It also classifies software development as R&D which together with immediate expensing for R&D undoes the Section 174 changes as far as I understand.
“For purposes of this section, any amount paid or incurred in connection with the development of any software shall be treated as a research or experimental expenditure“
The TCJA (passed in 2017) already did that (effective 2022). So it sounds like this new bill is keeping that, but changing the deduction rules back to what they were before 2022.
See this previous discussion of the TCJA:
> all "software development" is now an R&E expense.
(AIUI, "R&D" (research and development) and "R&E" (research and experimentation) are synonyms.)
tareqak · 5h ago
Page 301
> there shall allowed as a deduction any domestic research and experimental expenditures which are paid or incurred by the taxpayer in the current taxable year
AFAIK, there was no domestic vs. foreign R&D distinction in section 174 before.
Thorrez · 3h ago
There was a domestic vs foreign distinction in the TCJA, passed in 2017, which took effect in 2022:
> 174 to require taxpayers to amortize specified R&E expenditures ratably over a five-year period for domestic expenditures and a 15-year period for specified R&E expenditures attributed to foreign research
I doubt if this will make much difference. Offshoring as a tactic emerged in the pandemic when companies realised that being “remote” works just as well.
Sure, foreign R&D still gets amortized over 15 years (NPV ≈59 % of a full write-off, so you “lose” ~8.6 % of your R&D spend in present-value terms, and only 6.7 % of the cost is deductible in year 1, creating a 19.6 % cash-tax gap).
But offshore wages are often 50–70 % below U.S. rates:
• Even after the slower amortization drag, hiring at half the cost nets you ~30 % total savings on R&D headcount.
• On a pure cash basis you only need ~20 % lower wages to break even; most offshore markets easily exceed that.
• So the labor-cost arbitrage far outweighs the tax timing penalty unless your foreign salaries are less than ~20 % below U.S. levels.
In short: the 15-year amort rule hurts your tax deduction, but 50 %+ lower offshore wages more than make up for it.
throwaway2037 · 1h ago
> Offshoring as a tactic emerged in the pandemic when companies realised that being “remote” works just as well.
I am confused by this comment. Offshoring IT work to India has been going on since the early 2000s. The established model at many non tech companies is a few people onshore talking with biz stakeholders, then directing offshore staff.
bsenftner · 20m ago
Since I 90's, I remember it.
BobbyJo · 4h ago
This ignores the other financial and non-financial costs of offshoring: legal, cultural, temporal... a lot of the time, those close the gap.
On paper, offshoring has made sense the entire time, and yet here we are in 2025 and companies still hire American devs. Not only that, they often fly in foreign devs just to pay them more here than if they had just offshored to their home country.
xlii · 4h ago
I have approx. 15 years of experience working remotely for various companies all across the globe and was always an advocate of thesis that remote work is difficult and most people aren’t cut for it and (to horror of many proponents) and on average are less efficient than on-site hires.
There are many reasons: It’s difficult to understand _intention_ when deprived of non-verbal communication and working in a choppy network call. Even if one can gloss over communication needs etc. there’s burnout looming around the corner and natural, healthy laziness getting into the way. Sometimes even internal politics might be blocking knowledge/access/contribution for more or less peculiar reasons.
It’s not like it’s impossible to hire remote engineer, yet my (completely unmetered) estimates out of experience is that approx. 10% of engineers willing to work remotely can sustain health (physical and mental) and be efficient outside of 1-2 years of honeymoon period.
There was some tumbling around COVID but IMO both stationary jobs and remote ones are doing well on mid-high quality positions.
PeterStuer · 2h ago
From experience I think your 10% feels overly pessimistic. 30-40% feels more accurate, just like only about the same % that can survive an open plan or cubicle floor.
I see lots of people thriving in remote. Main reasons being a huge increase in quality of life. Regaining 2-3 hours of senseless commuting time per day, getting small household chores done over lunch, not having to schedule repair and maintainance appointments in the weekends etc. is huge.
Now I do agree it is not for everyone. I see especially younger people living alone not coping to well. Part of the reason is they (ab)used the office as a socializing place, and are not used to organizing a personal social life outside work. There's also people that don't actually have much work outside of attending office meetings, and nobody thrives sitting in Teams calls all day.
Then there's also real downsides. Some people living in shoebox appartments in the city just do not have the space. W
While work can be done (more?) efficiently remote, but carreer climbing needs in person contact. It's like dating. Real dinner or a video call? No comparison.
Best of both worlds would be 0 commute time to a luxurious private office inside the company premises. All the rest will be tradeoffs and compromises either way.
CalRobert · 1h ago
A lot of companies just suck at it too. "Here's Slack, figure it out" seems to be a common approach. In person you can pester the person next to you when you're new, overhear conversations, etc. but remote it is MUCH harder to ascertain the culture, Slack etiquette, etc (my favourite was "people write in Slack all the time, in public, even to themselves, it's your job to mute Slack when you need focus, and don't use DM's unless you really need the privacy"), but I have only seen this done very well in one place - Auth0 (pour one out :-( ) . Maybe because it started remote with founders thousands of KM apart.
cbg0 · 2h ago
It also has to do with how the companies handle the offshoring, as some larger corporations take the approach of just using an outsourcing company from a specific country (usually chosen by price) and assume that you can just pay a specific amount of money per developer and they will all be the same quality as the guys coming into the office.
I've worked most of my career as a remote employee and I can say that the best arrangement is when the company is as involved in hiring offshore employees as they are with hiring onshore ones. Someone working through an intermediary will always be disconnected from the company's success, as they work for an outsourcing company, and not the US corporation itself.
There are definitely a lot of discussions to be had around employee cultural fit, and I don't just mean company culture. You want a similar mindset and work ethic that your other employees have if you want a high chance of success.
We also need to talk about how some companies haven't been able to successfully adapt their processes to work with remote employees alongside the office employees and sometimes treat the offshore ones as second class citizens, which is not really a great thing.
AnthonyMouse · 2h ago
In addition to this, those factors contribute varying amounts to the total in any given case. So you also can't make the case that offshoring never makes sense, because in specific cases it does. But now there is a ~20% incentive for it to make sense in fewer cases.
__loam · 4h ago
Yeah people have been offshoring then onshoring once they realize offshoring sucks since at least the 90s. I remember my dad, who was also a software dev, complaining about it 20 years ago. It always swings back. The network effect in huge hubs like SF and NYC is massive.
fnordpiglet · 2h ago
I’ve been a part of the entire arc of offshored teams since the trend started in the late 90’s early 00’s. I’ve never seen it work. The primary issue is and always has been time zone related. While it doesn’t show to an accountant we do live on a sphere and there are implications to everyone. The solution is always to find some self contained effort for the remote centers but it never works because the entire company is pulling together and short of making the remote teams spin offs there’s no way to disentangle dependencies. And at some level even if you could management has to work cross regionally which isolates them from their center of power in the home office time zone. The root is the company is asking you to make immense personal sacrifice so they can save money if the model were to work. There is no upside to anyone other than the remote management in this situation so they burn out quickly and still fail because literally no one else in the company cares in any meaningful way. It’s unfair at its core and therefore fails.
The issues of quality and whatnot are at their core racist IMO but are made real because of the timezone issue. The norms and culture expected in the home time zones don’t translate easily and result in an impedance mismatch and a different measure of “good.” Because the remote team is isolated and unempowered they always struggle to adopt the standard of the team and to some extent can’t ever succeed in the quality space as it’ll be an ever shifting goalpost whose reasoning is effectively hidden. Then layer in the latent resentment on both sides and the whole situation is bound to fail, but the home teams have the advantage of being resident with the only management that matters.
I wish everyone involved would realize the experiment has failed. But CFOs are too powerful in most companies large enough to reasonably pull off outsourcing at all and the need for the CEO to please boards and investors who just operating off the financial statements and HBR white papers are too disconnected for why these efforts fail.
Unfortunately the current persecution of immigrants in the US will drive these arrangements more and more. Rather than on shoring local foreign talent with the collocated team, foreign talent will opt to avoid the fear society being birthed. This will lead to a strong incentive to follow talent to their home country leading to more imbalance in talent disoriented time zones. Maybe this would require everyone to figure out the above issues but I seriously doubt it. I think it’ll just make everyone less effective and not achieve anything positive for anyone.
CalRobert · 1h ago
It seems like more American companies are noticing that Latin America has lots of intelligent, clever people who produce good work, and cost less. I have worked with a lot of Argentinians and really enjoyed it.
I'm in Europe now and it definitely is easier to set up calls with my South African colleagues than the American ones.
__loam · 1h ago
One of the most insightful comments I've seen on this site.
BobbyJo · 3h ago
100%. Most of the planet is cheaper than the US, and has been for decades. That being the case, how are there so many knowledge workers here still?
Tade0 · 2h ago
Hailing from an outsourcing destination I think I need to state the obvious: there exist IT jobs outside the US.
Americans have a... distinct work culture and companies - local and foreign - are not stupid, so nowadays they aim for the 50-75 percentile in terms of compensation.
On top of that you absolutely need to be fluent in English, which disqualifies half the candidates right off the bat.
All this combined makes it not obvious whether one would want to/could work for an American company - particularly if it's through various middlemen.
US used to be 100% worth it, but over the course of the last 25 years the ratio of GDPs per capita between USA and my country fell from 5.5 to around 3.75 and compensation naturally followed.
Lastly, the dollar fell 15% since the start of 2025 against my country's currency and that has had an effect on available openings.
throwaway2037 · 1h ago
> Americans have a... distinct work culture
That is a mighty wide brush to paint your generalisation. Do Brazilians or South Africans or Sri Lankans also have "distinct work culture"? I assume yes. Not much being said there.
Another way to look at it: If your country was much richer than the US the model would be flipped. Do you think Americans would post a similar generalisation here? Yep. Not much being said.
bravesoul2 · 2h ago
Not convinced. Offshore has been possible since forever. Maybe IC cam be remote now. Your team can be global. US lead, 2 India based devs, 2 brazil devs. But not having this wasn't a blocker for saving money.
10, 100 or 500 people team in India who could work in the office together was possible forever.
It will change. I think once other countries become bigger investment centres. Not sure how yet though. US is a good potting soil for a startup because there is this huge addressable and free market. And the startup ecosystem. Then add in that most startups want WFO and minimum synced time zones... and for larger tech all that specialism is in house in the US.
g0db1t · 2h ago
Yeah, there's simply a lot of 'Muricans thinking programming and software dev. for some reason only can be done inside of the US.
As a EU senior dev I know zero senior devs making six figures pa - Go figure
kevin_thibedeau · 25m ago
Six figures isn't special in the US for skilled tech workers. My starting salary as a college grad 25 years ago was an unremarkable $55K when dotcoms were slinging six figure salaries and options. That is now $102K.
bravesoul2 · 2h ago
I think there is game theory at play. I don't think Google for example is leaving money on the table. They hire worldwide of course but they are not swapping US for cheaper countries on mass and it must be for a good reason. Maybe it's a missed opportunity and some YC company dominates the new arbitrage. Who knows! I think I like the soil analogy. Moving the palm tree to another spot is risky if it's doing well in its current soil.
CalRobert · 1h ago
It's not the heady days of 2022 but six figures shouldn't be impossible for someone with 10+ years of experience. But the trick is to (mostly) ignore the European companies and go for the American ones operating in Europe. Switzerland, Norway, and Ireland can be decent too.
I'm still stunned when I see what devs are paid in Germany and southern Europe though.
eric-burel · 4h ago
If I read properly this is explicitely targeting UE, Canada, UK and other countries with high wages and R&D and software engineering capabilities.
tossandthrow · 3h ago
Yep, seems like this is an opaque tarrif.
Other countries should use this when retaliating.
munch117 · 1h ago
If I'm understanding this correctly then this is about a tax disincentive, making it more expensive for US companies to poach R&D talent from other countries.
Not all countries will see that as a problem.
tossandthrow · 1h ago
The current administration is making a huge fuss out of VAT in Europe.
whatshisface · 4h ago
It's not possible, really, to believe that markets are inefficient enough to pay twice the price for something in one place as another...
eru · 2h ago
> Offshoring as a tactic emerged in the pandemic when companies realised that being “remote” works just as well.
Offshoring is far older than the pandemic.
ozgrakkurt · 4h ago
It is delusional to think you get same quality work for 70% less price.
whatevaa · 2h ago
It is not when ir comes to wages. People in other continent aren't dumb, the overall wages are just lower.
klabb3 · 2h ago
If you work at FAANG and relocate from NYC/SF to a smaller satellite office within the US, you can take a large pay cut. Unless things have changed in the last few years, companies usually pay location-based market rate. The lines are blurred with remote work - which market are you really a part of? But there is nothing magical that separates within the US from outside.
ozgrakkurt · 1h ago
Top engineers move to best pay location. For example best engineers in europe etc. move to US or get similarly high salaries in Europe. And having more high talent people in a location creates a different culture.
There is ofc some difference but if you are taking averages you will have much better engineers in a company based in nyc vs berlin.
I’m not an expert but this has been very apparent in places I worked, US based companies just had a better work setup and everything moved faster and with higher quality.
As an example, just saying an engineer is quarter the price in Turkey so you can just outsource there is very foolish. It just doesn’t work that way, maybe in wet dreams of CEOs only.
Similar thing with LLMs, some people are salivating over how they won’t need developers but it just isn’t that way yet.
Seeing how hungry businesses are for outsourcing and hiring remote, and seeing how it isn’t really working that way should be concrete proof for this.
bgnn · 2h ago
So US will continue subsidizing its R&D while complaining the rest of the world is doing so? What changed then?
bongodongobob · 2h ago
If you're going to subsidize anything why wouldn't it be R&D
bgnn · 1h ago
There's nothing inherently wrong with it. Though it creates a competitive advantage and forces other countries to do the same, of not more. Everyone starts pointing fingers at each other and imposing tariff at the end.
Plus this puts pressure on manufacturing, as they will not be able to compete. So yeah, as a tool to boost knowledge economy it works but is it objectively a good thing to do I don't know.
lsllc · 10h ago
Looks like prior years can be caught up with:
> Companies with capitalized domestic R&D expenses from 2022–2024 can elect a catch-up deduction, which could significantly improve cash flow for firms engaged in innovation.
jofzar · 6h ago
So this is going to get all those jobs back that people have been layed off for right? Right?
nine_k · 6h ago
Hiring software engineers is going to become less expensive. So likely there's going to be more jobs on the market, and maybe better jobs.
But when a forest is cut, usually a new forest that grows on that place looks different.
supportengineer · 6h ago
Reversion to the mean
coliveira · 6h ago
Of course not.
pavlov · 2h ago
Is there a more bizarre legislative process anywhere in the world?
The US Congress is practically able to pass only a single giant bill every year. To work around its own deficit rules, these bills are packed with taxation time bombs where rules have expiration dates or delayed starts several years in the future.
Then, if Congress doesn’t get around to defusing its own time bombs, you get situations like this R&D expensing fiasco where American businesses and employees pay the price. Unless the bomb is hopefully retroactively cancelled, like happened now.
On top of this madness, there’s an executive branch operating like a runaway autocracy, producing a flood of executive orders that intentionally flaunt laws and even target specific private entities (e.g. Trump’s attacks on law firms that worked for his opponents, and universities he doesn’t like).
How long can a nation function like this? If the bond market loses faith in this process, there could be mayhem. Will be interesting to see if the passage of BBB impacts US debt when markets open again on Monday.
kevin_thibedeau · 18m ago
Congress has transformed from a body of civil servants working toward a common goal to a bunch of solipsist narcissists happy to burn everything down for more face time in the beltway media echo chamber.
tomrod · 10h ago
If correct, this is a good thing on a generally bad, overstuffed bill. Immediate expensing never should have been changed in the first place, and it was always weird seeing people twist themselves in knots defending it.
xp84 · 9h ago
It’s an overstuffed bill because nobody will compromise on anything so the only way to pass a bill that has anything even remotely controversial to either party is one reconciliation bill a year.
dragonwriter · 9h ago
> It’s an overstuffed bill because nobody will compromise on anything so the only way to pass a bill that has anything even remotely controversial to either party is one reconciliation bill a year.
No, and lots of controversial bills have passed other than as reconciliation bills, and especially so during trifectas where they "controversial" within the minority party but broadly supported by the majority; reconciliation is necessary to pass something that strains unity in the majority party and is uniformly opposed by (not "controversial to") the minority party, perhaps.
cheriot · 9h ago
In the last 10 years, have there been more than a handful of bills that got 60 votes in the senate?
I wouldn't like what the current congress would do without the filibuster, but at this point a paralyzed system might be worse.
apsec112 · 9h ago
"Despite Democrats holding thin majorities in both chambers during a period of intense political polarization, the 117th Congress (2021-2023) oversaw the passage of numerous significant bills, including the Inflation Reduction Act, American Rescue Plan Act, Infrastructure Investment and Jobs Act, Postal Service Reform Act, Bipartisan Safer Communities Act, CHIPS and Science Act, Honoring Our PACT Act, Electoral Count Reform and Presidential Transition Improvement Act, and Respect for Marriage Act."
All of these except the first two were bipartisan and got 60 Senate votes (or more)
It does seem like things are trending toward less public laws passing over the last decade, as well as record low time in session and other congressional activity.
margalabargala · 6h ago
Absolutely. Many bills in the Senate in that time have gotten over 90. Here's one that passed 95-2 that I picked at random.
A lot of what happens in Congress is obvious to do and everyone agrees. While the media certainly focuses on the handful of things the two parties are at odds over, most of the lawmaking done by Congress is not controversial between parties, and is simply passed, so we don't hear about it.
a_wild_dandan · 8h ago
What does that matter? We're talking trifectas here, not supermajorities. The filibuster is a cute remnant of "decorum." It's a vestigial rule which will disappear when too inconvenient. (Fun question with not-so-fun answers: why isn't the filibuster gone already?)
ethbr1 · 7h ago
> (Fun question with not-so-fun answers: why isn't the filibuster gone already?)
Because both parties are scared eventually the other party will be back in the majority.
actionfromafar · 56m ago
So it seems like a good canary? If it’s removed, the ruling party is no longer afraid it will be ever removed from power.
9283409232 · 9h ago
The answer is to vote out politicians. Getting ranked choice voting on your states ballot would go a long way to fixing this. They would not have Mamdani on the ballot for NY mayor if it wasn't for ranked choice voting. Certain politicans know this and have made RCV illegal in their state. Get RCV on the ballot for your state.
AnthonyMouse · 2h ago
Score voting (or STAR) is better.
boroboro4 · 6h ago
Not important but Mamdani would’ve won without ranked choice voting too, it didn’t play a role in the end.
tialaramex · 5h ago
We can't know. Ranked choice changes how people vote.
In particular it gives people permission to vote for a candidate they like but don't expect to be able to win.
mindslight · 8h ago
RCV / Ranked Pairs of course. The IRV decision process is still a relic of the two party system, with the possibility for some pretty terrible strategic-voting dynamics as votes diverge from just two major parties.
sugarpimpdorsey · 8h ago
The last time something like that happened was probably the Patriot Act.
Calavar · 8h ago
The 2024 Ukraine defense funding bill passed despite having < 50% support in the majority party in the House, and it was not part of a reconciliation.
rpiguy · 8h ago
Affordable Care Act (Obamacare) was the most sweeping legislation ever passed via reconciliation.
apsec112 · 8h ago
Obamacare was passed via regular order (60 Senate votes), not reconciliation. There was a follow-up package to tweak it that passed via reconciliation in 2010, but the original bill was regular order. It's the only (very brief) window where one party has held 60 Senate seats since 1977.
onlyrealcuzzo · 7h ago
Which is why we need to get rid of reconciliation and go back to actually needing to get compromise, but hell will freeze over twice before that happens.
pfannkuchen · 7h ago
It seems like a more formalized quid pro quo system is needed so that political favors can be split across bills and relied upon. This sort of thing seems to be human nature, it doesn’t help anyone to pretend in the procedural rules that it doesn’t happen.
disgruntledphd2 · 4h ago
This was called pork when it used to happen and people were very angry about it.
earth2mars · 9h ago
This. TCJA removed it and OBBBA restored it. What am I missing here
rhinoceraptor · 9h ago
Classic 45-47 maneuver, first create a problem. Then solve it, often poorly and incompletely. Finally, claim victory, another 300 IQ 5D chess move in the books.
lesuorac · 9h ago
It lets you claim BBB doesn't increase the budget by as much as it'll ultimately do.
By having a bunch of random provision in BBB that generate revenue it lowers it's impact on the defect and then you can repeal them later on after passing BBB.
tossandthrow · 2h ago
> Immediate expensing never should have been changed in the first place
This is indicative of ignorance. There is a reason why we have these rules.
mindslight · 8h ago
Twisting not required. Depreciation straightforwardly applies to every other business capital expenditure. Hire someone to put a new roof on a rental property, and you're out the tens of thousands of dollars cash while only getting an immediate deduction for one thirtieth of the value. If you were expecting to pay that cash out of income, it's effectively a realized income and then reinvestment.
The recent (-ly undone) change went against decades of how things were, was crippling for medium size cashflow-positive startups, effectively increased taxes, etc. But it was really just a straightforward application of the general principles that apply to most everything else.
AnthonyMouse · 2h ago
> The recent (-ly undone) change went against decades of how things were, was crippling for medium size cashflow-positive startups, effectively increased taxes, etc. But it was really just a straightforward application of the general principles that apply to most everything else.
The error was in reconciling them by getting rid of it for software R&D instead of allowing other business expenses to be deducted when they're paid for as well.
For large stable incumbents that have the same expenses every year, the difference doesn't matter except in the first years after you make the change, because it doesn't matter if you deduct all of this year's expense this year or 5% of each of the last 20 years' expenses this year, they add up to the same deduction every year.
Where it matters is for new challengers, because they don't have arbitrarily many years worth of legacy expenses to deduct, so their deduction in their first year will be less than their incumbent competitor's.
It also creates a disincentive (or competitive disadvantage) to increase long-term investments. If some existing company had been making a $5M investment every year but is now facing new foreign competition and needs to increase it to $10M in order to stay competitive, they're in the same position as the upstart. Moreover, then they may not be able to do it, because they were going to have to run lean and divert the $5M profit they usually make to increasing their capital investments, but then the government is expecting tax on most of that $5M which means they can't spend it this year it even though it's ultimately a deduction.
Notice what this does specifically in the case of real estate: If rents start going up the normal incentive is to build new housing, but now you have to put out all the money to build a new building in year 0 and not get to deduct it for decades. Is that the incentive we want? Probably not.
djoldman · 8h ago
?
This applied to salaries, it wasn't a capital expenditure as "capital expenditure" has traditionally been defined.
This was an operational expense.
tomrod · 8h ago
While accurate, capex captures the building of things, like hiring a company (that pays salaries) to build a factory.
mindslight · 8h ago
Yes, salaries spent to build a capital asset. Half the cost of a new roof is paying salaries, right? And yet, you still depreciate the whole value of the completed thing, not just the cost of the input materials. If you hire the roofers yourself as employees, you're still supposed to be accounting this way - although obviously there are many ways to fudge it.
The point is that building a piece of software that is going to be in use for several+ years is creating an asset. It just goes against our intuition since this industry is so driven by fast fashion, and the bookkeeping of specific components, their depreciation schedules, early end of life, (etc) seems like needless complexity.
creato · 6h ago
At least 50% of time on every software team I've ever been on was spent on maintenance and fixing bugs.
You can expense such time as opex, but it has to be justified, and that's often difficult to do. Did you fix a bug by refactoring some code to avoid the problem? Is that capex or opex? Can you convince the IRS of such?
The old (and now new) rules eliminated this accounting game and uncertainty.
mindslight · 6h ago
Sure. I get that having to facilitate accounting takes away from programming, and that nothing is cut in dry with the IRS. I'm not even a fan of the general idea of mandatory depreciation schedules, seeing depreciation as more of an artifact that fell out from double entry book keeping's proliferation of different types of accounts. My only point was that this is just the same regime that everything else has to deal with.
For example if you pay someone to fix a leaky roof and they replace a section of a given size, can you call it a repair/maintenance expense or should you be depreciating it as an improvement to the building? Can you convince the IRS of such? The only reason this has more straightforward answers is that accountants have been answering this question longer.
eastbound · 4h ago
The debate is the duration of the capex in software. The law will oscillate between “Software lasts 15 years!” and “basically throw-away”.
At this moment, the law came back to 1-year deprecation.
johncole · 9h ago
I think we will see this lead to a boost in software developer employment.
lsllc · 8h ago
Might even ameliorate some of the corporate RTO efforts and now s/w devs will have more employment choice and a presumably more vibrant job market.
mlinhares · 8h ago
I doubt it, the narrative is that software engineering is dead and everything will be replaced by AI, so that salaries can continue to be depressed. Just like the original passing didn't really cause much trouble in the general market this repeal will mostly just produce more shareholder value.
BobbyJo · 6h ago
Original passing didn't cause much trouble because the provision didn't take effect til 4 years later.
seattle_spring · 7h ago
Anyone who knows anything about software and has used AI for more than 24 hours knows that AI won't be "replacing" software engineering anytime soon.
akmarinov · 5h ago
Hard disagree, I’ve been agentic coding the past couple of months and have written maybe 100 lines doing this for a living.
The rest is coming up with SDDs and reviewing AI’s code.
I can easily see most devs, doctors and lawyers automated away in the next couple of years.
coffeebeqn · 3h ago
Either we have wildly different difficulty levels at our jobs or this is bs. I tried the agents (I get access to basically all state of the art from my company) and they still have all the same issues of agents from a year back. Each step gets more chaotic and the end result is always that I end up reverting the over complicated mess it made and writing it myself. One-offs with lots of context still sometimes work.
Even a perfect eval loop like failing tests end up 80% of the time with them creating something way too complicated since they solve one visible but not root issue at a time and build on top of that hacky foundation until again I end up reverting it all
akmarinov · 2h ago
Yeah - that’s the hard part now - dialing things down to eliminate the divergent paths the AI can take to implement what you want.
You can tell it “implement feature X” and it’ll go and do whatever’s easiest for it, often something dumb, that’s when people usually think “it’s dumb, won’t replace devs” and give up. Or you can nail down your requirements by talking to it and describing what you’re looking for, often it comes back with things you hadn’t considered or ways of doing things you didn’t know. Then just tell it “implement this SDD” and watch it one shot it in an hour or so.
There’s also pain points - some languages like Swift have changed so often and there’s little open source code to train on out there, so it’s on the worse side if you do iOS development.
It’s a new skill that needs working at, but in the end your output is significantly increased.
throwawaysleep · 5h ago
Very much agree.
I am overemployed with 3 dev jobs at once. AI is writing virtually all my code and letting me nap all day. Eventually that will end once people see the power of them.
ldjkfkdsjnv · 6h ago
ive been coding 5+ hours a day almost every day for 15 years. i think ai will replace 70% of SWE in the near future. not employement, but 70% of the current work done by engineers
hightrix · 6h ago
Agreed. I see AI as a major tool upgrade in the same way the IDE was an upgrade from text editors. It will quickly replace the need to do trivial things and greatly reduce the time needed to do complex things.
zeroonetwothree · 5h ago
I don’t even spend 70% of my time coding. I suspect that’s common and looking at data it’s more like 25% on average. So even if it replaces 100% of coding (unlikely) that’s the extent of the gain.
distances · 1h ago
Agreed, seems it's a great day if I get close to 50% of coding time. The rest is various meetings, communication, and code review.
And even with reviews you can currently plausibly automate only the code correctness check part, the juicy part of reviews is always manual testing of the change and doing the logical reasoning if the change is doing a meaningful thing. And no, the ticket with the spec is not a reliable source of this info for an LLM as it's always just a partial understanding of the concept.
AnthonyMouse · 2h ago
At which point you're potentially looking at Jevon's Paradox.
Software developers do X and Y. AI thing can now do X, so it's used for that, and it's cheaper, so the number of projects increase because you get more demand at a lower price. Those projects each need someone to do Y.
jnfno · 5h ago
I’ve been coding 5+ a day since the late 80s
And I agree. Because ultimately we don’t need that much code in the first place. We need robust data sets.
AI models will enable the data driven machine state dream. Chips that self improve models will boot strap from them and rely on humans to iteratively improve updates.
Coding like it’s 1970 in the 2020s and beyond is not that high tech.
x3n0ph3n3 · 8h ago
It's always been a nonsense narrative with lack of grounding in reality.
kelnos · 7h ago
At best it will undo some of the decline over the past 2-3 years.
This "solution" is to a problem the GOP created themselves during Trump's first term, when they made the R&D deduction stuff expire in 2022.
noodletheworld · 7h ago
Are you being serious or sarcastic? I cant tell.
Seriously, that seems unlikely.
Changes like this may have an impact on employment but it’s impossible to observe the results in a vacuum.
Given that most large companies are towing the “AI means less jobs required” line, it seems likely that this will, at best, modestly slow the rate at which companies divest themselves of software developers.
I cant see any reasonable reason, in a broader context, this would have a meaningful impact.
(Yeah yeah, AI means more jobs one day maybe, but right now that is categorically not true, and the future is always pure speculation, but in the near term, the impact of this seems like it probably wont be material to me; maybe a small reduction in the number of layoffs)
Spartan-S63 · 9h ago
I’m hoping so, too, along with another boost in salary growth since they’re immediately expensable.
tareqak · 10h ago
> Foreign R&D must still be amortized over 15 years
me551ah · 6h ago
Sure, foreign R&D still gets amortized over 15 years (NPV ≈59 % of a full write-off, so you “lose” ~8.6 % of your R&D spend in present-value terms, and only 6.7 % of the cost is deductible in year 1, creating a 19.6 % cash-tax gap).
But offshore wages are often 50–70 % below U.S. rates:
• Even after the slower amortization drag, hiring at half the cost nets you ~30 % total savings on R&D headcount.
• On a pure cash basis you only need ~20 % lower wages to break even; most offshore markets easily exceed that.
• So the labor-cost arbitrage far outweighs the tax timing penalty unless your foreign salaries are less than ~20 % below U.S. levels.
In short: the 15-year amort rule hurts your tax deduction, but 50 %+ lower offshore wages more than make up for it.
macinjosh · 10h ago
Awesome, this literally could not be better for American tech workers.
beebmam · 10h ago
There's also H-1B (and other worker visa) restrictions/costs imposed. Overall, quite good for the American tech worker
lukeschlather · 8h ago
IDK, sounds like it's a bunch of stupid misc. fees. So instead of just raising the minimum wage for H1Bs and indexing it to inflation, they raise taxes (and these taxes on H1Bs don't seem like a consequential funding source. They might even bring in less tax revenue than raising the H1B minimum wage to where it should be if it had originally been indexed to inflation.)
autobodie · 5h ago
>raising the minimum wage for H1Bs and indexing it to inflation
Huh? Not even regular minimum wage is indexed to inflation. What are you talking about?
seany · 7h ago
Huh? Eliminating h1bs tracks better with what's going on.
Edit: Oh you mean costs in general, not in the context of section 147
lesuorac · 9h ago
Meh.
If you hire H-1B you should be required to pay a fee greater than it costs to educate an equivalent American. Otherwise you're always in the situation where you have to hire foreigners because no Americans are trained. (or in reality you hire foreigners because they're cheaper for the same role which this no longer makes it the case)
calvinmorrison · 8h ago
NJ, home of the H1B scam. I worked with these guys at some large corporations on contract and as an employeed (F500 companies). I felt bad for them. Modern serfs. They lived in housing owned by you know the names of these indian firms that do 'anything'. Companies love the low cost, unlimited hours, and no need to hire, they're contractors. they sign deals with big indian vendors to provide everythingunderthesun.
Poor dudes are like ' this is my chance to make it in America' and the high caste indian management treats them like dirt.
The 'old boomers yelling at young people' is a myth in professional America compared to the absolute screaming insults you'd hear hurled at these guys.
And if they messed up? boom, gone, next guy flown in.
Also (in above source), no ACA subsidies for H-1B visa holders (and others), which likely means employers they will have to pay more for health care if they want to cover their immigrant workers
> $1,000 asylum application fee — first in U.S. history
> $1,000 fee for individuals paroled into the U.S.
> $3,500 fee for sponsors of unaccompanied children
> $5,000 fee for sponsors of unaccompanied children who fail to appear in court
> $550 fee for work permits
> $500 application fee for Temporary Protected Status (TPS)
> $400 fee to file a diversity immigrant visa application
> $250 fee to register for the Diversity Visa Lottery
> $250 visa integrity fee
> $100 year fee while asylum applications remain pending
> $100 fee for continuances granted in immigration court
> $5,000 fee for individuals ordered removed in absentia
> $1,500 fee to adjust status to lawful permanent resident (green card)
> $1,050 fee for inadmissibility waivers
> $900 fee to appeal a decision by an immigration judge
> $900 fee to appeal a decision by DHS
> $1,325 fee to appeal in practitioner disciplinary cases
> $900 fee to file motions to reopen or reconsider
> $600 application fee for suspension of deportation
> $600 application fee for cancellation of removal (permanent residents)
> $1,500 application fee for cancellation of removal (non-permanent residents)
> $30 fee for Form I-94 (arrival/departure record), up from $6
apical_dendrite · 8h ago
The $100/year fee while an asylum case is pending means that the government is charging someone for the government's own inability to process cases quickly.
Brybry · 8h ago
The House's[1] SEC. 112104. EXCISE TAX ON REMITTANCE TRANSFERS. 3.5% tax became 1% in the Senate's[2] SEC. 70604. EXCISE TAX ON CERTAIN REMITTANCE TRANSFERS and a lot of the language changed.
The Senate made a lot of changes (Byrd rule also nuked a lot of stuff) so old articles are of limited use to the final bill.
I don't even know if [2] is the actual final text as there is neither an enrolled or public law version on congress.gov yet.
It's super annoying how often we can't read the final text of a bill before Congress votes on it.
> 3.5% remittance fees on sending money out of the US:
The version of the bill that passed a 1% excise is applicable "only to any remittance transfer for which the sender provides cash, a money order, a cashier’s check, or any other similar physical instrument".
earth2mars · 9h ago
Yes, but why the domestic r&d must be amortized only within 5 years? One way it is harder for finance to deduct all the expense within 1 year or they have to amortize only within 5 years. In case of foreign r&d expenses though they cannot detect in the year they incur but they have 15 years amortize. So I don't get the benefit of. In fact if they haven't touched this it could have been much better. In tcja they made it worse. And they fix it partially by making it deductible within the year they incur for domestic r&d. But the amortization still kills it.
loeg · 7h ago
You might look at the rest of the bill.
Den_VR · 10h ago
So payroll for R&D is now entirely tax deductible? Businesses get to choose to pay taxes or do R&D for themselves?
alphazard · 10h ago
Tax deductible is a weird way of phrasing it. It's not like these software companies were counting their money at the end of the quarter, and then deciding to do R&D instead of paying taxes. They had already paid R&D expenses to build the product, which gained them revenue. Previously they weren't allowed to actualize the cost of R&D all at once, so the business could be losing money, and still have to pay taxes on top of the loss (which is nuts).
This fixes the problem, so now if you spend $100 on software developers, and you make $100 from the software, then you have $0 income, instead of $80 income.
tomrod · 10h ago
It was also weird because people pay money on income (dividend, partner payment, SCorp share, etc.) anyway, so in a long term view this incentivized companies to keep fewer software engineers on staff.
n_u · 10h ago
It’s more about whether or not the company has taxable profits for that year (importantly these are not the same as real profits). I would read this article to understand more about how being forced to amortize tax deductions for expenses affects a business’s taxes.
Either scenario taxes are paid - it’s just how and over what time period.
tomrod · 10h ago
In the long run, we are all dead. 20% depreciation per year for any software developed is a burden for all but the largest of companies.
bobmcnamara · 8h ago
This matched capex software.
Weird how the depreciation schedule changes based on how the software was acquired.
CraigJPerry · 4h ago
Could this transfer enough money to mint a person as the first trillionaire?
Econ 101: A government deficit increases the net financial worth of the private sector.
The US usually increases the net financial worth of the private sector by around $2tn per year, OBBB should move that to around $3tn per year (CBO estimate https://www.cbo.gov/publication/61486)
If you accumulate a dollar per second in net worth, then you become:
A millionaire in 11 days
A billionaire in 32 years
A trillionaire in 32,000 years
Obviously an indiscriminate increase in money without a corresponding increase in output will show up in inflation.
So it's a wealth transfer, from those whose financial affairs will remain comparatively static (your dollar will be worth less via inflation) to those who can capture the new money streams.
rendaw · 2h ago
There's something I didn't get about the discourse about this, maybe someone can explain. The tax change greatly affected small businesses/startups with unstable revenue, right? But companies like Amazon, Google, etc are much more established companies with diversivied, stable revenue and longer term planning I'd assume - so it doesn't seem like this should have affected them as much.
The popular story currently is that the massive layoffs were due to the tax/accounting change, but in that case why the big players like Amazon etc have so many layoffs? Or is that the popular story because, while Amazon etc are large, by total employee count most people are employed at smaller business that were more affected by this?
Or was the FAANG stuff actually AI after all? The tax change story sounds more plausible to me but I can't connect everything.
ttul · 7h ago
Meanwhile, in Canada, not only can you expense R&D, but there is a cashable tax refund that will give you back about 60% of your developers’ salaries…
nickff · 5h ago
You can only expense Canadian R&D expenses; meaning anything that is not completely used up almost immediately is treated as an asset. This makes almost no difference for software development, but is very important (and disadvantageous) in more capital-intensive industries.
veeti · 1h ago
Meanwhile in one of the world's higest taxed welfare states, where you absolutely can deduct 100% of SW developer salaries I feel I've been taking crazy pills every time reading these threads. It's almost as if some folks in """Hacker""" News wanted this law to stay to further cement gigantic incumbents and make it impossible for bootstrapped companies to compete.
Galanwe · 5h ago
There is something similar in France, the Crédit Impôts Recherche (CIR), I remember it was around 50%. I've heard it's going to disappear though, there were abuses.
eric-burel · 4h ago
Hi, CIR expert here, it's well and alive. There has been a communication push against it last year but relatively over.
It's 30% of R&D expenses as a tax cut.
Update: I think the 50% you mention is related to non salary expenses CII = a smaller similar system for innovation, which we differentiate from R&D. CII used to cover non salary expenses with a 50% forfait but this part has been removed indeed. It still covers 20% of salary expenses.
forty · 4h ago
"There are abuses" is really an understatement. "It's mostly abuse and there might be some legitimate beneficiaries" would be more correct.
eric-burel · 3h ago
It's hackernews, not Elon Musk's X or the French parliament, please bring sources and precise details.
forty · 2h ago
It's quite common knowledge :) if you want journalist material, I think there was a Cash Investigation on the topic a few years ago.
I have discussed this topic with many other engineers (known from engineering school, from working 13+ years in the Paris tech startup ecosystem and from my worker union, whose scope include most tech companies) and I have never heard any of them saying they did not write bullshit CIR reports for bullshit projects. I have myself written my fair share of those bullshit reports. There are even companies whose business is to write the bullshit reports for you in exchange for x% of your CIR credit. I worked with such company.
huhkerrf · 1h ago
It's also capricious. I've been in companies doing legitimate r&d who would spend man months preparing for the CIR only to get it rejected, while they got it in previous years for much less interesting work.
anovikov · 5h ago
So it means that indirectly, developers' salaries are not a taxable income in Canada if they are working on R&D? Meaning, they do pay taxes on their income, but their employer gets those taxes back, so if tax is 60%, the employer could pay 250% of what they'd pay otherwise, get 150% back, then the developer pays 150% of taxes, and gets 100%, so in effect the salary is tax-free. Is that what you meant to say?
If so, it sounds almost too good to be true. Why aren't all startups in Canada?
Canada · 4h ago
Yeah, I never thought of it that way. Your plan sounds great, but, in practice how it works is you get paid about half of what you would get in the US. Currently less than half due to the unusual currency exchange rates.
nickff · 5h ago
There are many limits on SR&ED, and the reporting/auditing process is burdensome. Canada also suffers from a variety of other inconveniences, mostly related to its dependence on resource extraction-related industries.
throwawaysleep · 5h ago
Canada's lack of startups is heavily cultural.
We adopt new products less. We are far more risk averse about purchasing goods or services from startups, far more risk averse about funding them (founders often give personal guarantees to get the investment), value the equity startups offer at far less, etc. Government is far more fussy about accountability with that refundable R&D money, so lots of time is spent filling out paperwork and hiring consultants to do it.
Here is a video that explains a lot about Canadian purchasing:
The cultural bit is underrated. Tobias Lütke from Germany is the co-founder and CEO of Shopify has written about this issue of Canadian business culture extensively. Also, the ecosystem of VCs in the US are unmatched globally. And, the internal market in US is f'ing huge.
tormeh · 2h ago
I don’t think this is uniquely Canadian. And it’s usually semi-rational, if you really hate dealing with switching. Most cheaper subscription providers will give you a good deal at first, then jack up the prices when they’re bought by a major provider. New cheaper providers are founded, and the cycle continues. The cheaper prices last for two or three years, or similarly short. Most people would rather take the loss than having to pay attention to this stuff.
sMarsIntruder · 5h ago
I hate to see this, but you’re comparing two completely different systems.
Like it or not, but Canada is much more “socialist”, you can’t expect it in any case to be like US or viceversa.
whatshisface · 4h ago
I saw a chart that added the market value of government support to income for US persons, and it used the term "household resources." I'd like to see a table of household resource distributions for Canada and the US.
cbsmith · 3h ago
Canada is "much more socialist" in that it has socialized medical insurance. Aside from that, it's maybe a tiny bit more socialist, though one could argue it's not more socialist at all.
The systems are different, but saying they are completely different is really a stretch. There's a GST that the US doesn't have, which is, ironically, a regressive tax. If you ranked the tax code of countries by similarity to the US tax code, I'm not sure Canada would be at the top of the list, but it wouldn't be that far down.
charlieyu1 · 4h ago
This bill is so random. The poker world is going doom and gloom when BBB limits the amount of gambling loss deductibles to 90% of gambling wins.
phtrivier · 3h ago
Remember when we software engineers painfully learned to _not_ do massive releases with hundred of changes that are guaranteed to create bugs ?
Well, imagine if instead we were _incentivized_ to create lots of bugs in huge releases, because it helped us ship that one important feature that the PM wanted in the middle of the garbage - and also, that we were guaranteed never to have to debug the software ever, and god forbid, to use it ?
agwa · 8h ago
As a small software business owner, I have to agree with Michele Hansen (who spent 2 years advocating on behalf of small software businesses for this very change): "we’re finally going to get Section 174 relief, and I couldn’t be angrier" https://www.linkedin.com/posts/mjwhansen_it-looks-like-were-...
benreesman · 5h ago
Yeah. This is a tough one. Its a really bad bill that happens to also be the best thing that could happen in the economic life of most any programmer.
This is going to make a lot of people's lives a lot worse and I'm against it even though it's an absurd windfall for me and people like me.
andrepd · 1h ago
Yeah. Not gonna lie it's a bit obscene watching people in this thread revelling that their absurdly highly paid jobs will become even more highly paid, given what's at stake.
doctorpangloss · 5h ago
Not sure if this is an absurd windfall... It aligns software developers with the guild professionals, like dentists and lawyers, who had an economically equivalent benefit via S corp distributions. Except to get this one, you have to pay a royalty to someone to write your technical narrative.
benreesman · 5h ago
I got more inbound recruiter email in the last week than in the two years up until last week.
Everyone's BATNA just skyrocketed. What you choose to do with a huge surge in your pricing power is up to you, but you have it.
yieldcrv · 8h ago
I disagree, every rider was independently lobbied for and the outcome would be the same if passed separately by Congress or as a rider in a larger bill like it was.
There is no reason to have cognitive dissonance over it.
edaemon · 8h ago
If every rider was independently proposed the outcome wouldn't be the same, reconciliation wouldn't apply and 60 Senate votes would be required to pass them.
yieldcrv · 8h ago
decent point
two counteracting forces:
The senate parliamentarian decided they could be in the reconciliation bill
and outside of the reconciliation bill, believe it or not, Congress does pass other bills over the 60 senate vote threshold
This R&D one would be a decent candidate
acheron · 8h ago
It proves they never actually cared in the first place, it’s just arguments as soldiers.
AnthonyMouse · 2h ago
If you have a huge omnibus bill that has a good thing that the representative's constituents want, and then a mountain of burning trash attached to it, and the representative votes for the bill, they can defend the vote as getting the thing their constituents wanted.
If you make them each a different bill and then the constituents want to know why they voted in favor of the hot garbage by itself, how can they answer?
Thorrez · 3h ago
Is the girl in the picture going to lose coverage? If yes, what part of the OBBB is going to remove her coverage? If not, then why go into all this detail about her if she's going to keep her coverage?
phtrivier · 3h ago
It was floated a few weeks ago they this tax break's disappearance was responsible for mass lay offs in tech.
Other theory were AI and interest rates.
I'm pretty sure next rounds of layoffs will have another "good reason".
Personally, I'm still partial to my pet and hard to document theory of "when headcounts go down, share prices go up - and past a certain size and age, the goal of a massive corporation is not to build things any more, but to pay for retirements through the resale / buybacks of shares"
But, hey, BBB is singed, so everything will be awesome soon, I suppose ?
empathy_m · 2h ago
Hey hey, maybe it will help job stability.
Gergely Orosz, whose writing is influential in tech spheres and fun to read, has been a loud proponent of the theory that TCJA's elimination of the immediate expense of R&D research cost was the skeleton key explaining technology sector layoffs.
It seems to me to that many technology-industry trends are driven by vibes:
* People seem to love reading articles in any kind of media source about their company's products and are remarkably credulous of them / influenced by their content. Not just PR generating roundup reports of media coverage, this is also engineers and leaders who follow any coverage of their firms quite closely.
* There really does seem to be a sort of contagion effect with layoffs where, once one firm began doing it, everyone did (layoffs.fyi has a lot of data supporting this kind of hypothesis)
* Among founders and engineering leaders, there does seem to be a common set of ideas - not just the group-chat consensus that helped kill SVB, but just an overall whisper network of facts that everyone knows is true - which guide their choices.
Overall it seems reasonable for software-industry employees to hope a narrative takes hold like "we had to lay off lots of people because their headcount didn't pencil out during the annual FP&A cycle under the new TCJA R&D rules, but now that the new law has restored immediate R&D expensing the formula is going to make the opaque headcount number higher, and jobs will be more stable". The idea might even become true if enough people believe it.
Personally I think the layoffs are better explained by another phenomenon, superpersuasion from AI. (My niche view is that the first superpersuader success story was when the chatbots convinced business leaders to reallocate resources to buying more GPUs and LLM tokens and lower investment in the rest of their lines of business.)
grumple · 50m ago
This tax issue (not a break - normally you can count employees as a businesss expense for the current year, this made software unusual) meant that startups or other tech companies were extremely disadvantaged in the short term, and had to pay way more in taxes than they should have. For startups, having to pay far more in taxes during the first few years of existence is crippling.
This fixes that problem. That encourages both investment in software and encourages software companies to hire.
0xbadcafebee · 6h ago
The elimination of green energy incentives is going to have a big negative effect on the economy. Those billions of dollars not only were going to new businesses and jobs, but they were joined with loans from banks and commitments from customers with the expectation that the government would be funding the remainder. This means private industry and banks will be shouldering the loss of hundreds of billions of dollars, which, as any astute person should know by now, later gets shouldered by the average citizen in rate hikes, stock market plunges, increased inflation, etc. There goes your job and 401k and here comes more expensive products.
Aside from the direct negative effects: we lose even more to foreign countries who now have even more runway to gain expertise in green energy and sell to everyone else investing in it. Nobody but the 3rd world is increasing investments in coal/oil and there's no money we could make there anyway. So there goes any money we could've made on energy internationally.
Either this country is intentionally being tanked, or we're in the stupidest timeline.
jimmydorry · 6h ago
The largest competitor to US renewables, would be China. They have been rolling back their subsidies for years. [1]
China, India, Russia, Turkey, Japan, South Korea, and Indonesia (off the top of my head, and a quick google to add a few I missed [2]) have all increased investments into coal since 2020.
The renewable industry in the US was wrought with companies seizing as many renewable credits and subsidies as they can, while providing as little as possible to show for them. If this moves the industry as a whole to focus on projects that are not just marginal at best, we should start to see better traction on projects that actually matter.
We have long been told that renewables are cheaper in every way that matters, so let's see the economics of that play out.
China has been rolling back subsidies because they won solar panels. No other country is even remotely close to market strength as China here and obviously for Chinese it makes sense to reduce incentives but does that make sense for the US which has 1% of this market power?
> Between January and May, China added 198 GW of solar and 46 GW of wind, enough to generate as much electricity as Indonesia or Turkey [1]
Any green energy project that isn't nuclear is a waste of money and resources. Nuclear is now being pursued in earnest by the tech industry itself. There's no problem here.
cheema33 · 4h ago
> Any green energy project that isn't nuclear is a waste of money and resources.
Nuclear's cost/megawatt is significantly higher than most other options. If anybody is reaching for nuclear it is because they are using up all available capacity through other means. Nobody picks nuclear for cost reasons.
AnthonyMouse · 2h ago
Data centers are a pretty good match for nuclear because they run 24/7 and use a fairly constant amount of power. Solar is cheap in terms of amortized price per kWh but then you need some other solution to supply power at night or when it's cloudy, and the price of that has to be paid on top of the cost of solar.
Meanwhile nuclear costs what it does in significant part because the number of new plants is low which requires the cost of designing new reactors etc. to be amortized over fewer plants. But if you build more of them that changes.
cbg0 · 2h ago
I suspect that in the US nuclear is being pursued by the tech industry due to the current administration, if Biden were still in the White House, the tech industry would be pushing for offshore wind and solar panels.
Nuclear is expensive and requires red tape and a long time to bring online, but the real benefit is that it can deliver power consistently all day, unlike wind and solar. I think the ideal future includes all of these plus better storage capabilities.
saubeidl · 4h ago
Nuclear is by far more expensive than other green options.
nandomrumber · 6h ago
What evidence is there of governments being more successful at picking winners than the market?
Governments should stay out of the winner-picking business, which they do with money from the public purse, and allow individuals and enterprise to use their own money to have a go at picking winners themselves.
If industry and banks find investment in any particular field unpalatable without Government incentive, then those investments were unpalatable to start with.
Industry and banks will find something better to do with their money.
ChromaticPanic · 5h ago
This isn't a game so it's not about picking winners. It's about steering the economy so local businesses get an advantage over foreign entities.
nandomrumber · 5h ago
By all means, have government get out of the way so the economy can get on with it.
I'm more in favour of tax incentivised encouragement, lowering the barriers to entry, and more so when there are proven benefits to the economy and society, and less in favour of government backed loans and direct cash injection.
jnfno · 5h ago
What evidence is there those with capital/the market are making the best engineering and science based decisions and not just juicing their portfolio because they’ll be dead when shit hits the fan?
raverbashing · 5h ago
Cool, cut all the oil subsidies, and road subsidies, and let the market decide
nandomrumber · 5h ago
Did you know if you run a business (carry on an enterprise) the majority of the costs of doing business are tax deductible.
That's another term subsidised.
I'd argue fossil fuel industry subsidies are a net benefit to society as they help enable cheap reliable energy.
Whereas renewable subsidies are a net negative because they don't. Everywhere more renewables have gone electricity has become more expensive and less reliable, completely antithetical to strong industrial development.
Also, renewables seem to be driven forward largely due to a psychological contagion that a climate apocalypse is nigh, which is turning out to be completely toxic, especially to the minds of the next generations.
tired-turtle · 4h ago
> Everywhere more renewables have gone electricity has become more expensive and less reliable, completely antithetical to strong industrial development.
Have you heard of Washington state? 75% renewable energy and 10th percentile for the cost per kWh.
jandrewrogers · 4h ago
Washington is a bit of a special case given that most of their electricity comes from vast hydroelectric resources constructed almost a century ago. That situation doesn’t generalize to other places. It is disingenuous to imply that this is an example relevant to modern energy policy.
jaybrendansmith · 5h ago
Sure, I'll bite. Will they invest in more coal and gas instead? And help cook the planet? You post as if you don't know what it's about, but of course you do. Disingenuous and contemptible.
umeshunni · 9h ago
The 2nd most annoying thing about section 174 was all the time you had to spend classifying each engineer's time spent as R&D or 'internal software'. At my last company, every year, me and my engineering lead counterparts would spent almost a day reviewing each engineer's JIRA tickets to reconstruct how much of their time was spent on R&D vs internal software.
supriyo-biswas · 9h ago
At a previous employer, they used to have this process where they would classify each project as being in active development or being in maintenance, and even the tiniest bit of development work required the "initiation" of a "project" with budget planning and approvals.
At the time I dismissed it as a bureaucratic process invented by the company; after all, they had no dearth of leaders adding bureaucracy to systems for the purpose of empire-building and, to a lesser extent, asserting self-importance. However, upon reading about Section 174, it made some sense, and I wonder whether they might just get around to removing these processes.
viraptor · 8h ago
> and even the tiniest of development work required the "initiation" of a "project" with budget planning and approvals.
That's fully automateable though, right? Sounds like my script to upload a PR, create a JIRA ticket with the same name, link them up, auto-Done on merge.
samrus · 6h ago
You cant automate the tactical assessment of "do we want to incur this tax?" Not easily anyway
supriyo-biswas · 4h ago
At the company I was speaking of, the business approval step involved many internal (and sometimes external meetings) and preparation of a feature and OKR document.
While this was the obvious way of doing things there, without this project step I also don’t think it’d have been regarded as a valid classification step for tax purposes.
Cipater · 4h ago
>was all the time you had to spend classifying each engineer's time spent as R&D or 'internal software'
> every year, me and my engineering lead counterparts would spend almost a day
This is quite funny. Not even a day, almost one.
monster_truck · 3h ago
Why would you waste time doing this when you could just make shit up?
And just to clarify, that has been the MO any time I've been told to do this. If it's actually important they wouldn't want your numbers
archagon · 4h ago
Oh, goody!
Also, ICE has a bigger budget now than most of the world's militaries[1]. But let's not talk about that.
That (initially) $175 billion/year will pay for itself in forced labor. I think most countries with large-scale systems of concentration camps converged on that solution, when the costs of those systems ballooned into something unsustainable.
Modern China has that. Their system makes use of their (reportedly millions) of incarcerated Uyghurs as low-skill forced labor, mainly in textiles/clothes. Few talk about it, but a significant fraction of Western clothing comes out of these camps.
The 1940's Germans were efficient: in extremis, they realized you could optimize value from concentration camps by starving the workers to death, extracting value from the final months of their lives with minimal operating costs. That was "extermination through labor".
Hacker News, being what it is, will be most focused on the impact on their 401k's. Their grandchildren will read these comments.
saubeidl · 4h ago
An organization of goons who grab people off the street and disappear them to concentration camps? Why does that sound so familiar?
Capitalists have always been involved in the rise of fascist movements.
drstewart · 2h ago
>Why does that sound so familiar?
Probably because you've seen it repeated so much in your hyper-propaganda bubble of reddit that you've started to believe it
saubeidl · 2h ago
I am Austrian. My entire education was dedicated to the rise of fascism and how it could happen and how to make sure it never happens again.
> They say, ‘It’s not so bad’ or ‘You’re seeing things’ or ‘You’re an alarmist.’
[...]
> "But the one great shocking occasion, when tens or hundreds or thousands will join with you, never comes. That’s the difficulty. If the last and worst act of the whole regime had come immediately after the first and smallest, thousands, yes, millions would have been sufficiently shocked—if, let us say, the gassing of the Jews in ’43 had come immediately after the ‘German Firm’ stickers on the windows of non-Jewish shops in ’33. But of course this isn’t the way it happens. In between come all the hundreds of little steps, some of them imperceptible, each of them preparing you not to be shocked by the next. Step C is not so much worse than Step B, and, if you did not make a stand at Step B, why should you at Step C? And so on to Step D.
drstewart · 2h ago
> They say, ‘It’s not so bad’ or ‘You’re seeing things’ or ‘You’re an alarmist.’
Ah, well in that case, it's clear to me Austria is actually the one on the brink of fascism. It's clear to me, having extensively eaten a lot of strudel (makes me an expert in Austria), that it's now a fascist country.
And if you say: ‘It’s not so bad’ or ‘You’re seeing things’ or ‘You’re an alarmist.’ then clearly you're just in denial.
saubeidl · 2h ago
You've lost me. I'm not sure what you're trying to say here, could you rephrase your point in a more coherent way please?
But also, yes, Austria was on the brink of fascism not too long ago. Our far-right party almost got to form a government and their plans were quite sinister.
Thankfully, disaster was averted due to egos and greed - the far-right and center-right couldn't agree on who gets to pilfer to country more, so they didn't end up forming a coalition.
AnthonyMouse · 1h ago
This argument has a problem:
> They say, ‘It’s not so bad’ or ‘You’re seeing things’ or ‘You’re an alarmist.’
It provides no way to distinguish between when the thing is happening and when it isn't. If people say you're an alarmist, by what mechanism do you evaluate whether they're correct?
dambi0 · 1h ago
Which is just as true of the argument
> Probably because you've seen it repeated so much in your hyper-propaganda bubble of reddit that you've started to believe it
saubeidl · 1h ago
And that is exactly the mechanism through which fascist regimes keep resistance down and dissenters in a state of self-doubt.
People like the guy accusing me of being "hyper-propagandized" knowingly weaponize this uncertainty to become willing enablers.
AnthonyMouse · 1h ago
You didn't actually answer the question.
It's like making the argument that denying an accusation is evidence that it's true. It's rubbish because people would also deny it if it was false.
drstewart · 2h ago
Your entire argument boils to the fact that you live in Austria and that makes you an expert on fascism and if anyone tries to refute you then it immediately means they're in denial.
Which is, of course, non-sensical.
dambi0 · 1h ago
That isn't true at all. Some of the argument relies on the experience of an Austrian education, but we are also encouraged to refer to other provided sources if we choose to seek other opinions.
squarefoot · 1h ago
Italian here, and I know a few things about fascism not just because of that. Yes, what is happening in the US is the rise of a fascist state controlled by a small minority of very wealthy and powerful people purely for economical reasons with Trump being just a tool in their hands. As with happened in my country back then, there are only two possible reasons for endorsing it: being part of the cult, or being part of the club.
That's why I stopped long ago any attempt at reasoning with apologists.
saubeidl · 2h ago
I never said I live in Austria. I don't. But having grown up in Austria, the rise of fascism was the major theme of my entire education.
batty_alex · 1h ago
Really grabbing at straws to dismiss the evidence of your eyes and ears here, huh?
saubeidl · 1h ago
"Never believe that anti-Semites are completely unaware of the absurdity of their replies. They know that their remarks are frivolous, open to challenge. But they are amusing themselves, for it is their adversary who is obliged to use words responsibly, since he believes in words. The anti-Semites have the right to play. They even like to play with discourse for, by giving ridiculous reasons, they discredit the seriousness of their interlocutors. They delight in acting in bad faith, since they seek not to persuade by sound argument but to intimidate and disconcert. If you press them too closely, they will abruptly fall silent, loftily indicating by some phrase that the time for argument is past." - Jean Paul Sartre.
nashashmi · 6h ago
This was the expense that was removed in the first Trump tax bill. Amazing how it takes another super tax bill just to get it through
bjoli · 1h ago
I'm not really that into US politics, but to me this bill seems like a gargantuan transfer of wealth to already wealthy people. How does this land with the people who voted for Trump outside of the traditional republicans? Can they finance it without raising the debt ceiling?
xvector · 4h ago
Thank jeebus.
rufus_foreman · 10h ago
Actual title is "House Passes Tax Bill Sending to President for Signature – Details Inside".
9283409232 · 9h ago
I think editorializing the title is fine in this case. The original headline is not descriptive and buries the part that would be relevant to HN.
tareqak · 8h ago
I came across the article on Techmeme, and they used the following title: “President Trump signs the One Big Beautiful Bill, which allows immediate deduction of US software labor; foreign R&D still must be amortized over 15 years”.
root_axis · 6h ago
I believe the impact of Section 174 has been vastly overstated, sadly we will soon observe this to be the case.
BobbyJo · 5h ago
What do you base that belief on?
autobodie · 5h ago
I would assume they think the cause of the layoffs was more related to the non-zero interest rate.
cheema33 · 4h ago
Nobody at my work knew anything about it. And we do have software engineers. I suspect only the very large orgs with expensive accountants were complying. And pay now vs later thing didn't really matter that much to them anyway.
doctorpangloss · 5h ago
Well who the hell was complying anyway?
qiine · 1h ago
Humans play games to learn, the more AI do the same the better they will get
“For purposes of this section, any amount paid or incurred in connection with the development of any software shall be treated as a research or experimental expenditure“
Page 303 of bill here https://www.congress.gov/119/bills/hr1/BILLS-119hr1eas.pdf
Original article about Section 174 tax code causing layoffs
https://news.ycombinator.com/item?id=44180533
Post from @dang with more info about Section 174
https://news.ycombinator.com/item?id=44226145
The TCJA (passed in 2017) already did that (effective 2022). So it sounds like this new bill is keeping that, but changing the deduction rules back to what they were before 2022.
See this previous discussion of the TCJA:
> all "software development" is now an R&E expense.
https://news.ycombinator.com/item?id=34627712
(AIUI, "R&D" (research and development) and "R&E" (research and experimentation) are synonyms.)
> there shall allowed as a deduction any domestic research and experimental expenditures which are paid or incurred by the taxpayer in the current taxable year
AFAIK, there was no domestic vs. foreign R&D distinction in section 174 before.
> 174 to require taxpayers to amortize specified R&E expenditures ratably over a five-year period for domestic expenditures and a 15-year period for specified R&E expenditures attributed to foreign research
https://www.journalofaccountancy.com/issues/2022/nov/amortiz...
No comments yet
Sure, foreign R&D still gets amortized over 15 years (NPV ≈59 % of a full write-off, so you “lose” ~8.6 % of your R&D spend in present-value terms, and only 6.7 % of the cost is deductible in year 1, creating a 19.6 % cash-tax gap). But offshore wages are often 50–70 % below U.S. rates:
• Even after the slower amortization drag, hiring at half the cost nets you ~30 % total savings on R&D headcount.
• On a pure cash basis you only need ~20 % lower wages to break even; most offshore markets easily exceed that.
• So the labor-cost arbitrage far outweighs the tax timing penalty unless your foreign salaries are less than ~20 % below U.S. levels.
In short: the 15-year amort rule hurts your tax deduction, but 50 %+ lower offshore wages more than make up for it.
On paper, offshoring has made sense the entire time, and yet here we are in 2025 and companies still hire American devs. Not only that, they often fly in foreign devs just to pay them more here than if they had just offshored to their home country.
There are many reasons: It’s difficult to understand _intention_ when deprived of non-verbal communication and working in a choppy network call. Even if one can gloss over communication needs etc. there’s burnout looming around the corner and natural, healthy laziness getting into the way. Sometimes even internal politics might be blocking knowledge/access/contribution for more or less peculiar reasons.
It’s not like it’s impossible to hire remote engineer, yet my (completely unmetered) estimates out of experience is that approx. 10% of engineers willing to work remotely can sustain health (physical and mental) and be efficient outside of 1-2 years of honeymoon period.
There was some tumbling around COVID but IMO both stationary jobs and remote ones are doing well on mid-high quality positions.
I see lots of people thriving in remote. Main reasons being a huge increase in quality of life. Regaining 2-3 hours of senseless commuting time per day, getting small household chores done over lunch, not having to schedule repair and maintainance appointments in the weekends etc. is huge.
Now I do agree it is not for everyone. I see especially younger people living alone not coping to well. Part of the reason is they (ab)used the office as a socializing place, and are not used to organizing a personal social life outside work. There's also people that don't actually have much work outside of attending office meetings, and nobody thrives sitting in Teams calls all day.
Then there's also real downsides. Some people living in shoebox appartments in the city just do not have the space. W While work can be done (more?) efficiently remote, but carreer climbing needs in person contact. It's like dating. Real dinner or a video call? No comparison.
Best of both worlds would be 0 commute time to a luxurious private office inside the company premises. All the rest will be tradeoffs and compromises either way.
I've worked most of my career as a remote employee and I can say that the best arrangement is when the company is as involved in hiring offshore employees as they are with hiring onshore ones. Someone working through an intermediary will always be disconnected from the company's success, as they work for an outsourcing company, and not the US corporation itself.
There are definitely a lot of discussions to be had around employee cultural fit, and I don't just mean company culture. You want a similar mindset and work ethic that your other employees have if you want a high chance of success.
We also need to talk about how some companies haven't been able to successfully adapt their processes to work with remote employees alongside the office employees and sometimes treat the offshore ones as second class citizens, which is not really a great thing.
The issues of quality and whatnot are at their core racist IMO but are made real because of the timezone issue. The norms and culture expected in the home time zones don’t translate easily and result in an impedance mismatch and a different measure of “good.” Because the remote team is isolated and unempowered they always struggle to adopt the standard of the team and to some extent can’t ever succeed in the quality space as it’ll be an ever shifting goalpost whose reasoning is effectively hidden. Then layer in the latent resentment on both sides and the whole situation is bound to fail, but the home teams have the advantage of being resident with the only management that matters.
I wish everyone involved would realize the experiment has failed. But CFOs are too powerful in most companies large enough to reasonably pull off outsourcing at all and the need for the CEO to please boards and investors who just operating off the financial statements and HBR white papers are too disconnected for why these efforts fail.
Unfortunately the current persecution of immigrants in the US will drive these arrangements more and more. Rather than on shoring local foreign talent with the collocated team, foreign talent will opt to avoid the fear society being birthed. This will lead to a strong incentive to follow talent to their home country leading to more imbalance in talent disoriented time zones. Maybe this would require everyone to figure out the above issues but I seriously doubt it. I think it’ll just make everyone less effective and not achieve anything positive for anyone.
I'm in Europe now and it definitely is easier to set up calls with my South African colleagues than the American ones.
Americans have a... distinct work culture and companies - local and foreign - are not stupid, so nowadays they aim for the 50-75 percentile in terms of compensation.
On top of that you absolutely need to be fluent in English, which disqualifies half the candidates right off the bat.
All this combined makes it not obvious whether one would want to/could work for an American company - particularly if it's through various middlemen.
US used to be 100% worth it, but over the course of the last 25 years the ratio of GDPs per capita between USA and my country fell from 5.5 to around 3.75 and compensation naturally followed.
Lastly, the dollar fell 15% since the start of 2025 against my country's currency and that has had an effect on available openings.
Another way to look at it: If your country was much richer than the US the model would be flipped. Do you think Americans would post a similar generalisation here? Yep. Not much being said.
10, 100 or 500 people team in India who could work in the office together was possible forever.
It will change. I think once other countries become bigger investment centres. Not sure how yet though. US is a good potting soil for a startup because there is this huge addressable and free market. And the startup ecosystem. Then add in that most startups want WFO and minimum synced time zones... and for larger tech all that specialism is in house in the US.
As a EU senior dev I know zero senior devs making six figures pa - Go figure
I'm still stunned when I see what devs are paid in Germany and southern Europe though.
Other countries should use this when retaliating.
Not all countries will see that as a problem.
Offshoring is far older than the pandemic.
There is ofc some difference but if you are taking averages you will have much better engineers in a company based in nyc vs berlin.
I’m not an expert but this has been very apparent in places I worked, US based companies just had a better work setup and everything moved faster and with higher quality.
As an example, just saying an engineer is quarter the price in Turkey so you can just outsource there is very foolish. It just doesn’t work that way, maybe in wet dreams of CEOs only.
Similar thing with LLMs, some people are salivating over how they won’t need developers but it just isn’t that way yet.
Seeing how hungry businesses are for outsourcing and hiring remote, and seeing how it isn’t really working that way should be concrete proof for this.
Plus this puts pressure on manufacturing, as they will not be able to compete. So yeah, as a tool to boost knowledge economy it works but is it objectively a good thing to do I don't know.
> Companies with capitalized domestic R&D expenses from 2022–2024 can elect a catch-up deduction, which could significantly improve cash flow for firms engaged in innovation.
But when a forest is cut, usually a new forest that grows on that place looks different.
The US Congress is practically able to pass only a single giant bill every year. To work around its own deficit rules, these bills are packed with taxation time bombs where rules have expiration dates or delayed starts several years in the future.
Then, if Congress doesn’t get around to defusing its own time bombs, you get situations like this R&D expensing fiasco where American businesses and employees pay the price. Unless the bomb is hopefully retroactively cancelled, like happened now.
On top of this madness, there’s an executive branch operating like a runaway autocracy, producing a flood of executive orders that intentionally flaunt laws and even target specific private entities (e.g. Trump’s attacks on law firms that worked for his opponents, and universities he doesn’t like).
How long can a nation function like this? If the bond market loses faith in this process, there could be mayhem. Will be interesting to see if the passage of BBB impacts US debt when markets open again on Monday.
No, and lots of controversial bills have passed other than as reconciliation bills, and especially so during trifectas where they "controversial" within the minority party but broadly supported by the majority; reconciliation is necessary to pass something that strains unity in the majority party and is uniformly opposed by (not "controversial to") the minority party, perhaps.
I wouldn't like what the current congress would do without the filibuster, but at this point a paralyzed system might be worse.
All of these except the first two were bipartisan and got 60 Senate votes (or more)
It does seem like things are trending toward less public laws passing over the last decade, as well as record low time in session and other congressional activity.
https://www.congress.gov/bill/118th-congress/senate-bill/870...
A lot of what happens in Congress is obvious to do and everyone agrees. While the media certainly focuses on the handful of things the two parties are at odds over, most of the lawmaking done by Congress is not controversial between parties, and is simply passed, so we don't hear about it.
Because both parties are scared eventually the other party will be back in the majority.
In particular it gives people permission to vote for a candidate they like but don't expect to be able to win.
By having a bunch of random provision in BBB that generate revenue it lowers it's impact on the defect and then you can repeal them later on after passing BBB.
This is indicative of ignorance. There is a reason why we have these rules.
The recent (-ly undone) change went against decades of how things were, was crippling for medium size cashflow-positive startups, effectively increased taxes, etc. But it was really just a straightforward application of the general principles that apply to most everything else.
The error was in reconciling them by getting rid of it for software R&D instead of allowing other business expenses to be deducted when they're paid for as well.
For large stable incumbents that have the same expenses every year, the difference doesn't matter except in the first years after you make the change, because it doesn't matter if you deduct all of this year's expense this year or 5% of each of the last 20 years' expenses this year, they add up to the same deduction every year.
Where it matters is for new challengers, because they don't have arbitrarily many years worth of legacy expenses to deduct, so their deduction in their first year will be less than their incumbent competitor's.
It also creates a disincentive (or competitive disadvantage) to increase long-term investments. If some existing company had been making a $5M investment every year but is now facing new foreign competition and needs to increase it to $10M in order to stay competitive, they're in the same position as the upstart. Moreover, then they may not be able to do it, because they were going to have to run lean and divert the $5M profit they usually make to increasing their capital investments, but then the government is expecting tax on most of that $5M which means they can't spend it this year it even though it's ultimately a deduction.
Notice what this does specifically in the case of real estate: If rents start going up the normal incentive is to build new housing, but now you have to put out all the money to build a new building in year 0 and not get to deduct it for decades. Is that the incentive we want? Probably not.
This applied to salaries, it wasn't a capital expenditure as "capital expenditure" has traditionally been defined.
This was an operational expense.
The point is that building a piece of software that is going to be in use for several+ years is creating an asset. It just goes against our intuition since this industry is so driven by fast fashion, and the bookkeeping of specific components, their depreciation schedules, early end of life, (etc) seems like needless complexity.
You can expense such time as opex, but it has to be justified, and that's often difficult to do. Did you fix a bug by refactoring some code to avoid the problem? Is that capex or opex? Can you convince the IRS of such?
The old (and now new) rules eliminated this accounting game and uncertainty.
For example if you pay someone to fix a leaky roof and they replace a section of a given size, can you call it a repair/maintenance expense or should you be depreciating it as an improvement to the building? Can you convince the IRS of such? The only reason this has more straightforward answers is that accountants have been answering this question longer.
At this moment, the law came back to 1-year deprecation.
The rest is coming up with SDDs and reviewing AI’s code.
I can easily see most devs, doctors and lawyers automated away in the next couple of years.
Even a perfect eval loop like failing tests end up 80% of the time with them creating something way too complicated since they solve one visible but not root issue at a time and build on top of that hacky foundation until again I end up reverting it all
You can tell it “implement feature X” and it’ll go and do whatever’s easiest for it, often something dumb, that’s when people usually think “it’s dumb, won’t replace devs” and give up. Or you can nail down your requirements by talking to it and describing what you’re looking for, often it comes back with things you hadn’t considered or ways of doing things you didn’t know. Then just tell it “implement this SDD” and watch it one shot it in an hour or so.
There’s also pain points - some languages like Swift have changed so often and there’s little open source code to train on out there, so it’s on the worse side if you do iOS development.
It’s a new skill that needs working at, but in the end your output is significantly increased.
I am overemployed with 3 dev jobs at once. AI is writing virtually all my code and letting me nap all day. Eventually that will end once people see the power of them.
And even with reviews you can currently plausibly automate only the code correctness check part, the juicy part of reviews is always manual testing of the change and doing the logical reasoning if the change is doing a meaningful thing. And no, the ticket with the spec is not a reliable source of this info for an LLM as it's always just a partial understanding of the concept.
Software developers do X and Y. AI thing can now do X, so it's used for that, and it's cheaper, so the number of projects increase because you get more demand at a lower price. Those projects each need someone to do Y.
And I agree. Because ultimately we don’t need that much code in the first place. We need robust data sets.
AI models will enable the data driven machine state dream. Chips that self improve models will boot strap from them and rely on humans to iteratively improve updates.
Coding like it’s 1970 in the 2020s and beyond is not that high tech.
This "solution" is to a problem the GOP created themselves during Trump's first term, when they made the R&D deduction stuff expire in 2022.
Seriously, that seems unlikely.
Changes like this may have an impact on employment but it’s impossible to observe the results in a vacuum.
Given that most large companies are towing the “AI means less jobs required” line, it seems likely that this will, at best, modestly slow the rate at which companies divest themselves of software developers.
I cant see any reasonable reason, in a broader context, this would have a meaningful impact.
(Yeah yeah, AI means more jobs one day maybe, but right now that is categorically not true, and the future is always pure speculation, but in the near term, the impact of this seems like it probably wont be material to me; maybe a small reduction in the number of layoffs)
But offshore wages are often 50–70 % below U.S. rates:
• Even after the slower amortization drag, hiring at half the cost nets you ~30 % total savings on R&D headcount.
• On a pure cash basis you only need ~20 % lower wages to break even; most offshore markets easily exceed that.
• So the labor-cost arbitrage far outweighs the tax timing penalty unless your foreign salaries are less than ~20 % below U.S. levels.
In short: the 15-year amort rule hurts your tax deduction, but 50 %+ lower offshore wages more than make up for it.
Huh? Not even regular minimum wage is indexed to inflation. What are you talking about?
Edit: Oh you mean costs in general, not in the context of section 147
If you hire H-1B you should be required to pay a fee greater than it costs to educate an equivalent American. Otherwise you're always in the situation where you have to hire foreigners because no Americans are trained. (or in reality you hire foreigners because they're cheaper for the same role which this no longer makes it the case)
Poor dudes are like ' this is my chance to make it in America' and the high caste indian management treats them like dirt.
The 'old boomers yelling at young people' is a myth in professional America compared to the absolute screaming insults you'd hear hurled at these guys.
And if they messed up? boom, gone, next guy flown in.
3.5% remittance fees on sending money out of the US: https://www.globalimmigrationblog.com/2025/06/what-are-the-i...
Also (in above source), no ACA subsidies for H-1B visa holders (and others), which likely means employers they will have to pay more for health care if they want to cover their immigrant workers
> Expansion of Immigration Fees:
> $1,000 asylum application fee — first in U.S. history
> $1,000 fee for individuals paroled into the U.S.
> $3,500 fee for sponsors of unaccompanied children
> $5,000 fee for sponsors of unaccompanied children who fail to appear in court
> $550 fee for work permits
> $500 application fee for Temporary Protected Status (TPS)
> $400 fee to file a diversity immigrant visa application
> $250 fee to register for the Diversity Visa Lottery
> $250 visa integrity fee
> $100 year fee while asylum applications remain pending
> $100 fee for continuances granted in immigration court
> $5,000 fee for individuals ordered removed in absentia
> $1,500 fee to adjust status to lawful permanent resident (green card)
> $1,050 fee for inadmissibility waivers
> $900 fee to appeal a decision by an immigration judge
> $900 fee to appeal a decision by DHS
> $1,325 fee to appeal in practitioner disciplinary cases
> $900 fee to file motions to reopen or reconsider
> $600 application fee for suspension of deportation
> $600 application fee for cancellation of removal (permanent residents)
> $1,500 application fee for cancellation of removal (non-permanent residents)
> $30 fee for Form I-94 (arrival/departure record), up from $6
The Senate made a lot of changes (Byrd rule also nuked a lot of stuff) so old articles are of limited use to the final bill.
I don't even know if [2] is the actual final text as there is neither an enrolled or public law version on congress.gov yet.
It's super annoying how often we can't read the final text of a bill before Congress votes on it.
[1] https://www.congress.gov/bill/119th-congress/house-bill/1/te...
[2] https://www.congress.gov/bill/119th-congress/house-bill/1/te...
The version of the bill that passed a 1% excise is applicable "only to any remittance transfer for which the sender provides cash, a money order, a cashier’s check, or any other similar physical instrument".
This fixes the problem, so now if you spend $100 on software developers, and you make $100 from the software, then you have $0 income, instead of $80 income.
https://news.ycombinator.com/item?id=44180533
more info here too
https://news.ycombinator.com/item?id=44226145
Weird how the depreciation schedule changes based on how the software was acquired.
Econ 101: A government deficit increases the net financial worth of the private sector.
The US usually increases the net financial worth of the private sector by around $2tn per year, OBBB should move that to around $3tn per year (CBO estimate https://www.cbo.gov/publication/61486)
If you accumulate a dollar per second in net worth, then you become:
Obviously an indiscriminate increase in money without a corresponding increase in output will show up in inflation.So it's a wealth transfer, from those whose financial affairs will remain comparatively static (your dollar will be worth less via inflation) to those who can capture the new money streams.
The popular story currently is that the massive layoffs were due to the tax/accounting change, but in that case why the big players like Amazon etc have so many layoffs? Or is that the popular story because, while Amazon etc are large, by total employee count most people are employed at smaller business that were more affected by this?
Or was the FAANG stuff actually AI after all? The tax change story sounds more plausible to me but I can't connect everything.
I have discussed this topic with many other engineers (known from engineering school, from working 13+ years in the Paris tech startup ecosystem and from my worker union, whose scope include most tech companies) and I have never heard any of them saying they did not write bullshit CIR reports for bullshit projects. I have myself written my fair share of those bullshit reports. There are even companies whose business is to write the bullshit reports for you in exchange for x% of your CIR credit. I worked with such company.
If so, it sounds almost too good to be true. Why aren't all startups in Canada?
We adopt new products less. We are far more risk averse about purchasing goods or services from startups, far more risk averse about funding them (founders often give personal guarantees to get the investment), value the equity startups offer at far less, etc. Government is far more fussy about accountability with that refundable R&D money, so lots of time is spent filling out paperwork and hiring consultants to do it.
Here is a video that explains a lot about Canadian purchasing:
https://www.cbc.ca/player/play/video/1.4596459
The systems are different, but saying they are completely different is really a stretch. There's a GST that the US doesn't have, which is, ironically, a regressive tax. If you ranked the tax code of countries by similarity to the US tax code, I'm not sure Canada would be at the top of the list, but it wouldn't be that far down.
Well, imagine if instead we were _incentivized_ to create lots of bugs in huge releases, because it helped us ship that one important feature that the PM wanted in the middle of the garbage - and also, that we were guaranteed never to have to debug the software ever, and god forbid, to use it ?
This is going to make a lot of people's lives a lot worse and I'm against it even though it's an absurd windfall for me and people like me.
Everyone's BATNA just skyrocketed. What you choose to do with a huge surge in your pricing power is up to you, but you have it.
There is no reason to have cognitive dissonance over it.
two counteracting forces:
The senate parliamentarian decided they could be in the reconciliation bill
and outside of the reconciliation bill, believe it or not, Congress does pass other bills over the 60 senate vote threshold
This R&D one would be a decent candidate
If you make them each a different bill and then the constituents want to know why they voted in favor of the hot garbage by itself, how can they answer?
Other theory were AI and interest rates.
I'm pretty sure next rounds of layoffs will have another "good reason".
Personally, I'm still partial to my pet and hard to document theory of "when headcounts go down, share prices go up - and past a certain size and age, the goal of a massive corporation is not to build things any more, but to pay for retirements through the resale / buybacks of shares"
But, hey, BBB is singed, so everything will be awesome soon, I suppose ?
Gergely Orosz, whose writing is influential in tech spheres and fun to read, has been a loud proponent of the theory that TCJA's elimination of the immediate expense of R&D research cost was the skeleton key explaining technology sector layoffs.
It seems to me to that many technology-industry trends are driven by vibes:
* People seem to love reading articles in any kind of media source about their company's products and are remarkably credulous of them / influenced by their content. Not just PR generating roundup reports of media coverage, this is also engineers and leaders who follow any coverage of their firms quite closely.
* There really does seem to be a sort of contagion effect with layoffs where, once one firm began doing it, everyone did (layoffs.fyi has a lot of data supporting this kind of hypothesis)
* Among founders and engineering leaders, there does seem to be a common set of ideas - not just the group-chat consensus that helped kill SVB, but just an overall whisper network of facts that everyone knows is true - which guide their choices.
Overall it seems reasonable for software-industry employees to hope a narrative takes hold like "we had to lay off lots of people because their headcount didn't pencil out during the annual FP&A cycle under the new TCJA R&D rules, but now that the new law has restored immediate R&D expensing the formula is going to make the opaque headcount number higher, and jobs will be more stable". The idea might even become true if enough people believe it.
Personally I think the layoffs are better explained by another phenomenon, superpersuasion from AI. (My niche view is that the first superpersuader success story was when the chatbots convinced business leaders to reallocate resources to buying more GPUs and LLM tokens and lower investment in the rest of their lines of business.)
This fixes that problem. That encourages both investment in software and encourages software companies to hire.
Aside from the direct negative effects: we lose even more to foreign countries who now have even more runway to gain expertise in green energy and sell to everyone else investing in it. Nobody but the 3rd world is increasing investments in coal/oil and there's no money we could make there anyway. So there goes any money we could've made on energy internationally.
Either this country is intentionally being tanked, or we're in the stupidest timeline.
China, India, Russia, Turkey, Japan, South Korea, and Indonesia (off the top of my head, and a quick google to add a few I missed [2]) have all increased investments into coal since 2020.
The renewable industry in the US was wrought with companies seizing as many renewable credits and subsidies as they can, while providing as little as possible to show for them. If this moves the industry as a whole to focus on projects that are not just marginal at best, we should start to see better traction on projects that actually matter.
We have long been told that renewables are cheaper in every way that matters, so let's see the economics of that play out.
[1] https://www.reuters.com/business/energy/china-roll-back-clea...
[2] https://ember-energy.org/latest-updates/wind-and-solar-repla...
> Between January and May, China added 198 GW of solar and 46 GW of wind, enough to generate as much electricity as Indonesia or Turkey [1]
1 - https://www.theguardian.com/world/2025/jun/26/china-breaks-m...
Nuclear's cost/megawatt is significantly higher than most other options. If anybody is reaching for nuclear it is because they are using up all available capacity through other means. Nobody picks nuclear for cost reasons.
Meanwhile nuclear costs what it does in significant part because the number of new plants is low which requires the cost of designing new reactors etc. to be amortized over fewer plants. But if you build more of them that changes.
Nuclear is expensive and requires red tape and a long time to bring online, but the real benefit is that it can deliver power consistently all day, unlike wind and solar. I think the ideal future includes all of these plus better storage capabilities.
Governments should stay out of the winner-picking business, which they do with money from the public purse, and allow individuals and enterprise to use their own money to have a go at picking winners themselves.
If industry and banks find investment in any particular field unpalatable without Government incentive, then those investments were unpalatable to start with.
Industry and banks will find something better to do with their money.
I'm more in favour of tax incentivised encouragement, lowering the barriers to entry, and more so when there are proven benefits to the economy and society, and less in favour of government backed loans and direct cash injection.
That's another term subsidised.
I'd argue fossil fuel industry subsidies are a net benefit to society as they help enable cheap reliable energy.
Whereas renewable subsidies are a net negative because they don't. Everywhere more renewables have gone electricity has become more expensive and less reliable, completely antithetical to strong industrial development.
Also, renewables seem to be driven forward largely due to a psychological contagion that a climate apocalypse is nigh, which is turning out to be completely toxic, especially to the minds of the next generations.
Have you heard of Washington state? 75% renewable energy and 10th percentile for the cost per kWh.
At the time I dismissed it as a bureaucratic process invented by the company; after all, they had no dearth of leaders adding bureaucracy to systems for the purpose of empire-building and, to a lesser extent, asserting self-importance. However, upon reading about Section 174, it made some sense, and I wonder whether they might just get around to removing these processes.
That's fully automateable though, right? Sounds like my script to upload a PR, create a JIRA ticket with the same name, link them up, auto-Done on merge.
While this was the obvious way of doing things there, without this project step I also don’t think it’d have been regarded as a valid classification step for tax purposes.
> every year, me and my engineering lead counterparts would spend almost a day
This is quite funny. Not even a day, almost one.
And just to clarify, that has been the MO any time I've been told to do this. If it's actually important they wouldn't want your numbers
Also, ICE has a bigger budget now than most of the world's militaries[1]. But let's not talk about that.
[1]: https://www.newsweek.com/immigration-ice-bill-trump-2093456
Modern China has that. Their system makes use of their (reportedly millions) of incarcerated Uyghurs as low-skill forced labor, mainly in textiles/clothes. Few talk about it, but a significant fraction of Western clothing comes out of these camps.
The 1940's Germans were efficient: in extremis, they realized you could optimize value from concentration camps by starving the workers to death, extracting value from the final months of their lives with minimal operating costs. That was "extermination through labor".
Hacker News, being what it is, will be most focused on the impact on their 401k's. Their grandchildren will read these comments.
Capitalists have always been involved in the rise of fascist movements.
Probably because you've seen it repeated so much in your hyper-propaganda bubble of reddit that you've started to believe it
I know what I'm seeing.
Don't believe me? What about subject matter experts that decided to flee the country? https://www.nytimes.com/2025/05/14/opinion/yale-canada-fasci...
Or how about an excerpt from a book written based on post-WW2 interviews of Germans? Does any of that sound familiar at all? https://press.uchicago.edu/Misc/Chicago/511928.htm
> They say, ‘It’s not so bad’ or ‘You’re seeing things’ or ‘You’re an alarmist.’
[...]
> "But the one great shocking occasion, when tens or hundreds or thousands will join with you, never comes. That’s the difficulty. If the last and worst act of the whole regime had come immediately after the first and smallest, thousands, yes, millions would have been sufficiently shocked—if, let us say, the gassing of the Jews in ’43 had come immediately after the ‘German Firm’ stickers on the windows of non-Jewish shops in ’33. But of course this isn’t the way it happens. In between come all the hundreds of little steps, some of them imperceptible, each of them preparing you not to be shocked by the next. Step C is not so much worse than Step B, and, if you did not make a stand at Step B, why should you at Step C? And so on to Step D.
Ah, well in that case, it's clear to me Austria is actually the one on the brink of fascism. It's clear to me, having extensively eaten a lot of strudel (makes me an expert in Austria), that it's now a fascist country.
And if you say: ‘It’s not so bad’ or ‘You’re seeing things’ or ‘You’re an alarmist.’ then clearly you're just in denial.
But also, yes, Austria was on the brink of fascism not too long ago. Our far-right party almost got to form a government and their plans were quite sinister.
Thankfully, disaster was averted due to egos and greed - the far-right and center-right couldn't agree on who gets to pilfer to country more, so they didn't end up forming a coalition.
> They say, ‘It’s not so bad’ or ‘You’re seeing things’ or ‘You’re an alarmist.’
It provides no way to distinguish between when the thing is happening and when it isn't. If people say you're an alarmist, by what mechanism do you evaluate whether they're correct?
> Probably because you've seen it repeated so much in your hyper-propaganda bubble of reddit that you've started to believe it
People like the guy accusing me of being "hyper-propagandized" knowingly weaponize this uncertainty to become willing enablers.
It's like making the argument that denying an accusation is evidence that it's true. It's rubbish because people would also deny it if it was false.
Which is, of course, non-sensical.