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.
No, and lots of controversial bills have passed other than as reconciliation bills, and especially so during trifectas where they "controversial" within the minority party but broadly supported by the majority; reconciliation is necessary to pass something that strains unity in the majority party and is uniformly opposed by (not "controversial to") the minority party, perhaps.
I wouldn't like what the current congress would do without the filibuster, but at this point a paralyzed system might be worse.
All of these except the first two were bipartisan and got 60 Senate votes (or more)
It does seem like things are trending toward less public laws passing over the last decade, as well as record low time in session and other congressional activity.
https://www.congress.gov/bill/118th-congress/senate-bill/870...
A lot of what happens in Congress is obvious to do and everyone agrees. While the media certainly focuses on the handful of things the two parties are at odds over, most of the lawmaking done by Congress is not controversial between parties, and is simply passed, so we don't hear about it.
Because both parties are scared eventually the other party will be back in the majority.
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#...
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 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.
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.
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.
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.
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.
In particular it gives people permission to vote for a candidate they like but don't expect to be able to win.
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.
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.
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.
The point is that building a piece of software that is going to be in use for several+ years is creating an asset. It just goes against our intuition since this industry is so driven by fast fashion, and the bookkeeping of specific components, their depreciation schedules, early end of life, (etc) seems like needless complexity.
You can expense such time as opex, but it has to be justified, and that's often difficult to do. Did you fix a bug by refactoring some code to avoid the problem? Is that capex or opex? Can you convince the IRS of such?
The old (and now new) rules eliminated this accounting game and uncertainty.
For example if you pay someone to fix a leaky roof and they replace a section of a given size, can you call it a repair/maintenance expense or should you be depreciating it as an improvement to the building? Can you convince the IRS of such? The only reason this has more straightforward answers is that accountants have been answering this question longer.
At this moment, the law came back to 1-year deprecation.
But seriously what is with this trend of throwing out simple reframings as if they're insightful on their own?
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.
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.
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.
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)
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.
This is indicative of ignorance. There is a reason why we have these rules.
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.
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…
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.