Hacker News Reader

Comment by TuringNYC | Hacker News Reader

Love this note. For those interested, this is the Tax Cuts and Jobs Act (TCJA) of 2017 Section 179.

For a software engineering business, the Tax Cuts and Jobs Act (TCJA) of 2017 significantly impacted how software costs can be expensed under Section 179. While Section 179 previously allowed for the immediate expensing of many software purchases, TCJA reforms restricted this deduction primarily to "off-the-shelf" software. Custom-developed software and internal development costs are no longer eligible for Section 179 expensing and must now be capitalized and amortized.

Under the TCJA, Section 179 cannot be used for software that a company develops for itself. This includes the direct costs for the engineers, programmers, and other personnel involved in the development process.

The report not addressing this elephant in the room is a disappointing.

View on HN

I think it may have been a one-two punch of §174 and the end of ZIRP.

Of note, the OBBB reinstated the ability to deduct R&D, so businesses are no longer required to capitalize and amortize R&D expenses (including software development).

https://warrenaverett.com/insights/one-big-beautiful-bill-se...

I was talking about zirp in another thread and got downvoted. But yes, companies were taking out low/zero interest loans and hiring people in hopes of making 1-2% on it, which worked for awhile. It doesn't work at 4-5%, though. We can't pin our hopes to zirp anyways. But a lot of sketchy activities around investing were accomplished because of zirp.

Section 174 was the big one that affected how SE salaries could be deducted, that many blamed for the start of layoffs.

However, that's back for tax year 2025, so why aren't we seeing the jobs come back? Maybe it really was 174 then, but AI now?

>why aren't we seeing the jobs come back?

It was only just reinstated, so it's probably too early to see the effects.

I also expect that despite the restoration of Section 174, companies realized that they not only overhired during ZIRP, but also that they don't actually need that headcount, given the outcome of Musk's Twitter layoffs. There were so many prognostications that Twitter would imminently implode after downsizing from ~8k to ~1.5k employees, and when these claims never came to pass, it was a wake-up call to the rest of the industry [0].

[0] https://www.livemint.com/companies/news/elon-musk-fired-80-p...

I don't think many people really doubted that Twitter could keep itself up and running.

But that "everything app"? It hasn't happened. The money transfer app ("Twitter Payment Platform")? Still MIA.

>I don't think many people really doubted that Twitter could keep itself up and running.

Oh, they sure did: https://news.ycombinator.com/item?id=34617964

Even in that thread, a lot of people were saying "it's only been three months, give it a bit more time."

And they were right, I think. Twitter's UI has degraded. I can't see this tweet linked from the thread: https://x.com/Grady_Booch/status/1620720537805922306 - it gives me an error. It might have been deleted, but Twitter just says "something went wrong". And I don't think it's even possible to view threads anymore without logging in?

But more importantly, X has not released any substantially new features within the last 3 years. And I bet that it won't release anything new for a while, and anything they _do_ try to release will be laughably broken.

Existing features are also suffering and going unfixed. If you browse any tweet with more than a few dozen replies, loading replies takes a notable amount of time, and X very conspicuously does not load all of them. Sometimes changing reply sorting algorithms loads entirely different batches of tweets.

Besides that most basic functionality, many times notifications are not sent when the notification settings would suggest they should be. And of course, moderation has fallen by the wayside, although that's more of a policy shift than a technical failure.

Incidentally, those defects would be good for censorship with deniability.

(Occam says deficit of institutional capability is the most likely cause. But that could also turn into a feature.)

> But more importantly, X has not released any substantially new features within the last 3 years.

Just on top of my head, there's the ability to write longer texts, the AI integration (that seems fairly popular in there). There was also some revenue sharing scheme where accounts can get paid for engagement. And from the point of view of management, making it impossible to view threads without login would also be a feature (as in "something we have to deliberately implement").

It's not a lot, but I don't think the pre-Musk Twitter changed even that much in the 3 year period before the acquisition.

I don't understand this thread - twitter is pretty much entirely dead, like stackoverflow - in some zombie state before getting the plug inevitably pulled in a decade or so. Its revenue halved since 2020.

That's due to Elon's gross mishandling of Twitter governance (e.g. demanding that the recommendation algorithm be tweaked so that literal Nazis dominate people's feeds), not due to any technical failings of the platform as a result of downsizing the engineering staff.

I doubt it. There are no Nazis in my feed.

For some people, everyone else is nazi.

This is a thought terminating cliche, ironically about a thought terminating cliche. X does have a problem with actual, literal, antisemitic, genocidal Nazis. No funny business or stretched definitions. Nazis. Dismissing it just because of a few people going by the Nazi bar analogy risks normalizing the actual fucking Nazis we're dealing with. "Oh everyone's a Nazi to you people" is a crazy thing to say when the individual under discussion is screaming about globalist cabals of bankers ushering in white erasure. And that is who is getting algorithmically elevated on X.

Also plenty of racists and homophobes, more than I see just about anywhere else on the internet. And more wild, rabid hate surrounding trans people than I see anywhere outside of narrow, festering cesspools in wastelands like 4chan.

I believe you that there are literal Nazis on X, just as there are on every social media platform (and society in general). I despise Nazis but again I literally never see them on my feed so I find it hard to believe that this is a major problem or that the platform is boosting that content. If you're seeing a lot of Nazi content then you're probably following the wrong type of accounts.

No, in fact I block every such account I see. I go on Twitter for inspiration of various kinds, not for doomscrolling, although I recognize that that's in vogue. But the owner of the platform has been demonstrated to artificially push posts and accounts into people's timelines and notifications, particularly his own, and he has retweeted, replied to, and otherwise boosted blatantly antisemitic conspiracy theories. It's pretty well documented as something that does actually happen, and not just as some sort of algorithmic quirk.

Twitter really is a hellscape. I was drawn in for a few days recently and started getting affected by the barrage of relentless right-wing garbage. And for those on twitter it seems like the most important information in the world when it’s just a dopamine pump of rage and fear. Easier just to switch it off and live your life in peace.

Net income/profit is what matters, revenue is largely irrelevant. Your own date is a perfect example of this since Twitter somehow managed to lose a ton of money in 2020 when they did indeed see record revenue, probably owing to over-stuffed election coffers. X's user counts and EBITDA are at record levels. In 2024 it was $1.25 billion on $2.7 billion revenue, contrasted against 'old Twitter's' $0.68 billion on $5 billion revenue in 2021. [1]

[1] - https://archive.is/evLAL (WSJ archive)

Doesn't this forum periodically discuss an article[*] about profit not really mattering in the grand scheme of things? (As in, profitable and growing companies are capable of showing profit whenever they want, and conversely to show no profit if they so wish.)

[*] This one I believe - https://commoncog.com/cash-flow-games/

The numbers I referenced were EBITDA, which is mostly the point of that article.

But a software company shouldn't really need to show even EBITDA. Amazon didn't between 2000 and 2012.

I'm not sure this is true. Amazon was investing heavily in things that would be reasonably expected to yield future gains, like fulfillment centers and just broadly expanding their logistic capacity. But for Twitter? So far as I know, most of their expenses were just ongoing operational costs and which seem to have been greatly bloated owing to mismanagement.

I also think it’s fashionable to have a smaller headcount these days. Historically, the dynamics of businesses encouraged rising headcounts, as ICs weren’t as valued as managers (salary caps basically, as impact for ICs is hard to measure unless you are in sales), and managers generally view headcount as a metric to career and salary growth.

So there was just this general pressure from the middle up to grow instead of paying more to existing staff or finding some other way to spend the money. After all, investors generally want you to spend the money you have access to, otherwise they’ll put it to use elsewhere.

It seems that there is external pressure right now from investors, and on to executives, to push headcounts down as there is a general feeling that good companies should be able to leverage AI to become much more efficient, and higher headcounts just burn money and bog things down. Whether or not that’s true is another question, but the perception exists.

I’m not sure if this is a fundamental change in the dynamic, or just a temporary push against it that will eventually lose steam.

> good companies should be able to leverage AI to become much more efficient

I feel like this should be a “both and” situation. AI is not a panacea. If your company has 10 good engineers and a ChatGPT subscription, and my company has 100 good engineers and a ChatGPT subscription, we are going to move considerably faster.

Until someone gets an exclusive contract with AGI, it doesn’t change things.

This isn't how it practically works though. You hit a saturation point where there's no more work to be done. There's only so much software to write, only so many ad campaigns to push, sometimes you just need to maintain, stabilize, and not iterate. If you have a problem that requires 10 engineers, 100 isn't going to speed it up. 9 women can't make a baby in 1 month and all that.

Recruiters have been blowing my inbox up since the day Trump signed the OBBB

although I think entry level is still in shambles, for now

Anecdotally I saw a post on reddit about a senior SWE in the USA who was laid off and couldn't get any interviews, with their old job outsourced to eastern Europe. And then this month the people he hadn't even got a response back from started requesting he apply for their jobs. Only one data point but the market might be coming back.

I did a bunch of interviews, I was actually busy with them, earlier this summer. I just can pass the damn system design interview lol ugh

I think if your willing to go to the sf bay and work in an office there are lots of opportunities. Remote and high pay doesn't have alot of options.

Remote is career suicide anyways.

How so?

No other options though.

I did the sf thing and don't want to go back. Don't want to live in NYC or Seattle or commute over an hour from NYC suburbs.

Not remotely true.

As a 20 year remote employee across multiple companies...in my experience, this is true depending on one's definition of career. If you want to advance high in the company, remote is going to stifle you unless the entire company is remote. And even then something as small as skipping an offsite or keeping your cam off will stifle you. Humans like connection, apparently.

My own career progress was much slower and topped out lower than (in my enlightened opinion) much less qualified folks in office.

That said, it's a tradeoff. I -still- wouldn't move to work in office knowing this. I value my family, time, and lifestyle I'm able to afford in a place I want to be more than making tons of money.

In another 10 or 20 years I'm half sure I'll run the numbers and regret that, but so far so good.

I have been promoted while working remote, so I disagree.

I don’t have 2 different 1 hour commute blocks on my calendar. While you’re fighting traffic, I’m working. While you’re rushing through your morning routine, I’m sitting at my computer catching up on slack. While you’re finding the meeting room, I’m reading the meeting prep material. While you’re getting distracted by Sales in your open office, I’m locked in, midway through a 2 hour coding session.

Did you actually get a promotion with pay increase?

Or did they give you a title and say, great job — now we have higher expectations of you!

It was a $50k salary bump.

What you’re talking about seems like an attempt to placate rather than reward.

Wow, congratulations! Thought that only happened in fairy tales!

20 miles to SF, 25 yoe (backend, data, basic frontend), been there done that and all I have got is this automated rejection email

Anecdotally in the past month or so, I've started seeing a large uptick in recruiter reach-outs. I had none for the past year (aside from directly reaching out), but there have been 4 cold contacts in the last couple of weeks alone now.

Also overhiring in the pandemic.

Those changes got permanently reversed in the recent passage of the Big Beautiful Bill by a one-in-a-year reconciliation process that was able to pass with only 51 votes in the Senate with zero votes from the opposition.

Note that the reversal only applies to American software jobs, not offshore ones. So maybe tech hiring is going to pick up again soon. Those changes should've been reversed before they took effect in 2022 by the govt at the time.

What was the reasoning behind this change? Isn’t R&D something we’d encourage to be a tax write off since it reduces the cost of well.. R&D? Or is R&D not as important as I’m thinking?

That administration really didn't like tech

Why do you think they brought it back this year?

Presumably because they see the tech industry as having been brought sufficiently to heel.

It was also in part a budgetary time bomb that was set to go off in the next term. If Trump won, they would have rolled it back. As it was, there were several attempts to roll it back between 2021 and 2024 that were blocked by republicans ( https://www.claconnect.com/en/resources/blogs/manufacturing/... https://thehill.com/homenews/senate/4737635-senate-republica... ) so that the economy would continue to suffer under Biden.

Once Trump won and was in place for 2025, they defused it so that (they hoped) the economy would pick up.

>> Why do you think they brought it back this year?

Huge amounts of coordinated lobbying by the tech industry concentrated on three topics (crypto, section 179, ai deregulation)

The story that I’ve heard (probably on here) is that the administration did it to make the tax bill look more balanced over the long term by phasing out that tax write-off, while giving them (or the next administration) time to reverse it before it really impacted anything. But, nobody reversed it, until this year.

It was done to try and make the bill somewhat pencil out and make the national debt increase less egregious. Everyone just assumed it would be delayed forever or reversed before it could take effect, but those negotiations failed, triggering massive waves of layoffs.

https://blog.pragmaticengineer.com/section-174/

Reply on news.ycombinator.com