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Comment by Terretta | Hacker News Reader

Ok, but in year five, it would look like this again:

      1,000,000 Revenue
    - 1,000,000 1/5 Salary expense x 5 years rolling
    -----------
              0 Profit

So really, it's removing (deferring, or peanut buttering) the startup and ramp up "invent new things" subsidy, while not really affecting steady state R&D if you're not growing talent ahead of revenue.

So even in year 5, it's an adverse incentive for putting new/more talent to work.

Even big business may not be able to make as many growth project budgets work.

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Startup subsidy?

This seems to be penalizing competition and new competitors, for literally no reason.

No reason? Regulatory capture is the reason.

Year one: You go broke. Everyone loses their jobs. You file for bankruptcy. Game over. There is no year 5.

European software companies don't go broke and AFAIK they have 0% tax credit for salaries (in most countries, I know there are some R&D schemes in UK).

In Sweden, salaries are 100% deductible. You pay company taxes on the profit you make. There is an option to capitalize some R&D expenses if you can show that they are directly responsible for a future asset that you can set a value on (like, a startup where all engineers work on a single product).

We're not talking about a tax credit at all though... We're talking about being able to deduct salaries paid.

A tax credit is usually an incentive, like if you spend 10k on solar panels you get to deduct the 10k and then the government might say "hey thanks for pushing renewable energy, deduct an extra 2k from your tax bill." That's a credit, which we're not discussing here.

>European software companies don't go broke

They don't do that well either. Which is perhaps why the biggest ones are all American

>they have 0% tax credit for salaries

At least in some countries I know that's totally wrong, but depends what you mean by "credit". Salaries are expenses, are not counted in profit.

Ever heard of that small German company called SAP?

they're more the exception than the rule.

The biggest software companies (Facebook/Meta, Google/Alphabet, Microsoft, Apple) are all American.

You think European software companies count software engineering salary expenses as profit that they are taxed on?

> 0% tax credit for salaries

I don't think that's what's being discussed here. The question is whether salaries are (completely) expensed immediately (reducing profits) or whether they are (partly) capitalised (which will reduce profits later but not now).

No one is talking about tax credits.

The expense of salaries isn’t deductible against income.

That’s if you could have afforded to pay the tax on the $2,000,000 of phantom profit you had until this point, which no one can.

You don’t get that back unless you somehow fire everyone so you can offset income and expenses without more amortization.

You can if you raise debt or equity to pay salaries.

The lack of specificity in your little table should illuminate for you why this is such a complex issue to comprehend. I understand there is some fictional, meaningless interpretation hidden inside your head where that table is "right," but for all normal interpretations, it's wrong.

Unconstrained growth is not tolerated anywhere else, but somehow people bend over backwards to explain how actually any constraints on business growth are Very Bad And Evil.

Unsustained growth is just one type of growth though and this affects all growth so I don't see you point as relevant here.

I'm commenting on one of your older comments so it doesn't appear in the current discussion.

What I think needs to be adjusted with GR is simple: Just as time dilates, t'=γt, gravity emission itself must time dilate: g'=γg.

In the case of GR, just replace t with g. t'=t√(1−(2GM/rc^2)).

The problem here is solving for gravity self-interaction concerning gravity emission.

That's a natural outcome in any complex system. It's not reasonable to assume that changes can only affect some parts and not others. What's important is not the first-order changes, but the second-order equilibrium that such a change engenders.

What's important is that unconstrained growth is meaningfully checked. This at least makes it possible for others to thrive, even if they're asked to adapt to a new paradigm. I don't see how a thorough analysis could ever ignore this.

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