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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“

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

>It also classifies software development as R&D

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.)

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.

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

https://www.journalofaccountancy.com/issues/2022/nov/amortiz...

That's nuts

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.

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.

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.

I have nearly 3 decades (ugh…) now of forming fully remote startups and working remotely.

It used to be totally non-controversial and completely validated by direct personal experience that only a minority of the population is built to work remotely. It’s so silly this is even an argument when our entire society and education is built on in-person interactions.

I think the 10% number is variable depending on the org you are hiring into. A company that was never built to be remote or put any thought into how information and communication systems must be different than office? 10% may even be high. A company built from first principles with lots of thought and intentional design behind business processes being remote only? Probably much too low. It will be reflected even in the types of personalities being hired on average.

If you reach for video calls as a solution to your remote companies communication issues you have completely failed and probably would be better served with fully on-premise. This would be the first question I would ask as an interviewee for a remote role. Any company regularly engaging or encouraging this means leadership is simply trying in the worst possible way to recreate an office environment and thus you can expect nearly everything else process based to be horribly broken for a remote company. I have some other “tells” as well, but this one stands out as the simplest as it displays a total disconnect with the reality of how to build remote teams. If you can’t function like a well ran open source project you are almost assuredly doing it wrong.

I read, wanted to reply but would only echo what you wrote. 100% agree.

Just a note that my 10% experience is based on general population of people who were working remotely for at least 6 months (and being a contractor I’ve switched orgs more often than average engineer)

100% agree with you both and I love the litmus tests mentioned!

Looks like big and small tech are mostly doing things wrong then?

Or is it just very difficult to scale?

What people forget is that making a good remote culture requires both the right people and a ton of intentionality. There are no unplanned interactions in the workplace that cause people to form more than a transactional relationship.

> It used to be totally non-controversial and completely validated by direct personal experience that only a minority of the population is built to work remotely.

I disagree with this. I beleive we just need better tools to support comfortable remote work. Big corporations are not interested in researching and developing such tools. And new innovative remote work tools like Virtual Frosted Glass (https://meetingglass.com/) have not yet gained widespread adoption.

My first remote position was in 2006 or so and I've been mostly remote since as I'm primarily a contractor.

I wouldn't agree that most people aren't built to work remotely, but I have always maintained that it is a skill that takes time to build. Which is why it's unfortunate that RTO happened so quickly.

Of course I always prefer remote work for companies in the same city. Being able to come in easily when necessary helps a lot.

> Of course I always prefer remote work for companies in the same city. Being able to come in easily when necessary helps a lot.

I wouldn't really call this "remote work" though. I know the terms are a little fuzzy.

My favorite option is incredibly selfish for me. I love working from home relatively close to an office I can come into at any time I wish. This requires everyone else working in the office on a daily basis so I can come in as my whims desire.

That is not remote work though. That's working remotely for an in-office organization and it only works if you are in the extreme minority in some special positions. Fully remote orgs with no offices whatsoever are a different beast entirely in my mind and require much different organization and communication setups.

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.

I can’t disclose details but I’ve been doing mentoring, screening and interviewing + screening for years and saw remote communities grow from 10s to 1000s.

What you’re saying is true especially in the honeymoon phase, but the running joke is that you don’t really live remote life unless solitude made you name a pigeon. I’ve seen careers of many of my peers and usually 5 years in people starts to seek on-site.

There’s another point to take into consideration though. In Europe commute is usually less than hour and for many morning routine is an opening to watch movies/read books/listen to music or podcasts. Some travel with friends so that’s a social occasion too. Given accounts of my US colleagues where it’s usually lone drive back and forth experience is different.

Yet remote means omitting or social events and being outsider in the most-social environment (especially for men). Even hybrid with one day is much better than completely remote.

What I found over the years is that no one can say what differentiates remote-able to non-remote. Quiet back-seat engineer can get depressed after year of remote and that guy who is always heart of the party can thrive in remote. It’s just… it wears people down quickly and problems are usually creeping. Back pains coming from tension. Working hours slowly inflating to compensate for extra 10 minutes spent on lunch, this one time when you are bored at 8pm because you are bored in front of computer so why not help someone.

Maybe I’m biased but I find situation that some people are remote and some aren’t to be a healthy one. This preserves local jobs while also making an opening for those who want to do remote work for any reason whatsoever. And this honeymoon period is good to check out if you’re fit for remote or not (and gives enough churn to provide opportunity to try).

I think it is really the commute that makes or breaks the office. My commute is 40 mins there and if I leave after 4pm itll take me an hour 15 to an hour 30 to get home. All in bumper to bumper standstill traffic

Interesting remarks, thanks!

When discussing remote vs non-remote with a colleague some time ago over lunch, he mentioned that "remote is an extreme version of yourself", so those inclined to slack off will slack off way more to the point of being unproductive, and those inclined to work longer hours will eventually just spend all their time working... Maybe over-simplified but I think he was onto something.

> unless solitude made you name a pigeon

This is kind of hilarious because I moved to Wyoming a few years ago and have recently started naming the magpies.

So the problem with this reply is you talk about thriving and then list personal benefits. Those are not thriving in the workplace that companies are looking for.

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.

I agree.

Rarely companies want to hire communication expert to help shape good practices even though they’re spending hundreds of thousands if not millions on stuff like Datadog etc.

I have this theory that mailing lists with rich search (slash Google Groups slash Newsgroups) are the best communication tools.

Hadn’t had opportunity to try it out though, as it was shunned „old tech”.

Ehh, IME companies are hesitant because it's not a free parameter. All of your internal processes are built on top of how people communicate, so you can't change it without changing the entirety of how work gets done. People routinely hire experts for external comms, manager training, etc. because those are easier to adjust in isolation.

The idea of coming to office comes from the fact it was not practical for people to have computers and other devices at home. Now we have technology that this is no longer necessary, but of course commercial landlords and investors feel salty about it, so they lobby for this outdated now model to keep their investments artificially up.

When I have had 100% remote work jobs one think I have noticed that when I get into the "zone" and am being very productive having to go home doesn't interrupt it and I can keep being very productive for many more hours. Then I can slack off the next day if I want to.

If management is so poor that they can't communicate intention in writing, then I don't really see how being in office or anywhere for that matter will help. They're just flat out incompetent. I've seen the opposite of this as well, where whatever management clearly communicated is most definitely not what is going to get executed.

If internal politics are blocking knowledge, access, & contribution of any employee the correct action is not to hire them. If they are already hired, the correct action of management is to offer them severance.

My experience working in software startups is that the average retention period of an employee is 2 years, in any work environment. What you're calling the honeymoon period is effectively just the average retention of the industry anyways.

I think you're glossing a bit over the word "intention". It's certainly easy for any competent manager to communicate instructions or requirements in writing. What's hard is communicating the full scope of their intentions, including things like:

* This bit is confusing to me even as I say it - I want to keep it in mind as we move forwards in case we're thinking about it wrong.

* This requirement is really annoying and I'd love to find a way to get rid of it.

* This part is super super urgent, and if we find a way to do it faster without too many other costs we should rework the plan.

You can't "just" write these things down, both because some requirements aren't so annoying you can come out and explicitly say it and because too many parenthetical clauses start to make a document impossible to read. If they're not communicated nonverbally it's hard to communicate them at all.

I wonder if that's because at the 2 year mark, people get a lot more responsibility, but no pay increases to compensate.

The big issue is that companies are indeed poor in so many ways, and all they have to fix it with is money, and sometimes not even that.

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.

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.

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.

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.

Yes I’ve done some excellent work with teams in Brazil.

One of the most insightful comments I've seen on this site.

[dead]

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?

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.

    > Americans have a... distinct work culture

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.

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.

    > Offshoring as a tactic emerged in the pandemic when companies realised that being “remote” works just as well.

Since I 90's, I remember it.

Yup, lots of Y2K work shipped offshore in the 90s while onshore worked on the web boom. After Jan 1, 2000, mgmt thought, hey, how can I use these cheap guys elsewhere.

If I read properly this is explicitely targeting UE, Canada, UK and other countries with high wages and R&D and software engineering capabilities.

Yep, seems like this is an opaque tarrif.

Other countries should use this when retaliating.

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.

The current administration is making a huge fuss out of VAT in Europe.

Sadly, not to adopt such a sane taxation method....

That isn't really possible because American Constitution expressly prohibits it. There is no realistic possibility of modifying the Constitution to allow it either.

As far as the US Federal government is concerned it has little practical relevance.

As with many things in American society, we're going to have to trash the constitution to move forward.

No, lol! That would hamper the USs strongest asset: consumption!

which is likely being hampered anyways due to corporate greed in the financial sector - it is going to be interesting to see the actual breaking point for leveraged consumption

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.

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

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.

>I'm still stunned when I see what devs are paid in Germany and southern Europe though.

Are German wages really low? I thought Germany as the richest country in Europe.

They seem much lower than, say, Ireland, Switzerland, Norway, etc. Eastern and southern Europe are low but also lower cost of living. A fraction of the US regardless.

I think you're only looking at big tech wages when you compare with Ireland. Norway doesn't have much of a tech industry.

Yeah but there's lots and lots of no big tech US companies in Ireland. They generally don't have much equity or bonuses but the base is OK. I got 6 figures from a bunch of them in Ireland so it's possible.

How much of that wage is left after taxes and Dublin housing?

Feck all, unfortunately. Like, if you either 1. buy a house some years back or 2. get an off-books rental through someone you know then you can do well.

Alternatively, if you work for one of the Big Tech places then you'll get a really good wage (by irish standards) as well as enough benefits to make you feel a bunch better off. Additionally the bonuses and equity there help a lot.

But yeah, Ireland's super expensive. Our household is at about the 85% percentile income, and we have a (small/expensive) house but we don't have a lot left after all of our outgoings.

So yeah, you can get a better salary but you probably won't have a whole lot more disposable income (but apart from all that, ireland's a great place to live).

Yeah, we tried to hack this by buying a cheap place in Offaly near the train and working remote, and it was kinda-sorta OK except that our neighbours were hell on Earth. Gave up and moved to the Netherlands which has been great for our kids' independence.

I do miss a good snug though.

Aren't Netherlands wages lower than Germany except for US big-tech and HFT?

I got a 70k offer with 10 YoE last week from a recruiter to move to NL and it felt like a ripoff. So I don't know where these fancy NL wages are outside the top 1%.

I dunno, I live in NL but work remote for a US company

> Aren't Netherlands wages lower than Germany except for US big-tech and HFT?

Generally you want to work for US companies, see the pragmatic engineers trimodal compensation article for details. The US thing works as you're cheap for them (relative to the US) but the wage is better than you can get locally.

Unfortunately there are no US companies hiring in my country.

They all seem to be only in Dublin and Amsterdam.

Yeah, that's the problem. Basically to get the good wages, you need to live somewhere expensive. If you have property/friends in those places it makes lots of sense, but otherwise I'm not sure it does.

But then you're not part of NL jobs market but the US one, no?

Sortof, you get NL/EU employment benefits (and taxes) and a premium to NL wages, but you're not paid US wages (unfortunately).

Usually one earns half to a third of net wage in Germany compared to East Coast US. A maximum of 100k total cash compensation is usually the norm for mid-size companies. That is for the most senior engineers. It is also taxed almost at 50%.

Isn't that the norm everywhere in Europe?

Isn't what the norm? Europe is not the US. Each country has its own living standards and completely different tax laws. EU doesn't unify them. In Switzerland one pays much less tax. In Netherlands it is possible to get 30% tax break if you haven't lived there for more than 5 years. Both the Netherlands and Switzerland pay higher wages too.

Lots of countries are lower, especially in southern Europe.

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.

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.

Won’t make much of a difference? To what?You’re only talking about whether to offshore or not. Not whether to HIRE or not.

Many companies simply won’t offshore core functions because doing product development on your core product with a team in a different time zone or from a very different culture often doesn’t work. But this will matter to companies that have laid off US engineers or avoided hiring and now won’t have that extra tax burden.

It's not possible, really, to believe that markets are inefficient enough to pay twice the price for something in one place as another...

In all likelihood you lived through 2008, and yet you continue to believe that market "efficiency" is somehow a builtin immutable property of particular trading rules?

> 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.

It is delusional to think you get same quality work for 70% less price.

It is not when ir comes to wages. People in other continent aren't dumb, the overall wages are just lower.

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.

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.

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.

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.

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.

> 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.

You cant automate the tactical assessment of "do we want to incur this tax?" Not easily anyway

I meant most of the process and boilerplate being automated. Someone still has to go through the rubberstamping process, but at least the BS and clicks can come from the BS and clicks generator.

Yeah but thats almost trivial, tactics and strategy decisions are the limiting factor

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.

>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.

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

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.

  > taxation time bombs where rules have expiration dates or delayed starts several years in the future.
  > ...
  > Unless the bomb is hopefully retroactively cancelled, like happened now.

as an example, the cuts to medicade don't start until right after the next midterms (which most are expecting to strongly favor democrats) [0]

[0] https://ccf.georgetown.edu/2025/05/27/medicaid-and-chip-cuts...

The unserious and corrupt are consistently rewarded with re-election. I really have no idea how we move forward.

Get rid of the First Past the Post voting system. Almost all the brokenness of US politics is downstream from FPTP. It incentivates divisiveness instead of collaboration and consensus, which a better voting system would.

Divisiveness as well as strategically voting for the "lesser of two evils" compared to voting for your ideal choice.

It should honestly be banned for any election and primary across the country and be replaced with approval voting or Condorcet methods or something else that are strict improvements.

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.

It's a year of very rapid change. I just realized the other week (naively) that we (non-US) should really be bracing even more than we are. For shocks to come, economical, cultural as a reaction to the slide towards an authoritarian presidential system.

It's not a time to be watching though, but to act.

So this is going to get all those jobs back that people have been layed off for right? Right?

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.

Reversion to the mean

Of course not.

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.

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.

> 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.

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.

"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)

https://www.senate.gov/reference/resources/pdf/yearlycompari...

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.

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Threads being over is a good thing, isn't it? Truth's been discovered, all parties agree, no more time spent on going in circles, can move on to do other, meaningful things, etc. Unless you are facebook, and you optimize on endless churn, stealing time and showing ads.

I haven't seen the original comment, but the wiki article is moronic. None of the listed example seems even bad to me, claiming that they are the devil is ridiculous. Maybe even a false flag.

The only one that actually has anything to do with "terminating cliche" is "Let's agree to disagree.". But that's just the common phrase you say after you've decided to opt out of an argument. It is not (and can't be) the cause of it, it is the consequence of it.* And it is by no means any bad, or should one avoid it.

* : something something people being able to easily leave an argument makes them do it more. But it would need a lot of stretch to argue that the possibility to go away from arguments is a net negative for humanity

edit: can we agree that the random shit you linked is 100% unrelated to the argument at hand, therefore/and definitely should not be used?

edit2: yeah, it assumes the truthness of some ridiculously nonsensical concepts, and uses them in a meta meta way, that is 2-3 steps away from the topic at hand. Much-much more annoying than anything listed. "This is the hill you want to die on, huh? Naah.. How about.." *points downwards* "..there is this hill there 14000 miles away (actually there is only ocean), how about we move this fight there?" Yeah no thx.

“Thought terminating cliche” has become a thought terminating cliche.

Some billion times more than any of the listed sayings in the wiki page.

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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.

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.

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?)

> (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.

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.

I don't think Republicans need to worry about Dems retaking the Senate anytime soon.

History says that would be a dumb bet. https://en.wikipedia.org/wiki/Party_divisions_of_United_Stat...

https://en.m.wikipedia.org/wiki/40th_United_States_Congress#...

https://en.m.wikipedia.org/wiki/74th_United_States_Congress#...

https://en.m.wikipedia.org/wiki/76th_United_States_Congress#...

https://en.m.wikipedia.org/wiki/89th_United_States_Congress#...

I don't think this tells us much. The present distribution of supporters is rather unique in how strongly it correlates with population density, which means that Dems are going to have a major structural handicap in Senate. I don't think there was ever anything similar historically. And it won't change unless and until the coalitions change, which, sure, will happen eventually - but then it'll be a completely different party under the same brand, so why would Republicans today care about that new party's difficulties?

It seems full of hubris to look back at history and say 'This time will be different.'

Maybe you're right, but people always say that. And they've always been wrong.

As one plausible mechanism: the economy stalls / inflation accelerates and people blame the party in power.

in American politics, 18 months definitely counts as an "anytime soon".

In the 2026 senate election, the Dems could absolutely flip Maine, North Carolina, and two others; maybe Alaska and Ohio.

If Elon Musk makes good on his threat to try to take out sitting GOP senators, that splitting of the vote could mean the Dems pick up a few more as well.

Because I don't think it's vestigial, I think it's serving an important function of governance that never made it into the official rules but is nonetheless necessary as a stabilizing effect. It doesn't have to be the filibuster but something ought to provide the effect. It should be easier to block legislation than to pass it. It wouldn't be a good thing if you could have huge policy swings when a 51-49 becomes 49-51. Being able to, with effort, demand specific pieces of legislation reach a higher bar biases us toward the status quo.

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.

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.

RCV is another name for IRV, it is not a generic name for the use of ranked ballots.

> Certain politicans know this and have made RCV illegal in their state.

That would be Republicans.

While Democrats have pushed across multiple states for changing voting mechanisms, Republicans in eleven states have pre-emptively banned any and all use of RCV at any level within the state.

Score voting (or STAR) is better.

Anything is better than what we have and ranked choice voting is the most popular alternative.

If you're doing a new thing anyway then it makes no sense to do something worse instead of something better. Popularity is determined by people; make the better thing the popular one.

It absolutely makes sense. You need buy in from the public. RCV is the most known alternative and it has taken a decade to get it that far. If you want to start the work of informing people about STAR voting then be my guess but RCV is a tremendous improvement from what we have and an acceptable alternative.

Personally I think “approval voting” is almost as good as RCV but orders of magnitude easier to sell to the public.

There’s just a checkbox next to each candidate and you check the box next to any candidate you’re “okay” with. Results in the most “okay-est” candidates getting elected so when the winner is announced everyone goes “…okay.”

Also could make primaries less important, because multiple candidates from a party could theoretically run for the general election without splitting votes.

Communication is easier because in RCV the candidate who gets the most #1 votes doesn’t necessarily win which could lead to a loss of confidence in the system. Its very easy to tell the American public “this guy got the most checkmarks” and no one gets confused.

If I recall the problem with approval voting is that it is much easier to tamper with than RCV. Filling in an empty bubble is a lot easier than changing the order of ranking on a ballot

That’s a good point. Seems like that could be a problem for current ballots too - add a second checkmark to invalidate ballots voting for the “other” guy. Doesn’t seem to be a widespread issue, but detecting it for current ballots would be more obvious.

Maybe that breaks this idea. Maybe ideally you’d maybe want a touchscreen+printer to fill in the bubbles with printer ink and show it to the voter for them to double-check before putting in the stack (or, if wrong bubble filled, put it in rejected stack).

Would love more feedback from people to get a better sense of all pros and cons.

The exact mechanism won’t be standardized, some places fill in ballots with pen today, let the voter feed it into the machine and optically scans to tabulate, and others use a computer that tabulates and (usually?) spools a paper record that’s behind a window so the voter can see that the paper record is accurate. The important part is the actual methodology itself.

no it's not a good point, it's the complete opposite of reality.

http://scorevoting.net/StratHonMix

it's utterly the opposite of that.

http://scorevoting.net/StratHonMix

Most people don't actually know anything about any of this. If they've heard of RCV at all their understanding of it is at the level of "it's something different than the status quo and supposedly better". You could swap in STAR and they mostly wouldn't even notice that you've changed anything. But you'd notice the difference in the election outcomes, in a good way.

Enough people know about it that it has been put on ballots in several states and has had strong pushes in other states while STAR hasn't at all. If you want to get outside and start informing people about STAR then please do but RCV has a decade long head start and is the path of least resistance.

this is a fallacy my team has been talking about for 20 years.

https://www.rangevoting.org/IRVsplitExec.html

tl;dr IRV is extremely poor, doesn't actually solve the vote splitting problem, and is radically more complex and cumbersome than superior alternatives like approval voting, which would plausibly scale far faster once gotten off the ground. plus approval voting was adopted by 2/3 majorities in fargo and st louis, so we know it's politically viable.

Not important but Mamdani would’ve won without ranked choice voting too, it didn’t play a role in the end.

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.

The last time something like that happened was probably the Patriot Act.

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.

Affordable Care Act (Obamacare) was the most sweeping legislation ever passed via reconciliation.

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.

Whoops! I remembered the reconciliation but not the initial vote.

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.

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.

This was called pork when it used to happen and people were very angry about it.

Pork wasn’t formalized, though, was it?

Though I agree that favors did seem to be more separated across bills in the past. This is an interesting manifestation of congress becoming a lower trust system, I suppose.

This. TCJA removed it and OBBBA restored it. What am I missing here

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.

Or set a little timing booby trap. Like in this, "We're going to cut Medicaid, but only after the midterms, so if you start screaming about it, we'll blame the Dems for it."

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.

Maybe for every other item in the bill there is a another group of people out there who also think that "that is a good thing on a generally bad, overstuffed bill".

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.

?

This applied to salaries, it wasn't a capital expenditure as "capital expenditure" has traditionally been defined.

This was an operational expense.

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.

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.

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.

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.

"1-year deprecation [sic]" would mean that salaries paid in the second half of the (fiscal) year are only half deductible in that year, and half in the next.

But seriously what is with this trend of throwing out simple reframings as if they're insightful on their own?

While accurate, capex captures the building of things, like hiring a company (that pays salaries) to build a factory.

> 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.

Sure, a lot of that understanding was included in my recognition of the downsides.

The fundamental dynamic is that the government wants there to be a forcing function on having to actually realize profits, so that taxes have to be paid in a timely fashion. They don't want people to be able to reinvest all of the effective profit and keep kicking the can into the future indefinitely. Capital gains and retirement plans are exceptions, each for their own reasons.

> The fundamental dynamic is that the government wants there to be a forcing function on having to actually realize profits, so that taxes have to be paid in a timely fashion. They don't want people to be able to reinvest all of the effective profit and keep kicking the can into the future indefinitely.

I would have to question whether that is actually a good policy.

To begin with, it doesn't work unless you do it consistently, which they don't. Then businesses defer the taxes anyway, and you get huge market distortions because it majorly affects where investments go, e.g. we're then lacking for sufficient housing construction because it's heavily disfavored by the tax code over alternatives. But doing it consistently also doesn't work because many of the industries that have exemptions have them because they would implode without them. In particular, anything that experiences significant foreign competition would be screwed as soon as the other country does it the other way. It would also create bad incentives -- you'd have to get rid of the retirement deferral, damage everyone's retirement savings and create perverse incentives for immediate spending over saving/investing.

Moreover, the main reason we use an income tax instead of a consumption tax is in order to have a progressive rate structure. If you want to put a different effective rate on someone who spends $1M/year than someone to spends $10k/year, a merchant collecting the tax at the point of sale wouldn't know what rate to charge. (There are also other ways to achieve this, like combining a flat consumption tax with a UBI to achieve the desired effective rate curve, but that's a more systemic change.)

But if you allow business expenses to be deducted immediately, that's another path to having a consumption tax with a progressive effective rate curve. The rate can be higher for the people who spend more but you still have to pay the tax when you want to buy a yacht or a personal mansion. It also gives you a way out of the "they borrow money to avoid realizing capital gains" thing: Make the loan taxable income in the year it's taken out and a deduction in the year it's paid back, but if it's a business loan then you get a canceling deduction when you take it out and invest it (and the same for e.g. student loans), which makes it so you can't spend the money on personal consumption without paying the tax.

Meanwhile if you always reinvest 100% of profits then you don't pay tax until you stop, but that's what we want them to do. Build housing, hire people, invent things, donate to charity. These things are tax deductions on purpose.

> But if you allow business expenses to be deducted immediately, that's another path to having a consumption tax with a progressive effective rate curve

If I had written a longer comment, I was going to go in a similar direction. But I think it's a bit fallacious to be talking about that when it would make the tax code even more lopsided to heavily taxing wage earners. Like when you buy a car to be able to get to work, you can't even deduct that from your earnings even though it is a necessary expense for being able to earn that income. If that last part were changed - both with direct deduction of things like living expenses and also unrestricted traditional IRA contributions/withdrawals, then it would make sense to start talking in terms of moving towards a de facto consumption tax. But without doing that, it just seems like a rallying cry to further reduce taxes on the investment-owning classes.

(I'm using the word "deduct" in the business tax sense of direct subtraction, not the personal income tax sense where your expenses have to rise above the level that is otherwise a personal exemption. Being able to deduct so many specific expenses would of course end up placing a heavy bookkeeping burden on individuals, though)

...and 1031 Exchanges. People defer profits on real estate across generations, now.

The immediate effect of this is that one of my customers simply cranked up the amount they can spend on R&D this year by the amount of the tax savings. Which is substantial, because they were only planning to expense 20% of what they would pay us, and budget paying about 25% in income taxes on the rest.

So out of $100,000, that’s $17,600 more in spending, or a 17.6% increase. And they can expense that extra $17,600 too.

> 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.

Please expound

Ofcause.

Fundamentally there are reasons why we don't allow companies to funnel all operational profits into capital assets without them paying taxes.

An analogy would be a company that used all their profits to extract gold from the ground such that they get the labor worth of gold out. In doing so they would effeciently dodge paying taxes of their profits.

Now back to your comment: you portray it is as only good that this law was changes . And in doing so you leave out these details that essentially leads to instantiating laws like these.

Your analogy suggests a deferment of taxes paid but not elimination.

In your example, they still own all the gold and would eventually pay taxes on any liquidation.

I bring this up because I, too, am as interested in your parent to know the original inspiration for these parts of the tax code…

Further: I have a suspicion that this should be applied differently to C-corps vs. pass through entities in the same way that corporate taxes and retained earnings are…

The depends on how you implement it.

You could also just don't allow to deduct taxes on the work out into digging out the gold.

In the end I do not care. But i feel like people would be equally ignorant if it was proposed to tax the software in other ways (eg VAT on the derived services from operating).

Regardless, these are the discussions to have.

Sure, but not allowing expensing of software R&D was asinine.

So US will continue subsidizing its R&D while complaining the rest of the world is doing so? What changed then?

It’s not a subsidy. They just are letting people immediately expense R&D instead of requiring it spread over 5 years.

Our glorious R&D subsidies, their savage market manipulation.

If you're going to subsidize anything why wouldn't it be R&D

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.

why wouldn't r&d count as an expense? why do amortization schedules constitute a subsidy?

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I think we will see this lead to a boost in software developer employment.

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.

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.

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.

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

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.

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.

Some of my biggest productivity gains with llms come from areas that aren’t coding. Research, summation, communication and operational issues have all seen pretty dramatic improvements for me when adding llms.

I don’t think ai will replace the career of software development but I do think the tools we will be using to to it will be dramatically different.

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.

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.

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.

That doesn’t matter, what matters is making the narrative stick.

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.

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

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.

> in the end your output is significantly increased.

The claim you're arguing against is that AI will replace software engineering as a discipline. Seems like you're instead saying that it will increase developer productivity, which no one disagrees with.

Well yeah, if you have one senior with the power of 2-3 AI agents - you don’t need juniors or sometimes mid developers at all. Let’s say you’re Whatsapp and your 20 people develop the app, well now you need 5 at most for the same workload.

Obviously we’re not yet at the point where the CEO can enter “build me the next Uber” in Claude Code and watch the stock price go up.

I'd love to get access to codebases made entirely with agentic coding that people deem a success. Everything they've suggested for me beyond trivial work has been wildly overcomplicated.

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.

Original passing didn't cause much trouble because the provision didn't take effect til 4 years later.

It's always been a nonsense narrative with lack of grounding in reality.

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.

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)

> I cant see any reasonable reason, in a broader context, this would have a meaningful impact.

A significant amount of software dev employment is in startups. Companies that are spending on development, but aren't making much money yet, will see a huge benefit from this. The change in tax liability could mean a single seed or series A round paying for an extra 1-2 devs.

I’m hoping so, too, along with another boost in salary growth since they’re immediately expensable.

> Foreign R&D must still be amortized over 15 years

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.

How does that actually work? Most large companies open foreign subsidiaries owned by the parent, for example “Microsoft” will own “Microsoft Canada” and employees working in Canada work for “Microsoft Canada” and NOT the main “Microsoft” company.

The R&D done by Canadians is booked against Microsoft Canada, so in my mind the Canadian laws around R&D would apply and not the USA laws of 15 years old amortization?

Am I missing something?

What qualifies as forein here? Employee located abroad, or hiring subcontractors from other countries?

Awesome, this literally could not be better for American tech workers.

There's also H-1B (and other worker visa) restrictions/costs imposed. Overall, quite good for the American tech worker

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.)

>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?

In Washington state it is. But I'm talking about the minimum salary to get an H1B visa which is $60,000. Given that H1Bs are intended to substitute for skilled professionals where the prevailing wage is easily twice that these days, raising it and indexing it to inflation seems like common sense.

Huh? Eliminating h1bs tracks better with what's going on.

I don't see anything supporting this in the text of OBBB, nor in the definition of domestic research expense (https://www.irs.gov/pub/irs-regs/research_credit_basic_sec41...). Where did you see this?

Edit: Oh you mean costs in general, not in the context of section 147

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)

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.

Sounds like a CRIME to me.

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Source?

Extra $250 fee for visa applications: https://judiciary.house.gov/media/press-releases/big-beautif...

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

Quoting all the fees in https://judiciary.house.gov/media/press-releases/big-beautif...

> 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 $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.

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.

[1] https://www.congress.gov/bill/119th-congress/house-bill/1/te...

[2] https://www.congress.gov/bill/119th-congress/house-bill/1/te...

> 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".

Ok thank you I was really worried for a second. Capital controls are on the bingo card but I was hoping it wouldn't come yet.

For comparison, India taxes remittances at 20%.

This is not true. There's a TCS of 20%, which is an advance tax payment that you can claim back in your income tax returns at the end of the year, and it not an additional tax. This is just a (bad) mechanism to stop black money from leaving the country.

Thanks I didn't realize that it was refundable, I guess "India makes people loan 20% of their foreign remittances to the government interest-free" would be more accurate.

> "India makes people loan 20% of their foreign remittances to the government interest-free" would be more accurate.

It wouldn't. The TCS can be offset against other tax liabilities. The government pays out 6% interest on excess tax payments. For reference, 364 day T-bills are currently yielding ~5.5%.

The idea is to force reporting and add friction. Not raise revenue.

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.

You might look at the rest of the bill.

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So payroll for R&D is now entirely tax deductible? Businesses get to choose to pay taxes or do R&D for themselves?

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.

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.

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.

https://news.ycombinator.com/item?id=44180533

more info here too

https://news.ycombinator.com/item?id=44226145

Either scenario taxes are paid - it’s just how and over what time period.

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.

This matched capex software.

Weird how the depreciation schedule changes based on how the software was acquired.

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-...

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.

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.

When the hammer fell in late 2022 / early 2023 I was out of work for the first time in 20 years of uninterrupted employment without one day of unemployment. Having just carried my family (financially) through a bereavement that left people effectively unable to work (there are a zillion expenses you don't think about) I was also running on fumes myself, and I very rapidly surmised that I was going bankrupt : I had a cost structure that takes a minimum of a year to change and I had just gotten done telling the Valley where to stick their millions a few years earlier.

So for me this is like, the end of a period where contrarian hackers can be passed on at arbitrary ability in a way that has no lower limit: there is no bottom now and there is no safety net.

But I had about a decade of just never having to care about money at all before that, so maybe there's some karma in it too.

For me this is like, OK I'm definitely not going to get frozen out of work with no place to live anymore, and I'd be lying if I said I didn't sleep easier last night than I have in a while.

But even from that vantage point, I oppose the passage of this bill and will argue to see it overturmed: the people who it hurts are more vulnerable still.

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.

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.

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?

Nobody can answer any of these questions because they've been misled by misinformation which has ironically been promoted by the same people who bleat about misinformation on a daily basis.

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Unless there is some kind of relationship to tech, political posts are generally removed from this site.

You shouldn’t interpret this sites focus as the people that post here not thinking there are more important things.

I'm familiar with the voting patterns of HN users.

For this reason I tend to browse HN using the https://news.ycombinator.com/active frontpage because it contains the flagged topics that certain users of this site attempt to hide, while also preserving the vast majority of interesting tech-related topics.

It's not about voting patterns. It's about the rules of HN:

>On-Topic: Anything that good hackers would find interesting. That includes more than hacking and startups. If you had to reduce it to a sentence, the answer might be: anything that gratifies one's intellectual curiosity.

>Off-Topic: Most stories about politics, or crime, or sports, or celebrities, unless they're evidence of some interesting new phenomenon. Videos of pratfalls or disasters, or cute animal pictures. If they'd cover it on TV news, it's probably off-topic.

https://news.ycombinator.com/newsguidelines.html

I am also aware of what the rules say, as well as how they tend to be applied in practice.

The latter is why I don't find arguments that fall back on the former persuasive.

There's no guarantee that posts related to tech that are also related to political stuff will avoid being flagged.

Even when there is a relationship with tech political posts are generally removed if they don't align with a zeitgeist of modern America that seems to chose to fall in line instead of resisting unseemly actions by the new government.

The vast majority of stuff on HN I've seen about Trump and DOGE has been negative.

You seem to be saying HN will promote pro-Trump stuff and delete anti-Trump stuff. That's simply false. I can give a ton of highly upvoted anti-Trump posts.

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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.

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.

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

It proves they never actually cared in the first place, it’s just arguments as soldiers.

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?

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…

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.

They just added capital expenditures as well at a 40% rate (compared with 35% for salaries). So this is no longer a concern.

It's 35% of eligible spend on up to $3 million, and 15% above that (15% and 15% if the corporation is not Canadian). Further, most software development simply doesn't qualify-

https://www.canada.ca/en/revenue-agency/services/scientific-...

If you're making websites or doing Shopify integrations, etc, that doesn't actually qualify.

Something truly novel in AI or self driving or whatever -- sure.

This is a naive perspective. In reality, most of the software development that a typical growth company does is eligible. As one of CRA’s auditors once told me, “The general arc of your development has to meet the criteria of being technically challenging and uncertain, and you have to follow a generally scientific approach, measuring your results empirically. But if you need a web console to help with that, who are we to say that’s not eligible support work?”

>This is a naive perspective.

Okay.

SR&ED had 22,758 applications last year. Software development only accounted for 40% of it. So 9000 applications from software dev firms, the majority being very small firms. That is a tiny, tiny minority of software firms in this country.

>In reality, most of the software development that a typical growth company does is eligible

No, it absolutely is not, unless you are lying on the application. And yes, a lot of people lie to get government grants and subsidies. And it works out pretty good until someone audits it and realizes that someone is making a shitty instrumentation console that absolutely no one would say advances scientific knowledge and demands the credit back plus interest and penalties.

And yes, I've seen people's absolute bullshit SR&ED applications before. I've had peers ask me to review theirs, where they do bog standard bullshit dev but read on HN how super easy it is, and they convince themselves that "everyone is doing it". Only those signatures on the form that lies about what is actually being claimed.

Again, it's awesome...until it isn't. Which is why the vast majority of software firms are not claiming this.

“Vast majority” is literally only one company I have ever heard of in Canada. Slack didn’t bother because they could not claim at the 35% and Andreesen showered them with so much cash it simply wasn’t worth the hassle. But every other software company I have ever had any insight into in Canada claims SR&ED. And not by lying on the forms… Everyone gets audited typically every 3 to 5 years. You can’t make it through an audit with B/S. They are very good at sussing out the bad claims and yes, that is a punishing experience as it should be.

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'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:

https://www.cbc.ca/player/play/video/1.4596459

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.

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.

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.

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.

It’s not terrible in comparison to the scale of the benefit. Just outsource the report writing to KPMG or another capable and reputable accounting firm and you’ll survive audits and it won’t kill your team. I would say over the years, SRED has helped us become better at managing the efficiency of dev.

There is lots of paperwork for SR&ED, enough so that companies opt not to do it.

Honestly, this is a not true. If you work with a decent accounting firm like KPMG’s Vancouver practice, and maintain a decent dev task management system like JIRA, you will be fine to hand over your payroll register and a CSV dump every January. A few weeks later, you have your claim. Once in a while, you have to sit there and talk with the CRA’s auditor.

> Honestly, this is a not true

You have a conjecture that all companies keep good jira task tracking and payroll, AND that all companies contract out big accounting firms like KPMG.

From my personal experience I have been at two Canadian companies who didn’t claim SR&ED and therefore your conjecture is disproven with counter examples.

Some companies don’t keep good enough task tracking, some companies don’t know about SR&ED, some companies think the paperwork and auditing is burdensome, some companies are just lazy.

Okay, well... if your CEO is too lazy to use JIRA etc.. to save 60% of development costs then I don't see much of a future for the company...

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.

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.

"There are abuses" is really an understatement. "It's mostly abuse and there might be some legitimate beneficiaries" would be more correct.

It's hackernews, not Elon Musk's X or the French parliament, please bring sources and precise details.

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.

My experience is different, so far I've defended R&D that I believed to be eligible to tax credits, in order for companies to be competitive with other countries that also subsidize R&D and innovation, namely USA and Canada. You can't generalize a 7 billion tax cut system based on one journalist work (the same and the same is quoted again...), opinions based on a few rotten fruits in the basket, and an anti-startup trend that amplifies this hatred for political and ideological reasons.

My experience, from 20 years as well, aligns with widespread abuses. Pretty much the whole financial sector is sponsored by the CIR, none of which contribute anything beyond the bullshit reports mentioned above. I myself wrote countless reports like that, most of them vastly autogenerated to look pompous.

I don't remember having to defend anything to get the CIR, it's more of a judgment call on whether you feel confident to defend it if you get an audit, and these are very rare. We've had such audit in the past, and it made everyone rewrite each submitted report in a hurry to make them look more serious. No sanction were applied.

At this point, my opinion is that the CIR has very little to do with actual research, but rather it's a discretionary tax subsidy for sectors in which France wants to be competitive.

It's not only the tech startups, I've mentioned it because that's what a know best, but my brother works for a large industrial company, and they use the same tricks and also have their reports done by professional bullshit companies whose jobs is to make it look like some research happened (in their case it's sometimes somewhat the case - unlike tech startups - but most of it is just bullshit).

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.

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.

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.

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.

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.

I suppose it takes living in both countries to really just whether Canada is “much” more socialist. The US has a lot of socialism in the form of generous disability income replacement programs, Medicare and Medicaid, SNAP, and the like. Canadian provinces must implement a single payor medical insurance program within certain parameters, but dentistry - bar a very new and very small federal program - is fully private. And pharmaceutical pricing is largely free market.

When you zoom in on some of the Big Beautiful Bill’s new programs, they appear more “socialist” than anything Canadians have ever enjoyed.

Canada is much more socialist, in your take, so it has more programs for corporations and private enterprise? Huh? This is nonsensical.

Further, it's incredibly difficult to quantify countries on this purported socialism scale. Sure, Canada has universal healthcare like every single developed country but the US, but otherwise it's much more of a mixed bag. The US has always been vastly more "socialist" than its advocates think -- the military is a colossal make work project and is straight out of Soviet doctrine for central planning -- and of course the entire agricultural industry exists under a massive subsidization regime, but under the current administration....whoa.... There is no Western country that has a central planned economy, with a president that is taking direct control of corporations (US Steel) and demanding ownership of corporations (TikTok), while enlisting private executives as members of the military exactly like China (https://www.theguardian.com/technology/2025/jun/25/meta-exec...), all while saying the entire economy is a "store" that he has sole control over. Absolutely no one in the US, looking very Stalinesque ala the late 1930s, should be throwing stones about socialism.

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 ?

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.)

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.

Looking through the latest 'Who's Hiring' thread last week, I noticed that a higher percentage of the remote jobs seemed to specify Remote (US). Could one of the causes of that, have been employers reading ahead and making decisions on the basis that this bill might be passed? Or is there some other reason? Or is it just a case where it fluctuates randomly from month to month, and I am trying to read pattern into random noise?

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.

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 ?

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

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.

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.

Its a combination of factors. The end of ZIRP made raising money more expensive and the tax change made hiring Software Engineers more expensive. Small businesses faced existential challenges and cut back, so now there was less demand from them. Then Big Tech realized they needed to layoff to post better numbers to continue boosting their stock (even though they made enough revenue) so started cutting jobs.

With this change one of those factors has been eliminated, so we will see startups/small businesses become a lot more competitive.

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.

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.

[1] https://www.reuters.com/business/energy/china-roll-back-clea...

[2] https://ember-energy.org/latest-updates/wind-and-solar-repla...

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]

1 - https://www.theguardian.com/world/2025/jun/26/china-breaks-m...

China "won solar panels" because they subsidised the production to the point that their companies could sell panels cheaper than they cost to make, and then these companies were allowed to dump them below cost into the western markets to destroy all the local innovation. Germany and the US in particular just sat back and watched that happen.

However, market share doesn't really translate into the economics of large scale generation. The projects that are marginal (or negative) in the US and rest of the world for that matter, are costed using whatever the cheapest panels or materials available are. Whether they are local or not does not matter. You are conflating two unrelated things here (local manufacturing capability and power generation e.g. actually deploying renewables).

China meeting arbitrary targets is also beside the point. They are building a tonne of solar and wind, but they are also building more coal too. (Refer to my previous comment in how they along with many other G7 and developed nations are investing more in coal than they were in 2020).

GP made some specific claims which were demonstratably false. The points you raise here aren't particularly related to those.

they're building that coal in the role of gas peaker plants - backup power. It will probably never be used at any significant % of capacity, as the solar and battery revolution continues to astound in its speed.

>Nobody but the 3rd world is increasing investments in coal/oil

This was the assertion. It is demonstratably false.

> We have long been told that renewables are cheaper in every way that matters, so let's see the economics of that play out.

Renewables are cheaper now than they used to be. Why? The same reason anything is cheaper the longer you make it: technological improvement, economies of scale, production efficiency, increased # customers, reduced capex, amortized r&d, etc.

"the economics of that" aren't black and white. Just because something is expensive today doesn't mean it will be expensive tomorrow. But if something cheaper exists today, and nobody invests in the expensive thing (because "the market" doesn't see immediate cash gains in it), then the expensive thing never has the opportunity to become cheap.

> 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.

The "show" is long-term. That's the whole point of all green energy: it's expensive at the beginning, and then becomes increasingly cheaper over time, to the point you start saving money, and then you keep saving money. But to ever get to that point, you have to invest big at the start. That's what the subsidies are for!

China has a massive and cheap labor force and decades of manufacturing expertise. That makes their products/services cheap and advanced. Unless we literally take over Mexico, we don't have the labor. And unless we start investing now, we'll never have the expertise. Without subsidies, we will never get on renewables, and we will always pay more for energy. Since the whole future of the world is dependent on energy, it might be a good idea for us to invest in it!

>But if something cheaper exists today, and nobody invests in the expensive thing

I think you are talking past me. The green bodies have constantly touted how we already reached the inflection point where renewables are cheaper than coal, nuclear, etc. The quiet part that isn't spoken aloud is that these renewables were only economically positive with substantial subsidies and credits. You can't have an honest conversation when the water is mudied to such an extent.

why does that matter anymore? they are cheaper now without incentives, so whether they were subsidized in the past doesnt really matter right?

Except this isn't the case. GP talks about how removing the incentives is "going to have a big negative impact on the economy" due to all these green projects no longer being viable. Indeed, whether they were subsidised or not in the past doesn't matter... but it's also not relevant to this discussion either.

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.

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.

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.

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?

People have children they might care about.

Governments don’t.

Would you say the Chinese government is operating more short-term than "people with children"?

Cool, cut all the oil subsidies, and road subsidies, and let the market decide

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.

> 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.

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.

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.

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.

> 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.

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.

Nuclear is by far more expensive than other green options.

It has been historically, but must it be?

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.

Oh, goody!

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

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.

The fact that this is downvoted is deeply disturbing. Timothy Snyder has similar thoughts on concentration camp labor: https://snyder.substack.com/p/concentration-camp-labor

Meanwhile, SV darling Curtis Yarvin is plainly insinuating that we should bring slavery back: https://bsky.app/profile/did:plc:gqqqg5xi4p2x4bfgphr7akip/po...

What in the fuck is wrong with people?

It is important to understand that the methods selected for the “Final Solution” were intended to minimize costs. It is dangerous for crime at this scale to become cheap.

The experience of the Einsatzgruppen in Poland showed that mass execution with guns used too much material and was too stressful for the perpetrators. Camps allowed operational costs to be amortized while individual responsibility was diffused.

Sibling commenter is hellbanned, but relevant.

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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.

>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

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.

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.

> 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.

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.

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?

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

Except that argument admits a means to evaluate it. You take the thing repeated ad nauseam and subject it to an evidentiary requirement. Are people actually being held without habeas corpus? Are people actually being executed based on their ethnicity? If anything in this nature is happening, has the rate of it significantly increased recently or has it been going on for decades?

The last question is pretty important if your argument is "Trump is a fascist and all we have to do is get him out", because then that argument is erroneous and you have to actually change the status quo instead of returning to it.

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.

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.

>You didn't actually answer the question.

He never does. If you go through his comment history all he does is shill for Germany and EU how they're the best, and shit on Trump and the US how they're the worst and that's it. He never has any arguments beyond appeals to emotional manipulation of "look at the fascists" based on fake or one sided articles. Best treat him as a troll.

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.

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.

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.

Your nationality is not a credential, I don't know why Europeans can't understand this.

Of course it is. States that overcame fascism put a lot of emphasis in detecting the early stages of fascism and how to stop it from take it over again in their educational system.

States that haven't had that issue before, on the other hand, have a population that is woefully naive to the dangers.

Having one of grandparents being part of the resistance and the other one helping it covertly, then spending a lot of time talking with them, something new generations miss a lot, counts however. This made me later extremely biased, of course, however as with many teens fascinated by fake ideals just because they make you look cool I experienced the fascism lure back in the early 80s, and actually embraced it for years because of immaturity, so I wasn't exactly immersed in a one sided environment (did I mention that my father sold his very profitable business because he feared that communists would rise in power and nationalize it?). What is happening in the US has been clear since January-February when they reached the point of no return; there are points a government must follow to become an oppressive regime, and the US govt checked all of them long ago. Once they start they can't stop until they either reach a tipping point of self preservation North Korea style, which is the more likely scenario, or they escalate further and further tightening their grip on the population to the point they screw it up entirely and a full scale revolution is ignited. One thing is certain: they can't go back: they broke so many laws that going back would mean prosecution for many of them.

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.

Really grabbing at straws to dismiss the evidence of your eyes and ears here, huh?

"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.

> Probably because you've seen it repeated so much in your hyper-propaganda bubble of reddit that you've started to believe it

I've seen it with my own eyes, no fucking thanks.

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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

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?

May be a Naive Question: Has there ever been a time, where Tech or Software companies have to pay tax even when they are un-profitable. And if not, given the historic low interest rate, why not borrow and continue to grow until the company can no longer manage to spend all your debt? Correct me if I am wrong I think that used to be the playbook for Amazon.

There are companies which I dont understand why they are keeping all the profits and not reinvesting for R&D or other purposes. I must be missing an angle on this. Apart from investors, what else would it be?

Actual title is "House Passes Tax Bill Sending to President for Signature – Details Inside".

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.

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”.

Thank jeebus.

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this doesn't add anything to the conversation.

You must see the irony in saying this given what the parent comment has.

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Humans play games to learn, the more AI do the same the better they will get

I believe the impact of Section 174 has been vastly overstated, sadly we will soon observe this to be the case.

What do you base that belief on?

I would assume they think the cause of the layoffs was more related to the non-zero interest rate.

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.

yep it is definitely a big deal for f500. lots of creative accounting techniques had to be used in the meantime.

Well who the hell was complying anyway?