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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

#671

Post by throwaway173738 »

beardbandit wrote: post #311
yieldcrv wrote: post #270

Earlier quoted context omitted.

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…

You don't want to live in a society where an increasingly large percentage of the population have nothing to lose. Regardless of whether it benefits our industry or socioeconomic status, it'd be incredibly shortsighted to just do all of that at the expense of the lower classes.

Also someday you might find yourself needing things like medicaid. I once met a former SE who was on disability because he lost his sight. Protecting those things for others also protects them for yourself.

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

#672

Post by netcan »

fauigerzigerk wrote: post #605
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…

That was my first thought as well, but on second thought I can see how this might cause problems: For established profitable software companies there was a cliff edge in 2022 when this change kicked in. Staff costs for previous years had already been fully expensed while only 20% of the current year's costs could be deducted. Second, any sudden increase in research expenditures is now discouraged. This could make com…

> For unprofitable startups it could cause issues during a phase of very high revenue growth.

So I guess my most question is "how this work irl?"

Say a new startup raises money and hires 20 people. Pays $5m in salaries, office space and such. All 20 people are developing a software product. Are 100% of this startups expenses amorotized?

Then they sell the product. They receive $2m in revenue. What does the P&L look like.

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

#673

Post by hollerith »

_heimdall wrote: post #668
rayiner wrote: post #653

Earlier quoted context omitted.

> That self-selection left Republicans not a competitive amount of credibility or voter pool behind to work with. So by your logic New York is a better governed state than Florida? Net internal migration would seem to disagree.

Is it your opinion that the only factor relevant for those deciding what state to move to is quality of government? I'm surprised that things like the job market wouldn't come into play, for example.

The two are related: bad governmental policy can make employers leave a state and make employers that choose to stay less prosperous.

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

#674

Post by 9x39 »

rini17 wrote: post #585
9x39 wrote: post #487

Earlier quoted context omitted.

The rule of law gets down to nitty-gritty levels, too, not just a reality show at the highest altitudes: trust the police don't extort you, the ability to gain relief in court (small claims or civil), trust things you build won't be looted overnight, trust in your neighborhood to walk at night or leave something unlocked, trust in your bank to wire things, trust in your title companies, trust in your package deliveri…

"Could be much worse" is a platitude not an argument. "It is improving" might be, if it were true.

I often couch my arguments in soft language like a conversation would be in order to have a discussion. The idea that the US is miles behind developed nations is nonsense.

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

#675

Post by TheTaytay »

ec109685 wrote: post #526
TheTaytay wrote: post #37

Earlier quoted context omitted.

My company was affected. The amount of money paid in taxes more than quadrupled from one year to the next. It hurt small businesses that were slightly profitable. No one else. VC shops aren’t profitable anyway, so no taxes to pay. Microsoft took a 4 or 5 billion dollar write off, but they can literally write a 5 billion dollar check. The issue is that the IRS wants you to pay them today on profits and cash that liter…

Yes, but you are still talking about a loan. That 1M in write offs are guaranteed to come over a five year period.

From the horror stories I read from other founders, the bank wouldn’t loan on those numbers.

When we asked our accountants what they were seeing from other companies, the answer was “mortgage their house.” That assumes they had enough equity to mortgage.

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

#676

Post by riehwvfbk »

shigawire wrote: post #569
riehwvfbk wrote: post #513

Earlier quoted context omitted.

A government that runs the richest city in the country (SF trades this spot with NY every few years) and makes it look the way it does is the definition of dysfunction. And Detroit... well, I guess now that they've bulldozed all the abandoned buildings it looks less like a post apocalyptic hellscape and more just abandoned. An improvement I suppose.

You are all over this thread treating HN like reddit or twitter. Please go.

[flagged]

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

#677

Post by hiatus »

jashmatthews wrote: post #664
hiatus wrote: post #627

Earlier quoted context omitted.

> 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?

The USA hasn’t managed to completely impose their idea of intellectual property on everyone yet. Some countries you can’t sign away authorship even if you can commercial rights.

Parent objected to:

> 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.

Does authorship confer usage rights?

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

#678

Post by anticensor »

svara wrote: post #105
mppm wrote: post #71

Earlier quoted context omitted.

Elsewhere in the world (under IFRS accounting rules) capitalization of R&D costs has been a firm requirement for a while. The US has been somewhat unique in allowing them to be expensed instead, until recently.

Taxes are calculated according to tax accounting rules, not IFRS, though? I know of at least two Western European countries where you don't have to do that. Don't worry, we pay enough taxes either way ;)

Some countries have uniform accounting where the tax accounting rules closely follow IFRS.

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

#679

Post by achenatx »

If your payroll ends up being about the same, after 5 years it all evens out in the sense that you will be expensing 100% of your payroll each year (but the expensing will be 20% from each of the prior 5 years).

If your payroll is quickly growing You experience the problem on all payroll growth.

If your payroll is decreasing, you get a tax benefit. Your outgoing cash is less, but you are getting deductions from prior year expenses.

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

#680

Post by autobodie »

fortenforge wrote: post #641
runako wrote: post #303

Earlier quoted context omitted.

Just last year, Congress snapped to attention and wrote and quickly passed a bill to ban the eminent national security threat of a video-sharing app. That bill doesn't do anything else. Just a reminder that Congress, even now, can rapidly act on a laser focus when it is sufficiently motivated.

Perhaps not the best example to choose given that the president managed to fully ignore that law. Tik-Tok remains unbanned to this day despite there being no sale.

It was a perfectly fine example. Nothing in your comment has any relevance to what it's an example of.
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