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The time bomb in the tax code that's fueling mass tech layoffs

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Re: The time bomb in the tax code that's fueling mass tech layoffs

#341

Post by Dylan16807 »

dragonwriter wrote: post #312
_dark_matter_ wrote: post #295

Earlier quoted context omitted.

That's still not true. As long as a group within "everyone" (or multiple groups) decide that their support is required to pass the bill, they can suddenly demand concessions and the bill now gets complicated with good and bad.

> As long as a group within "everyone" (or multiple groups) decide that their support is required to pass the bill, they can suddenly demand concessions Well, yes, but then everyone doesn't really want it, do they? Someone wants something else, and wants that something else enough that it is worth jeopardizing the supposedly universal goal for it.

Yes they do want it.

If you've ever negotiated, I bet you've done the same thing of jeopardizing something you want in order to get something else you want. If you never do that, you'll make a lot of deals where you're riding the edge of just barely acceptable and the other person is taking advantage of you. But in this case, with a standalone law, doing it gets pretty rude and we'd be better off if nobody did it.

Re: The time bomb in the tax code that's fueling mass tech layoffs

#342

Post by closeparen »

e40 wrote: post #227

It's not only that, ZIRP[1] contributed. Also, the 10+ years before the layoffs started tech companies were on a hiring binge. Much of big tech was hiring to keep people off the market and off their competitors payrolls (this is from friends of friends in FANG HR departments). These were high paying jobs, too. [1] https://news.ycombinator.com/item?id=44141650

It should be illegal to post graphs that start in 2020 when talking about tech hiring trends. The relevant comparison is probably the 2014-2019 era, not the peak pandemic craziness.

Re: The time bomb in the tax code that's fueling mass tech layoffs

#343

Post by pclmulqdq »

youngtaff wrote: post #166
demosthanos wrote: post #96

There are some misunderstandings in the comments that seem to stem from not having read the section, so I thought it was worth referencing the actual text [0]. It's quite short and easy to read. The most important bits: * Subsection (a) requires amortizing "Specified research or experimental expenditures" over 5 years (paragraph (2)) instead of deducting them (paragraph (1)) * Paragraph (c)(3) is a Special Rule that…

I worked for a UK company that amortised it’s development costs… it led to the false belief that the company was profitable when it really wasn’t

"Profitable" in an accounting sense has nothing to do with your cash position. This is something that people in tech don't really seem to understand.

Re: The time bomb in the tax code that's fueling mass tech layoffs

#344

Post by offnominal »

kevinventullo wrote: post #325
offnominal wrote: post #201

Earlier quoted context omitted.

Salaries in general (not just of software developers) are tax deductible in many countries. This is desirable because we do not want companies to be paying taxes on revenue.

I dunno, I pay taxes on revenue.

Are you a company? If not, then you probably don't have revenue -- you have income.

Re: The time bomb in the tax code that's fueling mass tech layoffs

#345

Post by vlovich123 »

trhway wrote: post #202
demosthanos wrote: post #96

There are some misunderstandings in the comments that seem to stem from not having read the section, so I thought it was worth referencing the actual text [0]. It's quite short and easy to read. The most important bits: * Subsection (a) requires amortizing "Specified research or experimental expenditures" over 5 years (paragraph (2)) instead of deducting them (paragraph (1)) * Paragraph (c)(3) is a Special Rule that…

What i like about US is that compare to other countries (like for example Russia where i'm originally from) there is almost no lying and cheating here. Instead there is a respect of the law and an army of talented creative accountants and lawyers. Remember that stale "multi-used" sandwich served with the drink which by virtue of its existence converted drinking establishment into a food serving restaurant? Not being…

I'm not sure I buy into this. Sure, compared with Russia it's probably a lot less, at least in terms of being something everyday people engage in. But in terms of comparing with countries like Germany or Sweden I don't know.

Here's some food for thought:

* Global financial crises: Banks were paying (bribing) ratings agencies to rate junk bonds AAA.

* Savings & loan crisis: widespread fraud & insider abuse.

* Bernie Madoff: Ran the largest Ponzi scheme ever, with an estimated fraud total of $65B raking in $17.5B in invested cash.

* Enron: straight up accounting fraud sprinkled with intentionally causing brownouts in California to pad their pockets with a side bonus of making Gov Davis unpopular & get him recalled (Enron was closely aligned with the Bush administration).

* Nixon straight up using psy-ops against Democrats & finally trying to burgal the DNC offices.

In terms of stats, the FBI does a few hundred bribery and corruption cases annually. Are they good at catching white collar crime? Well such crimes regularly take more than 5 years to investigate.

And hell, some things that are basically lying and cheating are straight up legal. Usury is legal with minimal to no regulation of payday loans. Pyramid schemes are legal as long as you call it multi-level marketing.

The list goes on and on.

Re: The time bomb in the tax code that's fueling mass tech layoffs

#346

Post by droopyEyelids »

demosthanos wrote: post #96

There are some misunderstandings in the comments that seem to stem from not having read the section, so I thought it was worth referencing the actual text [0]. It's quite short and easy to read. The most important bits: * Subsection (a) requires amortizing "Specified research or experimental expenditures" over 5 years (paragraph (2)) instead of deducting them (paragraph (1)) * Paragraph (c)(3) is a Special Rule that…

Who sponsored this text in the bill?

Re: The time bomb in the tax code that's fueling mass tech layoffs

#347

Post by Dylan16807 »

rurp wrote: post #275
sherburt3 wrote: post #223

Earlier quoted context omitted.

Removing it would make Congress less powerful, and we can't have that now can we.

If anything it has been the opposite problem, with modern congresses having been more than happy to delegate away their powers. You might have heard the recent tariff news for example.

Modern being what? The main tariff laws in question happened 50+ years ago. The republicans in congress have been going out of their way to not interfere, but that's significantly different from creating new delegations.

Re: The time bomb in the tax code that's fueling mass tech layoffs

#348

Post by kenjackson »

candiddevmike wrote: post #219
tomrod wrote: post #194

Earlier quoted context omitted.

They tried. They had Senate spoilers.

As a progressive, it seems like the Democrats always have Senate spoilers...

But this is the type of thing that progressives would like support (tax big corporate America).

Re: The time bomb in the tax code that's fueling mass tech layoffs

#349

Post by kenjackson »

_heimdall wrote: post #329
radley wrote: post #132

Earlier quoted context omitted.

It's not really targeted at tech, insomuch as at Democrats. Everyone assumed it was a traditional accounting hack. But given the timing and the reinitialization, it's clearly political, not economic. The code is a strategic time-bomb designed to cause a high-profile economic downturn during a presidential election cycle, specifically when the following president is a Democrat and Republicans have a house majority. It…

If this was passed in 2017 to go into effect during the next presidential term, wouldn't that only work as a time bomb for Biden's presidency if Trump didn't expect to win a second consecutive term? Given the history of prior presidents winning 2 consecutive terms, it seems like Trump could have reasonably expected a 2022/2023 tax change to be his problem.

No. It’s after re-election. Bad news late in your second term isn’t that big of a deal, unless you care about legacy.

Re: The time bomb in the tax code that's fueling mass tech layoffs

#350

Post by jandrewrogers »

dragonwriter wrote: post #321
jandrewrogers wrote: post #309

Earlier quoted context omitted.

Gains are frequently not realizable as a matter of law and/or contract, for good reason. Additionally, there are many assets with notional value conditional on not liquidating them, which makes them de facto not realizable. And of course, the majority of assets have no liquidity, so realizability is a practical fiction. The unrealized values are a fiction. There is significant value in treating values as unknowable w…

> The unrealized values are a fiction. Then instead of taxing the gains, you'd accept the government nationalizing the assets by eminent domain and paying fair compensation that was significantly less than the "fictional" unrealized value? Or if someone unlawfully deprived you of the asset, you'd accept as restitution or seek as civil damages for the loss something significantly less than the "fictional" value? Or, w…

You are basically making my case for me. It is widely recognized that replacement value differs materially from notional value. In such cases you may be required to pay much more than notional value because you have to pay for liquidity costs that only exist when transactions are forced to occur. The act of transacting can intrinsically change the asset value, sometimes by a large factor.

Are you oblivious to the extensive litigation that occurs in cases like eminent domain because there are substantial differences of opinion on even the notional value, never mind the realizable value?

Notional valuations are fiction, everywhere and at all times. Treating them as some kind of objective reality is just enabling a lot of abuse and motivated reasoning.

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