
| dambi0 wrote:
| That isn't true at all. Some of the argument relies on
| the experience of an Austrian education, but we are also
| encouraged to refer to other provided sources if we
| choose to seek other opinions.
| AnthonyMouse wrote:
| This argument has a problem:
|
| > They say, 'It's not so bad' or 'You're seeing things'
| or 'You're an alarmist.'
|
| It provides no way to distinguish between when the thing
| is happening and when it isn't. If people say you're an
| alarmist, by what mechanism do you evaluate whether
| they're correct?
| saubeidl wrote:
| And that is exactly the mechanism through which fascist
| regimes keep resistance down and dissenters in a state of
| self-doubt.
|
| People like the guy accusing me of being "hyper-
| propagandized" knowingly weaponize this uncertainty to
| become willing enablers.
| AnthonyMouse wrote:
| You didn't actually answer the question.
|
| It's like making the argument that denying an accusation
| is evidence that it's true. It's rubbish because people
| would also deny it if it was false.
| FirmwareBurner wrote:
| _> You didn't actually answer the question. _
|
| He never does. If you go through his comment history all
| he does is shill for Germany and EU how they're the best,
| and shit on Trump and the US how they're the worst and
| that's it. He never has any arguments beyond appeals to
| emotional manipulation of "look at the fascists" based on
| fake or one sided articles. Best treat him as a troll.
| dambi0 wrote:
| Which is just as true of the argument
|
| > Probably because you've seen it repeated so much in
| your hyper-propaganda bubble of reddit that you've
| started to believe it
| AnthonyMouse wrote:
| Except that argument admits a means to evaluate it. You
| take the thing repeated ad nauseam and subject it to an
| evidentiary requirement. Are people actually being held
| without habeas corpus? Are people actually being executed
| based on their ethnicity? If anything in this nature is
| happening, has the rate of it significantly increased
| recently or has it been going on for decades?
|
| The last question is pretty important if your argument is
| "Trump is a fascist and all we have to do is get him
| out", because then that argument is erroneous and you
| have to actually change the status quo instead of
| returning to it.
| batty_alex wrote:
| Really grabbing at straws to dismiss the evidence of your
| eyes and ears here, huh?
| saubeidl wrote:
| "Never believe that anti-Semites are completely unaware
| of the absurdity of their replies. They know that their
| remarks are frivolous, open to challenge. But they are
| amusing themselves, for it is their adversary who is
| obliged to use words responsibly, since he believes in
| words. The anti-Semites have the right to play. They even
| like to play with discourse for, by giving ridiculous
| reasons, they discredit the seriousness of their
| interlocutors. They delight in acting in bad faith, since
| they seek not to persuade by sound argument but to
| intimidate and disconcert. If you press them too closely,
| they will abruptly fall silent, loftily indicating by
| some phrase that the time for argument is past." - Jean
| Paul Sartre.
| myvoiceismypass wrote:
| > Probably because you've seen it repeated so much in your
| hyper-propaganda bubble of reddit that you've started to
| believe it
|
| I've seen it with my own eyes, no fucking thanks.
| perihelions wrote:
| That (initially) $175 billion/year will pay for itself in
| forced labor. I think most countries with large-scale systems
| of concentration camps converged on that solution, when the
| costs of those systems ballooned into something unsustainable.
|
| Modern China has that. Their system makes use of their
| (reportedly millions) of incarcerated Uyghurs as low-skill
| forced labor, mainly in textiles/clothes. Few talk about it,
| but a significant fraction of Western clothing comes out of
| these camps.
|
| The 1940's Germans were efficient: in extremis, they realized
| you could optimize value from concentration camps by starving
| the workers to death, extracting value from the final months of
| their lives with minimal operating costs. That was
| "extermination through labor".
|
| Hacker News, being what it is, will be most focused on the
| impact on their 401k's. Their grandchildren will read these
| comments.
| archagon wrote:
| The fact that this is downvoted is deeply disturbing. Timothy
| Snyder has similar thoughts on concentration camp labor:
| https://snyder.substack.com/p/concentration-camp-labor
|
| Meanwhile, SV darling Curtis Yarvin is plainly insinuating
| that we should bring slavery back: https://bsky.app/profile/d
| id:plc:gqqqg5xi4p2x4bfgphr7akip/po...
|
| What in the fuck is wrong with people?
| charlieyu1 wrote:
| This bill is so random. The poker world is going doom and gloom
| when BBB limits the amount of gambling loss deductibles to 90% of
| gambling wins.
| phtrivier wrote:
| Remember when we software engineers painfully learned to _not_
| do massive releases with hundred of changes that are guaranteed
| to create bugs ?
|
| Well, imagine if instead we were _incentivized_ to create lots
| of bugs in huge releases, because it helped us ship that one
| important feature that the PM wanted in the middle of the
| garbage - and also, that we were guaranteed never to have to
| debug the software ever, and god forbid, to use it ?
| CraigJPerry wrote:
| Could this transfer enough money to mint a person as the first
| trillionaire?
|
| Econ 101: A government deficit increases the net financial worth
| of the private sector.
|
| The US usually increases the net financial worth of the private
| sector by around $2tn per year, OBBB should move that to around
| $3tn per year (CBO estimate
| https://www.cbo.gov/publication/61486)
|
| If you accumulate a dollar per second in net worth, then you
| become: A millionaire in 11 days A
| billionaire in 32 years A trillionaire in 32,000 years
|
| Obviously an indiscriminate increase in money without a
| corresponding increase in output will show up in inflation.
|
| So it's a wealth transfer, from those whose financial affairs
| will remain comparatively static (your dollar will be worth less
| via inflation) to those who can capture the new money streams.
| phtrivier wrote:
| It was floated a few weeks ago they this tax break's
| disappearance was responsible for mass lay offs in tech.
|
| Other theory were AI and interest rates.
|
| I'm pretty sure next rounds of layoffs will have another "good
| reason".
|
| Personally, I'm still partial to my pet and hard to document
| theory of "when headcounts go down, share prices go up - and past
| a certain size and age, the goal of a massive corporation is not
| to build things any more, but to pay for retirements through the
| resale / buybacks of shares"
|
| But, hey, BBB is singed, so everything will be awesome soon, I
| suppose ?
| empathy_m wrote:
| Hey hey, maybe it will help job stability.
|
| Gergely Orosz, whose writing is influential in tech spheres and
| fun to read, has been a loud proponent of the theory that
| TCJA's elimination of the immediate expense of R&D research
| cost was the skeleton key explaining technology sector layoffs.
|
| It seems to me to that many technology-industry trends are
| driven by vibes:
|
| * People seem to love reading articles in any kind of media
| source about their company's products and are remarkably
| credulous of them / influenced by their content. Not just PR
| generating roundup reports of media coverage, this is also
| engineers and leaders who follow any coverage of their firms
| quite closely.
|
| * There really does seem to be a sort of contagion effect with
| layoffs where, once one firm began doing it, everyone did
| (layoffs.fyi has a lot of data supporting this kind of
| hypothesis)
|
| * Among founders and engineering leaders, there does seem to be
| a common set of ideas - not just the group-chat consensus that
| helped kill SVB, but just an overall whisper network of facts
| that everyone knows is true - which guide their choices.
|
| Overall it seems reasonable for software-industry employees to
| hope a narrative takes hold like "we had to lay off lots of
| people because their headcount didn't pencil out during the
| annual FP&A cycle under the new TCJA R&D rules, but now that
| the new law has restored immediate R&D expensing the formula is
| going to make the opaque headcount number higher, and jobs will
| be more stable". The idea might even become true if enough
| people believe it.
|
| Personally I think the layoffs are better explained by another
| phenomenon, superpersuasion from AI. (My niche view is that the
| first superpersuader success story was when the chatbots
| convinced business leaders to reallocate resources to buying
| more GPUs and LLM tokens and lower investment in the rest of
| their lines of business.)
| grumple wrote:
| This tax issue (not a break - normally you can count employees
| as a businesss expense for the current year, this made software
| unusual) meant that startups or other tech companies were
| extremely disadvantaged in the short term, and had to pay way
| more in taxes than they should have. For startups, having to
| pay far more in taxes during the first few years of existence
| is crippling.
|
| This fixes that problem. That encourages both investment in
| software and encourages software companies to hire.
| rendaw wrote:
| There's something I didn't get about the discourse about this,
| maybe someone can explain. The tax change greatly affected small
| businesses/startups with unstable revenue, right? But companies
| like Amazon, Google, etc are much more established companies with
| diversivied, stable revenue and longer term planning I'd assume -
| so it doesn't seem like this should have affected them as much.
|
| The popular story currently is that the massive layoffs were due
| to the tax/accounting change, but in that case why the big
| players like Amazon etc have so many layoffs? Or is that the
| popular story because, while Amazon etc are large, by total
| employee count most people are employed at smaller business that
| were more affected by this?
|
| Or was the FAANG stuff actually AI after all? The tax change
| story sounds more plausible to me but I can't connect everything.
| pm90 wrote:
| Its a combination of factors. The end of ZIRP made raising
| money more expensive and the tax change made hiring Software
| Engineers more expensive. Small businesses faced existential
| challenges and cut back, so now there was less demand from
| them. Then Big Tech realized they needed to layoff to post
| better numbers to continue boosting their stock (even though
| they made enough revenue) so started cutting jobs.
|
| With this change one of those factors has been eliminated, so
| we will see startups/small businesses become a lot more
| competitive.
| pavlov wrote:
| Is there a more bizarre legislative process anywhere in the
| world?
|
| The US Congress is practically able to pass only a single giant
| bill every year. To work around its own deficit rules, these
| bills are packed with taxation time bombs where rules have
| expiration dates or delayed starts several years in the future.
|
| Then, if Congress doesn't get around to defusing its own time
| bombs, you get situations like this R&D expensing fiasco where
| American businesses and employees pay the price. Unless the bomb
| is hopefully retroactively cancelled, like happened now.
|
| On top of this madness, there's an executive branch operating
| like a runaway autocracy, producing a flood of executive orders
| that intentionally flaunt laws and even target specific private
| entities (e.g. Trump's attacks on law firms that worked for his
| opponents, and universities he doesn't like).
|
| How long can a nation function like this? If the bond market
| loses faith in this process, there could be mayhem. Will be
| interesting to see if the passage of BBB impacts US debt when
| markets open again on Monday.
| kevin_thibedeau wrote:
| Congress has transformed from a body of civil servants working
| toward a common goal to a bunch of solipsist narcissists happy
| to burn everything down for more face time in the beltway media
| echo chamber.
| kzrdude wrote:
| It's a year of very rapid change. I just realized the other
| week (naively) that we (non-US) should really be bracing even
| more than we are. For shocks to come, economical, cultural as a
| reaction to the slide towards an authoritarian presidential
| system.
|
| It's not a time to be watching though, but to act.
| jayd16 wrote:
| The unserious and corrupt are consistently rewarded with re-
| election. I really have no idea how we move forward.
| Sammi wrote:
| Get rid of the First Past the Post voting system. Almost all
| the brokenness of US politics is downstream from FPTP. It
| incentivates divisiveness instead of collaboration and
| consensus, which a better voting system would.
| bgnn wrote:
| So US will continue subsidizing its R&D while complaining the
| rest of the world is doing so? What changed then?
| bongodongobob wrote:
| If you're going to subsidize anything why wouldn't it be R&D
| bgnn wrote:
| There's nothing inherently wrong with it. Though it creates a
| competitive advantage and forces other countries to do the
| same, of not more. Everyone starts pointing fingers at each
| other and imposing tariff at the end.
|
| Plus this puts pressure on manufacturing, as they will not be
| able to compete. So yeah, as a tool to boost knowledge
| economy it works but is it objectively a good thing to do I
| don't know.
| aaronblohowiak wrote:
| why wouldn't r&d count as an expense? why do amortization
| schedules constitute a subsidy?
| Spivak wrote:
| Our glorious R&D subsidies, their savage market manipulation.
| trollbridge wrote:
| It's not a subsidy. They just are letting people immediately
| expense R&D instead of requiring it spread over 5 years.
| qiine wrote:
| Humans play games to learn, the more AI do the same the better
| they will get
| bjoli wrote:
| I'm not really that into US politics, but to me this bill seems
| like a gargantuan transfer of wealth to already wealthy people.
| How does this land with the people who voted for Trump outside of
| the traditional republicans? Can they finance it without raising
| the debt ceiling?
| ksec wrote:
| May be a Naive Question: Has there ever been a time, where Tech
| or Software companies have to pay tax even when they are un-
| profitable. And if not, given the historic low interest rate, why
| not borrow and continue to grow until the company can no longer
| manage to spend all your debt? Correct me if I am wrong I think
| that used to be the playbook for Amazon.
|
| There are companies which I dont understand why they are keeping
| all the profits and not reinvesting for R&D or other purposes. I
| must be missing an angle on this. Apart from investors, what else
| would it be?
| rwallace wrote:
| Looking through the latest 'Who's Hiring' thread last week, I
| noticed that a higher percentage of the remote jobs seemed to
| specify Remote (US). Could one of the causes of that, have been
| employers reading ahead and making decisions on the basis that
| this bill might be passed? Or is there some other reason? Or is
| it just a case where it fluctuates randomly from month to month,
| and I am trying to read pattern into random noise?
___________________________________________________________________
(page generated 2025-07-05 23:01 UTC)