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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

#771

Post by Dylan16807 »

sarchertech wrote: post #624
Dylan16807 wrote: post #525

Earlier quoted context omitted.

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 b…

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

It lets you get loans based on 100% of your pre-gain money with zero taxes paid, which I think is too generous. You wouldn't do that if it was actually all your money. It mostly fits the idea of only taxing the "used" money, but not entirely, and I don't really favor that idea in the first place.

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

15% tax is pretty big. And if we put capital gains back in line with income tax it would be double that.

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

If the unsecured loans only go up to 90% of the post-gain asset value, that's not much riskier, is it?

> 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.

Yeah okay we could stop unsecured loans from happening. That seems awkward though.

> 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.

I don't like this one at all.

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

#772

Post by xhkkffbf »

zdragnar wrote: post #165
xhkkffbf wrote: post #151

Earlier quoted context omitted.

What if some executive tweaks a "no code" tool? Technically, the name says that there's no coding involved.

Presumably that still counts as "developing software"- the regulation doesn't mention "coding" at all.

A fair point.

Or is it "using software"?

A person typing an essay with a word processor in doing more work than many of the users tweaking no code software.

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

#773

Post by drgo »

leereeves wrote: post #753
toofy wrote: post #498

Earlier quoted context omitted.

for anyone curious, this wasn’t specifically trump, but it was indeed a republican congress bill. texas republican was the initial sponsor and then republicans lined up to cosponsor. this was done to fuel their tax cuts to a small group of a certain people. you can see all of the sponsors here: https://www.congress.gov/bill/115th-congress/house-bill/1/co...

It was indeed passed by Republicans in Congress (with Democrats mostly voting Nay), but it was signed by Obama (12/22/2017). Why did he sign it?

Thanks Obama! singing terrible bills even after he left office.

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

#774

Post by anticensor »

sitkack wrote: post #296
creer wrote: post #204

Earlier quoted context omitted.

How about the salaries of employees being paid to create a new line of business? Say, the business runs restaurants and you decide to break into the tax software business. Can you avoid taxes on restaurant profits right now in order to build your new unrelated venture. ISFICR, tax law allowed outright deducting of costs of the current business, but not costs for starting a new one. Not deducting the new costs against…

> restaurant profits lol Discouraging starting new businesses would be unconstitutional. All freedom in the US is derived from being able to participate in controlling capital.

They may want to encourage certain kinds of business over others.

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

#775

Post by iancmceachern »

thegrimmest wrote: post #748
iancmceachern wrote: post #743

Earlier quoted context omitted.

I get it, I'm not trying to chat about that. I am saying if you can convince enough other people that this makes sense you can effect change. And im wishing you good luck with that.

> No, education is not brainwashing. I’m directly responding to your point. Ideological education is brainwashing. In fact “brainwashing” is usually just another way of saying “an ideological education I disagree with”, also known as “indoctrination”.

What is ideological education and why do you think it is all of education?

I'm saying flowers smell good.

You are saying flowers smell bad because of that one flower that smells bad.

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

#776

Post by WisdomTreeDev »

toofy wrote: post #498
mountainriver wrote: post #258

Earlier quoted context omitted.

This is one of the worst things MAGA has done. Tech startups are the source of so much of our wealth, and this makes it very challenging to ever build one. I can’t believe this still exists, and no one has changed it. We truly are governed by morons

for anyone curious, this wasn’t specifically trump, but it was indeed a republican congress bill. texas republican was the initial sponsor and then republicans lined up to cosponsor. this was done to fuel their tax cuts to a small group of a certain people. you can see all of the sponsors here: https://www.congress.gov/bill/115th-congress/house-bill/1/co...

[dead]

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

#777

Post by roflmao123 »

maaaaattttt wrote: post #765
roflmao123 wrote: post #742

Earlier quoted context omitted.

Still plenty left to pay their business taxes.

And if it’s employees? Do you ask them to contribute to the company’s taxes as well? After they’ve paid their own?

You pay them less money so you can afford your taxes, like literally everyone else.

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

#779

Post by thegrimmest »

iancmceachern wrote: post #775
thegrimmest wrote: post #748

Earlier quoted context omitted.

> No, education is not brainwashing. I’m directly responding to your point. Ideological education is brainwashing. In fact “brainwashing” is usually just another way of saying “an ideological education I disagree with”, also known as “indoctrination”.

What is ideological education and why do you think it is all of education? I'm saying flowers smell good. You are saying flowers smell bad because of that one flower that smells bad.

Any conclusion that cannot be arrived at cannot be arrived at by a scientific process is inherently ideological. You’re saying flowers smell good. I say they smell bad. Neither of us is any more right than the other, since these are entirely subjective takes. The closest you could get is that flowers might smell good to x% of the population, which is what schools should teach. Not that they smell good or bad.

The distinction is small but important, since the latter conclusion doesn’t make any judgements about people with a legitimate minority opinion.

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

#780

Post by demosthanos »

lesuorac wrote: post #725
anp wrote: post #254

Earlier quoted context omitted.

The root of this subthread makes it clear why the current provisions to force software expenses to be amortized are different than other kinds of R&D.

The article makes it clear it's a subsidy. > Originally enacted in 1954, Sec. 174 has historically allowed taxpayers to deduct SRE expenditures in the year incurred. Its original aim was to level the playing field for small businesses, those without dedicated research teams, that may be unable to deduct product development expenses under Sec. 162 because the costs were not ordinary and necessary expenses paid or incu…

Just to be clear, "special group" here means "any small business that wants to do any R&D of any kind", right? Because software was not a special group before, all R&D was opt-in for this kind of accounting.

Now, after this change, software is a special group singled out, a deviation in the tax code specially carved out for us to make our field specifically the exceptional one with no wiggle room. No other type of development is named in Section 174 to explicitly require companies to amortize.

So who is that subsidizing now?

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