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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

#911

Earlier quoted context omitted.

Back during the communist vs capitalism and free market era Politicians were patriotic like you hope them now to be, they were worried about the rise of communism and were extremely attentive and focused and unified to making sure capitalism and free market works for the masses, that everyday westerners are enriched and have better social and health outcomes than their communist counterparts. It did succeed to the po…

> They gutted our manufacturing and industries, outsourced all our jobs with no better ones for those without jobs to replace them. We have been very close to record-low unemployment last year and the real median household income is higher than ever

10% of the population drives more than the bottom 90% of the population in consumer demand and purchase now, you think that’s normal ? This was never a thing until very recently, america’s wealth has skyrocketed one can argue the middle class is shrinking and certainly didnt gain their share of this wealth growth.

Go look at the debt levels of an average american, and realise that greater than a majority of americans dont even have $500 saved for emergencies in their account.

The unemployment rate is a sham that doesnt even count underemployment and it cleverly masks and removes people who were looking for a job, gave up hope and now are no longer looking for a job.

Adjust that medium household income statistics for purchasing power in usa across last 40 yrs, you’ll realise wages are same or have declined in real value term’s when the total wealth in country has skyrocketed.

Look there is nothing wrong with others enjoying their life but if the majority doesnt feel like they have safe equal and sustainable life sooner or later they give up on the existing system, at that point a country risks a lot of instability.

Unemployment rate has been cleverly gamed and distorted as a statistics in every major country from china to europe to usa, you name it.

Look at the median household income in terms of debt servicing, mortgage servicing, final disposable income, net wealth/assets of average income

If you make the same or lets even say a bit more money/income than mom and pop’s gen but you pay 50% of your income in housing rent or mortgage in major cities compared to only 10% back in previous gen’s times how is that better ?

And college fees have skyrocketed by 6-7x in real money terms while wages have not, thats an expensive thing too for a lot of kids.

Pensions are not a thing.

Im not saying america is completely broken, america is awesome and is equipped to do much better than most developed economies and especially compared to europe in future.

But we must admit there are problems that are fomenting troubles that can end up blowing over if we as a society dont start rapidly fixing it.

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

#912

Earlier quoted context omitted.

They count as costs, but towards a capital expense. The expectation is that that expenditure resulted in the creation of a valuable asset (and not one which was sold for $200,000). Revenue: $200,000 Expenses: -$200,000 Assets: $200,000 Net income: $200,000 You’re allowed to say ‘ah, but over the year the value of that $200,000 asset actually fell by 1/5’: Asset depreciation: -$40,000 So your net income is now $160,00…

But no matter what you are doing, your not spending 100% of your time building a piece of software. How does it work when a company uses salaried employees to build a structure. Are the salaried employees not deductible at all?

The IRS releases guidance on tax code, and one of the issues with section 174 taking effect in 2022 (and the IRS believing it would be repealed before it went into effect) was that the guidance was released in 2023 under notice 2023-63

https://www.irs.gov/pub/irs-drop/n-23-63.pdf

To answer your question, the following are software development activities that are capitalizable (and instead of quoting the notice itself, I’m quoting from a better written blog post by accountants:

https://www.cohnreznick.com/insights/additional-guidance-irs...

> Section 4.03(1) of the Notice clarifies that labor costs – including those for contract employees and independent contractors – related to those who perform, supervise, or directly support SRE activities are considered Section 174 expenditures. All elements of compensation are to be included with the exception of severance, which is excludable and deducted by taxpayers in the period paid or incurred. SRE-related labor costs expenses included in the Notice expenses related to pension costs and stock-based compensation.

Section 4.03(1)(e) provides guidance pertaining to certain costs related to operation and management (i.e., rent, utilities, etc.) activities. Specifically, in addition to items such as rent, utilities, and insurance, expenditures such as taxes (i.e., property), repairs and maintenance, and security are now considered SREs subject to Section 174.

So what software development activities don’t count as “Specified Research Expenditures” (SRE)”?

> Training of employees in the use of the software

>Maintenance activities after the software is placed into service that do not constitute upgrades or enhancements (i.e., corrective maintenance to debug, diagnose, and fix programming errors)

> Data conversion activities (except activities to develop computer software that facilitates access to existing data or data conversion)

> Installation and other activities related to placing the software into service

> Marketing and promotional activities

> Distribution activities

> Customer support

If you’re a startup and you have a software developer doing the above activities as well as SRE work, then in order to expense the SRE parts of their job you either have to estimate (and be able to defend) the estimations, or your employee needs to track their time for each type of activity they do.

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

#913

Earlier quoted context omitted.

The evidence is that independent commissions drawing maps makes for more competitive districts. Which party is most opposed to such commissions? Which party is gleefully dismantling all accountability and oversight positions and departments? Which party is openly inviting corruption and pardoning those they should be prosecuting?

I wonder why one party would be seeking to change a civil service that’s 90% staffed by members of the other party? I guess “democracy” means Democrats running the country no matter who wins the election, right?

First, your stats are wild. Please provide and unbiased citation.

Second, your solution was in place in the 1800s and was referred to as the spoils system. It led to bad outcomes and was rightfully abandoned. Your beef is with the fact that educated people tend to choose policies that you don't like (assuming your 90/10 split, which is still wild). You/the GOP have three options. First is to recognize that the policies pursued do not attract people which education (which I consider a red flag). Second is to re-adopt the spoils system despite it being illegal, and frankly just sort of dumb since when the other side is in power you suffee, but at least then you never need to think deeply about making policy for the whole country instead of a subset of supporters. Third, you/the GOP self-own via tearing up all the intellectual capital and international good will built up over the decades without a replacement, massively reducing American influence on the world in all dimensions.

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

#914

Earlier quoted context omitted.

I wonder why one party would be seeking to change a civil service that’s 90% staffed by members of the other party? I guess “democracy” means Democrats running the country no matter who wins the election, right?

Are most members of the civil service Democrats? This is the first I've heard of this.

OP asserts this unsource. While it does seem to tilt towards Democrats since it is ethics and mission oriented and typically requires a degree, 90/10 sounds wild in my experience.

My prior is based on experience. Most of the civilian govies are centrist, "I just want to grill" types.

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

#915

Earlier quoted context omitted.

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.

A person typing an essay with a word processor is producing an essay. A person using a no-code tool to modify a software process is producing software processes.

The nature of the tweak involved probably determines the classification of the effort, but for tax purposes and R&D expense amortization, it is a percentage of time basis.

If the executive tweaks the code once, the percentage is so small it won't count as far as anyone cares.

If 20% of the executive's time is tweaking the tool, then odds are the company cannot expense 20% of the executive's salary and instead must claim that portion as R&D over five years.

Back before 174, I worked for a company that did claim R&D but only for one of the projects I worked on. As such, I had to be careful filling out my timesheet because they wanted an accurate accounting of what was salary expense and what was R&D.

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

#917

Earlier quoted context omitted.

You have to be fair though, politicians always blame someone else and its usually the last person that was in charge. How often do you hear any one politician claim the glory of a situation that they had nothing to do with? And when was the last time you actually heard a politician own their failing or apologize?

> You have to be fair though, politicians always blame someone else and its usually the last person that was in charge. I don't think this is a reasonable or informed take. It's quite obvious that the tarrif lunacy is single handedly causing an economic downturn. Trump himself has downplayed the relevance of this downturn with inane comments over how tarrifs would also be painful to the US economy. If you see a polit…

My claim wasn't whether trump is responsible, of course his tariffs are having a very real impact. My point was that one should never expect a politician to admit that, at best they dodge claiming responsibility but more often than not they point at someone else, often the last person in office.

If you'd like to say my claim is uninformed that's fine, but I ask again for examples when a politician directly owned their failure or apologized for it.

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

#918
post #758

Earlier quoted context omitted.

Create a shell company with an X$ investment. Have the shell company write code. (Or more risky pay your company to write code as a work for higher.) Devolve the shell contributing its assets to OSS. Take a X$ loss in that year. Argue that it is perfectly legal to the IRS.

I wonder of you could also just pay bounties for specific features to be written for OSS. Or have your shell company operating out of any other country.

Algora.io for OSS bounties!

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

#919
post #914

Earlier quoted context omitted.

Are most members of the civil service Democrats? This is the first I've heard of this.

OP asserts this unsource. While it does seem to tilt towards Democrats since it is ethics and mission oriented and typically requires a degree, 90/10 sounds wild in my experience. My prior is based on experience. Most of the civilian govies are centrist, "I just want to grill" types.

That makes sense to me. This is why I suspected that attempting to claim the election was stolen would be a losing proposition; I was sadly surprised to the contrary.

Elections are run by Republicans as well as Democrats. In fact several of the key locations that Trump claimed were stealing the election from him were basically locations where the Republican party had a lock on the administration of the election. As I remind people often, when they talk about someone stealing the election, that's not a hypothetical "someone," that's Betty three houses down that has the nice flower garden and organizes the bake sale at church every month.

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

#920

Earlier quoted context omitted.

> You have to be fair though, politicians always blame someone else and its usually the last person that was in charge. I don't think this is a reasonable or informed take. It's quite obvious that the tarrif lunacy is single handedly causing an economic downturn. Trump himself has downplayed the relevance of this downturn with inane comments over how tarrifs would also be painful to the US economy. If you see a polit…

My claim wasn't whether trump is responsible, of course his tariffs are having a very real impact. My point was that one should never expect a politician to admit that, at best they dodge claiming responsibility but more often than not they point at someone else, often the last person in office. If you'd like to say my claim is uninformed that's fine, but I ask again for examples when a politician directly owned thei…

> My point was that one should never expect a politician to admit that, (...)

That's the problem with your false dichotomy: Trump already admitted tarrifs create economic problems.

https://fortune.com/2025/02/02/trump-tariffs-americans-some-...

Trump blaming predecessors for the problems created by his tarrifs policy goes way beyond your run-of-the-mill predecessor blaming. Trump is simultaneously warning his tarrifs policy will cause economic damage and that the economic damage created by his policies were caused by someone else.

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