The time bomb in the tax code that's fueling mass tech layoffs • Hacker News Board

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

#621

Post by xyzzyz » Sat, Jun 07, 2025, 12:57 PM UTC

paulryanrogers wrote: post #616

Brybry wrote: post #542

Earlier quoted context omitted.

Gerrymandering can affect voter sentiment and trigger polling location changes during redistricting, both of which can affect voter turnout[1][2][3] (though the research doesn't seem conclusive on the effect). And thinking about it more, though I haven't seen if there are studies on it: there are probably manpower/fundraising effects from gerrymandering. If you're able to protect your political power in one area that…

> On a percentage basis, over three times as many districts were competitive in states where independent commissions drew maps as in states where Republicans drew maps. https://www.brennancenter.org/our-work/analysis-opinion/how-...

That’s just confusing cause and effect. If your seats are safe, you have no reason to agree to forming an independent commission. The same is true in both heavily blue and heavily red states. Are districts more competitive in states where Democrats draw maps? I don’t think so.

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

#622

Post by mrweasel » Sat, Jun 07, 2025, 12:59 PM UTC

calderwoodra wrote: post #599

netcan wrote: post #572

Earlier quoted context omitted.

What are the implications of this. As I understand accounting, this means that reported profits would be higher, and therefore incur more corporate income tax liability. Cash flow isn't effected besides tax. A startup isn't likely to be making a profit yet, under either accounting rule. Is there a benefit to reporting a larger loss? My first thought is that this effects Google and suchlike, not startups. But... assum…

I'm not an accountant, but as I understand it, you don't pay taxes on profits, but on revenue. So previously, some 20% of all revenue would be owned as corporate income tax, and startups would deduct it all as they're spending much more on R&D than they owe in corporate income tax. But with this tax change, the deduction would be much lower (80% lower IIUC).

If companies paid tax on revenue the US budget would be perfectly fine.

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

#623

Post by kvakerok » Sat, Jun 07, 2025, 1:07 PM UTC

And there I was wondering why R&D was getting moved to Canada.

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

#624

Post by sarchertech » Sat, Jun 07, 2025, 1:10 PM UTC

Dylan16807 wrote: post #525

sarchertech wrote: post #434

Earlier quoted context omitted.

Have you taken out a secured loan in the last year over x amount? Take the value of the asset assessed by the bank and the price paid for the asset to find the total value that is unrealized gain. Divide that by the total value to get percent of collateral that is unrealized gain. Multiply that by the loan value. Then multiply that by the tax percentage. All you need is for banks to report secured loans to the IRS an…

Secured loans of that form are easy, sure. But if those skyrocket in price from tax, they'll be more subtle about convincing banks they're good for the money and pay a slightly higher rate for unsecured loans. Or maybe they'll just treat the asset securing the loan as having the pre-gains price. Get the bank to agree it's worth at least what you paid, with no further analysis. If you try to plug those loopholes you l…

>treat the asset securing the loan as having the pre-gains price

That’s no different than if the asset had no unrealized gain at all.

>they’ll be more subtle

It only takes a small rise in interest rates before it’s cheaper to pay the tax—assuming the tax isn’t outrageous.

Unsecured are much riskier because of the way unsecured creditors are treated in bankruptcy, so they already have higher interest rates.

It would be very easy to tweak bankruptcy laws to make unsecured loans over a certain amount a bit riskier to increase the delta even more.

We also already have regulations governing how banks assess creditworthiness, and the percent of their capital they can lend unsecured based on risk. As well as the amount of unsecured loans they can make to signal individual. If necessary tweak those values.

Another easy way is to add a surcharge to large unsecured loans where the loan amount exceeds the taxpayer’s assets based on acquisition price by some large margin.

None of those impact implicitly agreeing to the valuation and they are all pretty easy to do.

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

#625

Post by _heimdall » Sat, Jun 07, 2025, 1:11 PM UTC

Braxton1980 wrote: post #457

_heimdall wrote: post #376

Earlier quoted context omitted.

But what would trump have done if he retained the presidency and lost congress? That's also been pretty common over the last few decades if I'm mistaken, a president with one or both sides of Congress is reelected but Congress flips to the opposition party.

He would do nothing because his supporters believe misinformation and worship him. Prices haven't gone down at all nor will bringing manufacturing to the US do this (likely causing them to go up) but his approval rating is 50%

> He would do nothing because his supporters believe misinformation and worship him.

Interesting, that hasn't been my experience.

I live in a very red part of the country and most people I know are Trump supporters, including some family members have been very MAGA since 2016.

I've been hearing more and more complaints over missed promises: no Epstein files, raising budgets, RFK is starting to water down his promises, no end to the Ukraine or Gaza wars, etc.

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

#626

Post by dwedge » Sat, Jun 07, 2025, 1:14 PM UTC

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…

It might be "quite short" but it's full of click bait style text. This tax law will change everything, but we won't say what it is for 4 or 5 paragraphs, nor what changed for another 3

Edit : sorry I just realised you meant the tax law is short. The article itself is very annoyingly written

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

#627

Post by hiatus » Sat, Jun 07, 2025, 1:18 PM UTC

anticensor wrote: post #618

bunnie wrote: post #566

Earlier quoted context omitted.

Work-for-hire open source contributions often already bear a copyright holder of the entity paying for the work. The problem isn't who is the copyright holder. The problem is that the license assigned says that anyone is free to use the code. Anyone is a set of people that includes the contributor, which then triggers the interpretation that the research is incrementally in the contributor's benefit and thus disquali…

> a source control system that hides the source files from the contributor's view of the repository. How would that work? > You'd need a custom license where everyone in the world could use the results except for the contributor That one is incompatible with copyright laws in many countries outside USA.

> That one is incompatible with copyright laws in many countries outside USA.

How so? You can't sign away your interest in a copywrighted work?

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

#628

Post by dsauerbrun » Sat, Jun 07, 2025, 1:19 PM UTC

kccqzy wrote: post #571

sampton wrote: post #133

Amortization is bad policy when it comes software. Software is inherently high risk. Every piece of software is unique and does not guarantee steady income over 5 years. Most startups won't survive 5 years to fully realize the deductions. This is the end of US software dominance.

Amortization is bad policy, period. If cost is actually incurred, it should be fully deductible immediately. No matter if it's a piece of equipment or software.

i'd disagree heavily with that... let's say you have an expense of an insurance policy that covers you for the next 10 years. You're paying for 10 years of service, that should be amortized over 10 years.

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

#629

Post by nickledave » Sat, Jun 07, 2025, 1:20 PM UTC

I was part of a small R&D company that had a promising product (can't say more, NDA) and we had to shut down because of this. Thankfully the founders were able to get us acqui-hired or I'd be in a much worse position. But that IP is just lost to history AFAIK, in spite of significant investment of US research $.

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

#630

Post by kccqzy » Sat, Jun 07, 2025, 1:20 PM UTC

dsauerbrun wrote: post #628

kccqzy wrote: post #571

Earlier quoted context omitted.

Amortization is bad policy, period. If cost is actually incurred, it should be fully deductible immediately. No matter if it's a piece of equipment or software.

i'd disagree heavily with that... let's say you have an expense of an insurance policy that covers you for the next 10 years. You're paying for 10 years of service, that should be amortized over 10 years.

Yeah but if the insurance policy requires me to pay upfront, I'm out the entire ten years' worth of insurance premium. Amortization forces it to be divorced from actual cash flow.