Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

qz.com

Post reply on HN
Print view View original

801–810 of 991 posts

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

#801

Post by deadbabe »

demosthanos wrote: post #770
Retric wrote: post #755

Earlier quoted context omitted.

You’re likely overreacting. It makes software temporarily 16.7% more expensive in year one if you’re operating a profitable company, but you do eventually get to deduct that over time. Pay 8% on a 4 year loan and that drops to ~4%.

Eventually, as long as you survive that long. As has been said repeatedly in this thread, this change is purely a boon for existing big tech companies that now have even less to worry about from startups. It takes a startup 5 years before they'll be playing on an even field with big tech. > if you’re operating a profitable company You keep saying this across this thread, and keep ignoring that Section 174 has now red…

Wow all this time I thought the key to a successful startup was to just be better and more disruptive than the competition but really I guess it all comes down to being more tax efficient.

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

#802

Post by roflmao123 »

dyauspitr wrote: post #798
roflmao123 wrote: post #742

Earlier quoted context omitted.

Still plenty left to pay their business taxes.

So on the $200,000 it’s reasonable to you that they have to pay $120,000 ($80k income+$40k business) in taxes?

Two people earning $100k each would pay $28k income taxes each, totaling $56k. Where did this $80k come from?

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

#803

Post by jeffybefffy519 »

jyounker wrote: post #791
drgo wrote: post #773

Earlier quoted context omitted.

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

Pay attention to the dates. It was signed on 12/22/2017. Obama's last day in office was 01/20/2017. That means it was signed by Trump.

Democracy is broken… its so hard to tell who did this.

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

#804

Post by spwa4 »

roflmao123 wrote: post #800
spwa4 wrote: post #793

Earlier quoted context omitted.

... or you never have the startup, and just have 2 people unemployed and no produce nothing of use to anyone. Which is what's happening.

If you can't afford your taxes your business model was flawed to begin with. In the above example there is more than enough money for it to still be worth doing.

Well, I said elsewhere, this effectively means (heavily) taxing anyone who's doing something new (meaning adding additional taxes on top of income tax). Essentially all of Europe does this, and people here often decry how they totally lack innovation across the entire continent.

I don't think these two are unrelated.

I also don't understand the objection. It's not like anyone's getting away from taxes due to this rule. This is about a temporary exemption from company income tax IF AND ONLY IF companies have someone pay income tax on that money (and only up to the point where that keeps makes sense). This "exemption" lets you not add 15%-20% tax on top of 40-55% income tax just to try a new business as a company.

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

#805

Post by ghiculescu »

jjmarr wrote: post #726
ghiculescu wrote: post #337

The most fascinating question is not "How did a single line in the tax code help trigger a tsunami of mass layoffs?" but how did a single line in the US tax code help trigger a tsunami of mass layoffs in other countries?

There's a 15-year amortization period if a US company hires an offshore developer. It's only a 5-year period if the developer is American.

Did you know that other countries have software companies too?

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

#806

Post by iancmceachern »

thegrimmest wrote: post #779
iancmceachern wrote: post #775

Earlier quoted context omitted.

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 dis…

What about art,Mozart, the Dead shakespeare, south park and everything in-between? Those aren't science, but are some of the most vital components of education.

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

#807

Post by dataflow »

CBLT wrote: post #747
dataflow wrote: post #731

Earlier quoted context omitted.

> The rule as written means contractors who write Windows drivers could deduct their expenses (as they would have no residual rights to a closed-source work product), but contractors who write Linux drivers may not (as they would have some rights to open-source Linux drivers). Is it just me or are you conflating two orthogonal things? An open-source Windows driver would have the same issue, no? And a closed-source pr…

You're right, the law text doesn't specifically call out the Windows operating system or the Linux operating system. The example you gave of Open Source Windows drivers is valid. The Grandparent's point about that "it double-dings open source developers" is still correct and poignant even with this clarification.

> The Grandparent's point about that "it double-dings open source developers" is still correct and poignant even with this clarification.

I feel like I'm missing what subset of people this is, exactly. We're talking about businesses here that would struggle with these tax rules. Which I guess is, mainly, contractors or startups. How common is it for such businesses to release their software as open-source, vs. as closed-source? I would've (naively) expected most paid OSS developers to be funded by large organizations/businesses that have plenty of money to fund them, not small businesses/contractors that would be severely impacted by this law. Is this actually a large set of people?

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

#808

Post by thegrimmest »

iancmceachern wrote: post #806
thegrimmest wrote: post #779

Earlier quoted context omitted.

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 dis…

What about art,Mozart, the Dead shakespeare, south park and everything in-between? Those aren't science, but are some of the most vital components of education.

Education describing what cultural artifacts exist and how to produce them isn’t ideology. These are objective areas of study. Though lots of cultural education is ethnocentric, where minority cultures are less represented, making the education less well rounded.

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

#809

Post by madmask »

StackRanker3000 wrote: post #604
rurban wrote: post #578

Earlier quoted context omitted.

The net effect of this change can only be more tax income which benefits the society. Tax the rich

Not if it limits growth to a commensurate extent (or more) A big part of why America is as rich as it is in 2025 is Big Tech. If laws and regulations had prevented that industry from taking off by stifling the now-giants back when they were starting up, you may have been more equal today (you’d have fewer billionaires), but there would also have been a lot less wealth to go around, even for the working class

Yes. See Europe

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

#810

Post by sumanthvepa »

Here's a neat trick: Section 174 US tax code changes make purchasing a SaaS license a better deal than building in house. So do the R&D in a jurisdiction like India where the you can still deduct 100% of R&D under section 35. And purchase the SaaS in the US. (You have to be a non-US company for this to work and there are more details. Talk to your accountant.) Edit: fixed typos
Post reply on HN