1) At my company they already were capitalizing most of our time. We have to fill out time cards characterizing most of our time as R&D. As best as I can make out this is partially tax efficiency (and maybe we're getting credits) but it's also substantially about reporting and having a similar capital/operating structure to other companies in our industry.
2) From what I've seen at my company and others, most of the layoffs have been moving job functions overseas. Axlerod points out that the amortization schedule is even worse for overseas engineers, but brushes it aside by arguing that companies can get tax benefits from foreign governments. But then he points to Germany as a country that gives the old tax treatment, which is confusing because Germany's tech employment trends are similar to the USA. In fact, in my company, we used to have large German operations all of which have been moved to cheaper European countries and India.
3) He also mentions ZIRP but only to dismiss it. That seems kinda goofy as you talk to any financier and they will say the rising risk free rate of return will eviscerate speculative investment.
4) He also fails to really even address two other trends that I have seen in our industry: maturation of the industry as a whole (and a lack of new "platform" to take off since cellphones) and a post-covid post-WFH backlash by industry leadership against more assertive workers, and a desire for labor discipline.
No doubt Section 174 is also a cause for the tech slump. How much compared to all the others? I don't know. And I support its repeal since it was just an accounting trick in the trump tax cuts. My intuition is that its effect is pretty marginal and a repeal won't change much.
- Pandemic swells from tech was cooling off. It was simply not going to be a situation that facilitated constant growthong term. Likewise, this tail end also meant another round of trying to outsource tech overseas, now that companies spent a few years forcibly adjusting to remote work.
- some new privacy policies in Apple and Android changed that made it harder for ad tech to do their jobs. Great for consumers, but this does mean that a part of tech would be hit hard over the impacted revenue.
- the overall atmosphere in the world meant people were already taking recessionary measures. Companies were already staring to plateau in growth around this time
- interest rates would increase the next year which impacts everything. But tech would be hit pretty hard itself.
- the Ai hype bubble was starting to take off around this time. It wouldn't affect tech for a while, but it would slowly start this pivtot to try and push this as a marketing gimmick and shift priorities. And in a few cases, companies start to get this genius idea that this very premature tech can replace programmers.
A lot of stuff just happened all at once. S174 alone wouldn't have caused such a downturn by itself if companies thought they could still profit at the end of thr day.
I feel like its partially ignorance, and partially trying to distance themselves from benefitting from this law
Kind of annoying. This country has a class system. Wish people would just stop pretending and acknowledge where they're at, everyone for Section 174 updates will benefit from the budget and tax bill.
Why can't we have bills that do one thing?
0: kick 7M people off Medicaid, hire 10K new ICE officers, tax university endowments, subsidize fossil fuels, etc https://apnews.com/article/big-beautiful-bill-trump-tax-cuts...
1: "Voters 53 - 27 percent oppose the legislation, with 20 percent not offering an opinion" https://poll.qu.edu/poll-release?releaseid=3924
It isn't 'masochism' to give back to society, since without it you wouldn't have the ability to make money at all.
I’m saying the opposite. Be happy that laws are benefiting you. Lean into your actual privilege because we aren’t in this together and we should stop pretending we are.
Lets be excited that tech employment sector is about to get supercharged after year’s of convulsion and questioning its viability with new trends like generative AI.
Specifically because Congress can always correct other aspects of a big law they passed. They can do it quickly! The fact that they don't is a completely separate issue that you could put energy towards if you were using activism energy efficiently.
You sell your labor, you don’t make money by exploiting others. And the middle class is a vague concept that is situational and effectively meaningless, particularly in the contemporary US