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

921–930 of 991 posts

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

#921

Post by runako »

Braxton1980 wrote: post #837
runako wrote: post #666

Earlier quoted context omitted.

If you think no voters would be against the bill, I would suggest your model of our media landscape could use a refresher.

Can you be more specific? I don't think regular voters care about certain, targeted, tech bills.

Quick statistics I pulled[1]:

In the US, 170 million people use TikTok. TikTok's US revenue reached $10 billion in 2024. US adult users spend an average of 53.8 minutes per day on TikTok. In 2024, TikTok was downloaded 875.67 million times.

(This data is going to include estimates. I am not going to quibble about the estimates, but whichever credible data source you choose will support the position that TikTok is not a niche outlet only used by a small segment of Americans.

Also, this data does not explore the number of Americans who earn a living by posting to the platform. Not interested in a values discussion about this, but banning the platform would suddenly cut off some Americans' income.)

Not a direct comparison, but CBS generally pulls ~5 million viewers during prime time programming. It's entirely likely that more people watch TikTok regularly than watch any TV network. For better or worse, TikTok is a very popular media outlet in the US.

This is "targeted" in the sense that it's targeted at essentially half of Americans and "tech" in the sense that every media uses tech.

1 - https://backlinko.com/tiktok-users

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

#922

Post by packtreefly »

bombcar wrote: post #583
avsteele wrote: post #228

Earlier quoted context omitted.

That isn't the reason. They sunset in the bill so it has a lower CBO score (which calculates costs out to 10 years). If you sunset in the bill after 5 years, even if you know it will get renewed, the apparent cost goes down. Get it?

The CBO score is a perfect example of the metric becoming the measure and teaching to the test.

"ThE tAx CuT pAyS fOr ItSeLf"

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

#923

Post by travisb »

dataflow wrote: post #752
kmacdough wrote: post #749

Earlier quoted context omitted.

I could see it being inferred that way but, the way I read it, they are not meant as unilateral facts. Rather, they serve as rhetorical examples of where you might find contractors doing similar work, but where the one more in service of "public good" is taxed higher because it's open source. Strictly speaking, Windows bits are not all closed source and there exist closed source Linux bits. But it's not a point that…

> I think it's fair to use Windows and Linux as stand-ins for closed vs open source because it's a very accessible example 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 them to write open-source drivers vs. closed-source ones? I would've imagined the majority of drivers in such cases are closed-source, on every pla…

Linux kernel drivers often end up being GPL'd, but out of tree. This is because Linux releases many very useful (and sometimes critical to the use-case!) functions behind a GPL-license API restriction. This is EXPORT_SYMBOL_GPL.

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

#924

Post by ajmurmann »

teitoklien wrote: post #911
ajmurmann wrote: post #901

Earlier quoted context omitted.

> 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…

> 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.

That's why I said "real median household income". Real income in economics means PPP corrected and is up a lot. See: https://fred.stlouisfed.org/series/MEHOINUSA672N

I wholeheartedly agree on the housing issue though. The cause there isn't with top politicians or some evil cabal limiting housing but it's a local problem caused by elections of NIMBY candidates and local community having too much input on permitting while only a small group of mostly of older and wealthier NIMBYs show up to those meetings.

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

#925

Post by dataflow »

travisb wrote: post #923
dataflow wrote: post #752

Earlier quoted context omitted.

> I think it's fair to use Windows and Linux as stand-ins for closed vs open source because it's a very accessible example 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 them to write open-source drivers vs. closed-source ones? I would've imagined the majority of drivers in such cases are closed-source, on every pla…

Linux kernel drivers often end up being GPL'd, but out of tree. This is because Linux releases many very useful (and sometimes critical to the use-case!) functions behind a GPL-license API restriction. This is EXPORT_SYMBOL_GPL.

Are you sure this is exactly what it means? You're basically saying that if I start hacking on a driver that consumes such an API tonight, I must release it as GPL somewhere publicly the moment I start consuming the API? I can't even work on it for a bit privately?

I'm surprised if so, because usually these sorts of licenses only apply if you're redistributing the code, not if you're just using it privately.

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

#926

Post by kenjackson »

rayiner wrote: post #787
kenjackson wrote: post #717

Earlier quoted context omitted.

I think that is a misrepresentation of the fundamental progressive position, which is to make progress but never at the cost of the marginalized. Because we historically make most progress at the cost of the marginalized it can feel limiting or even discriminatory when we make sure they don’t beat the brunt of continued progress. There is nothing against the group you mention except that it might be the group that mo…

> I think that is a misrepresentation of the fundamental progressive position, which is to make progress but never at the cost of the marginalized. That just means that the marginalized become an anchor preventing progress. We can’t have nice things until we solve the problems of the bottom quantile—which we never will. If progressives had been in charge, America and everything it created wouldn’t exist. They never w…

“That just means that the marginalized become an anchor preventing progress.”

And that’s the difference. Progressives view it as important that we progress all groups and that challenge is fundamental to society, whereas you view them as an anchor.

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

#927

Post by PaulDavisThe1st »

ant6n wrote: post #767
PaulDavisThe1st wrote: post #693

Earlier quoted context omitted.

the big hoopla is this: you're a newish startup. You have $300k/yr revenue and $$270k/yr expenses of which $250k is paying your programmers. prior to this rule change, what you pay your programmers is just a deductible expense, so you owe taxes (in this very simplified example with no other expenses etc. etc.) on just $50k. after the rule change, you can deduct only $50k of the labor cost (in this year), so now you o…

How does this work, in your first year, to have 300K revenue on 270K development cost. It sounds like some very specific boot strapping case, and even then after 70K deductions its 230K profit, so like 50K in taxes on 30K profit. Sure it’s annoying, but it doesnt sound like total doom. Its more likely youll have 250K programmer expense in the first year, 100K in revenue, need 200K in outside investment, and pay very…

The logistics company example is not really relevant. The critical point about the rule change is the fact that all software related expenses, including salaries or contract labor costs, must now be amortized over 5 or 15 years. What was previously deductible no longer is, and this changes the cash flow situation dramatically for a software-intensive business, for 5 years.

Sure, for heavily capitalized startups that are losing money, the rule change is not an issue. But for companies that manage to get to profitable status soon, even if it is only a small profit, the rule change can be devastating. A quick search for past HN articles about this will provide lots of example links to follow.

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

#928

Post by vpribish »

masterjack wrote: post #470
vpribish wrote: post #417

Earlier quoted context omitted.

after 5 years then every year is deducting a whole year's worth of R&D - as long as that investment is not too lumpy from year to year you are back where you started

Which is fine for steady companies, but perpetually drags down any rapidly growing company

exactly. so this policy which was ostensibly about closing a loophole used by big tech is actually a benefit to big tech because it keeps disruptive new competitors from arising. regulatory capture strikes again.

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

#929

Post by magicalhippo »

bunnie wrote: post #902
rayiner wrote: post #828

Earlier quoted context omitted.

> In addition to the research costs, I'd also have to pay taxes on the research costs mostly up-front. Significantly, if the project doesn't work out, I'm still out of pocket for the tax money. That’s how it works for every business! If Jim Bean builds a distillation facility it has to amortize the investment in that over time. If the distillation facility doesn’t pan out, then it doesn’t get a refund for the taxes p…

The comparison with Jim Beam is misplaced. Both TSMC and Jim Beam already have to amortize their production equipment over several years. I'm not arguing that this should be changed. This is because the primary risk taken in a distillery build-out or a fab build-out is if there is market demand for a known product. It's primarily a business risk, not a research risk. Tax code is a reasonable tool to regulate business…

Norway did something similar with oil[1]. Companies could get most of their oil search expenses covered by the state, to encourage finding new oil fields.

But if a company starts extracting oil from a field they have to pay heavy taxes on that oil.

[1]: https://www.offshorenorge.no/om-oss/nyheter/2019/01/leterefu...

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

#930

Post by yencabulator »

rbultje wrote: post #683
chemmail wrote: post #553

Earlier quoted context omitted.

But we are great now. What else do we need?

The way this is "fixed" right now, every five years we need another round of republican government to make things great again. If only enough democrats cared to fix this.

The problem was created in the first place by republicans.

https://www.congress.gov/bill/115th-congress/house-bill/1/co...

Post reply on HN