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OBBB signed: Reinstates immediate expensing for U.S.-based R&D

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Re: OBBB signed: Reinstates immediate expensing for U.S.-based R&D

#121

Post by anovikov »

ttul wrote: post #84

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…

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?

Re: OBBB signed: Reinstates immediate expensing for U.S.-based R&D

#122

Post by benreesman »

doctorpangloss wrote: post #119
benreesman wrote: post #111

Earlier quoted context omitted.

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.

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.

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.

Re: OBBB signed: Reinstates immediate expensing for U.S.-based R&D

#124

Post by nickff »

ttul wrote: post #84

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…

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.

Re: OBBB signed: Reinstates immediate expensing for U.S.-based R&D

#125

Post by nandomrumber »

raverbashing wrote: post #114
nandomrumber wrote: post #106

Earlier quoted context omitted.

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 tho…

Cool, cut all the oil subsidies, and road subsidies, and let the market decide

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.

Re: OBBB signed: Reinstates immediate expensing for U.S.-based R&D

#126

Post by wraptile »

jimmydorry wrote: post #107
0xbadcafebee wrote: post #91

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…

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…

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...

Re: OBBB signed: Reinstates immediate expensing for U.S.-based R&D

#127

Post by nickff »

anovikov wrote: post #121
ttul wrote: post #84

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…

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, i…

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.

Re: OBBB signed: Reinstates immediate expensing for U.S.-based R&D

#128

Post by mjoin »

n_u wrote: post #8

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 ab…

That's nuts

Re: OBBB signed: Reinstates immediate expensing for U.S.-based R&D

#129

Post by throwawaysleep »

anovikov wrote: post #121
ttul wrote: post #84

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…

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, i…

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

Re: OBBB signed: Reinstates immediate expensing for U.S.-based R&D

#130

Post by akmarinov »

seattle_spring wrote: post #83
mlinhares wrote: post #64

Earlier quoted context omitted.

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.

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.

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.

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