291–300 of 991 posts
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It's so depressing to hear that congress can't even do small things that everyone agrees upon.
If everyone agreed on it, Congress would have no problem doing it (Congress itself, after all, is a subset of "everyone".)
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That "suspends" should be understood as "continues to hold-hostage" / "renews as a time-bomb to screw over some other party".
Removing it would make Congress less powerful, and we can't have that now can we.
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We're not talking about a tax deduction in the sense of a special privilege, we're talking about simple calculations of profit. Before this change, tax for software development was calculated against: * Profit = Revenue - Expenses And software developer salaries fell neatly into Expenses unless you were looking for an R&D tax credit. After this change, tax for software development is calculated against this new equat…
It is a subsidy! Why should money spent on software _development_ not have to be deprecated over time like other money spent on _development_? I get that it sucks from a cash flow standpoint but the same is going to be true of other R&D expenses. It's just that we're more exposed to this specific R&D expenditure and not others.
And, as a sibling points out (and as I pointed out in a comment at the top level), software is in this regime singled out from all other possible R&D expenses, making it particularly vulnerable. A skilled accountant/lawyer can probably turn big chunks of other R&D expenses into something that doesn't fall under 174. No amount of skill can do that for software, because we're singled out.
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No but if a TV was in my house yesterday I’d bet that it’ll be there today. And my point about there being no natural state of subsidies is more important.
Those subsidies lasted a long time, but just as with a TV they didn’t last forever. So if your argument is some subsidy will probably happen next year sure, but individual subsidies change over time. No specific subsidy is the default.
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It's so depressing to hear that congress can't even do small things that everyone agrees upon.
If everyone agreed on it, Congress would have no problem doing it (Congress itself, after all, is a subset of "everyone".)
Is there a flaw in saying, "salaries should always be considered a business expense and cannot be amortized over many years." ?
How about the salaries of employees being paid to create a new line of business? Say, the business runs restaurants and you decide to break into the tax software business. Can you avoid taxes on restaurant profits right now in order to build your new unrelated venture. ISFICR, tax law allowed outright deducting of costs of the current business, but not costs for starting a new one. Not deducting the new costs against…
lol
Discouraging starting new businesses would be unconstitutional. All freedom in the US is derived from being able to participate in controlling capital.
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This is a highlight in an otherwise shitty bill. I saw let Trump’s ugly bill die and then a small fix up to the tax code could be this. Should be able to pass.
This bill is goated for upper middle class and tech and defense sector And I’m tired of pretending like we aren’t going to be beneficiaries Every Congress increases the debt, we can acknowledge that the cuts they picked are going to wreck the lower class especially with the medicaid, we can acknowledge that it won’t meet its goals of cuts but are you guys just scared to acknowledge its going to super charge things th…
No, it's not, because giving its authors any power or wins or ability to execute on their agenda is disastrous for nearly everyone, including tech and the middle class. The only people that its illegal acts are good for is a tiny minority of crooks, fascists, and oligarchs.
Given the firehose of illegal stuff they are doing that is impossible to push back on, it is utterly imperative to push back on every little thing that is possible to push back on, and to hold consent hostage to an end to the former.
You're letting them burn your house down because they promised you a bottle of whiskey.
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But you haven't gained... you could be taxed over and over again, and if the stick drops or hits zero then what? It's all on paper and not "real".
> But you haven't gained... Yes, you have. You have an asset of greater value which you can leverage in a number of ways without liquidating it and "realizing" the gains. That's a real gain, with real value. > you could be taxed over and over again Only if you make new unrealized gains. > and if the stick drops or hits zero then what? Then you have a negative unrealized gain, or, equivalently, an unrealized loss. If…
Most laypeople grossly conflate notional and real value. Taxing notional value massively inflates the adverse impact of tax incidence on expected returns relative to people’s casual intuition based on the relative tax rates for realized and unrealized gains.
A tax on unrealized gains is in effect a way of laundering a steep tax rate so that it looks “small” and therefore reasonable to the unsophisticated.
Worth noting: the version of the Big Beautiful Bill passed by the House ends this particular change, starting in tax year 2025. We'll have to see if this provision makes it through the Senate, and in what form.
The destructive power of the Section 174 change cannot be overstated. It has been reported on a lot, but its harms are generally poorly articulated. I do not like many things in BBB, but I am glad to know there is at least something in there that I can be glad for.
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The problem here is that all software development (excepting that done for hire) is classified as R&D. The software developer working on your Wordpress or Magento site (and arguably the accountant building a spreadsheet, to take the statute at face value) isn't an operational expense, they're now an R&D expense that has to be amortized and can't be taken as an expense against revenue. Previously, this was an optional…
> Early-tags startups into cash bond fires As a practical measure it’s really not. The transition is difficult for existing companies, but a future startup is going to be minimally impacted. Year 0 you’re unlikely to have any profits, future years you have multiple years of R&D to offset with. But let’s assume the worst case. Taxes are 21% of profits and at minimum deduction 20% of R&D so the theoretical maximum dist…
You're only unlikely to have no profits if you have no revenue. And you only get to break even 5 years in, which most startups will never reach.
In practice what is likely going to happen is that we'll see more and more startups deliberately avoid revenue in the early days. More and more free tiers followed by rug pulls when revenue actually becomes an asset rather than a liability.
There is no unplanned economy, only different outcomes from better or worse plans. And I'm having a hard time imagining a worse plan than one that intentionally disincentivizes businesses from adopting a sustainable business model early in their lifetime.