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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

#201

Post by forty »

eric-burel wrote: post #176
forty wrote: post #155

Earlier quoted context omitted.

"There are abuses" is really an understatement. "It's mostly abuse and there might be some legitimate beneficiaries" would be more correct.

It's hackernews, not Elon Musk's X or the French parliament, please bring sources and precise details.

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.

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

#202

Post by akmarinov »

coffeebeqn wrote: post #164
akmarinov wrote: post #130

Earlier quoted context omitted.

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.

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. E…

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.

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

#203

Post by g0db1t »

bravesoul2 wrote: post #200
me551ah wrote: post #134

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 50–7…

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 goo…

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

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

#204

Post by tossandthrow »

tomrod wrote: post #14

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.

> 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.

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

#205

Post by AnthonyMouse »

cheema33 wrote: post #150
sp527 wrote: post #104

Earlier quoted context omitted.

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.

> 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.

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.

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

#206

Post by empathy_m »

phtrivier wrote: post #173

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 bu…

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.)

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

#207

Post by klabb3 »

ozgrakkurt wrote: post #157
me551ah wrote: post #134

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 50–7…

It is delusional to think you get same quality work for 70% less price.

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.

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

#208

Post by bravesoul2 »

g0db1t wrote: post #203
bravesoul2 wrote: post #200

Earlier quoted context omitted.

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 goo…

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

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.

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

#209

Post by g0db1t »

fnordpiglet wrote: post #189
__loam wrote: post #145

Earlier quoted context omitted.

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.

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…

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