Comment by TheTaytay

Comment by TheTaytay 8 days ago

Thank you for helping to tackle this. The silence on this issue for the past few years from smaller software companies and their affiliates was surprising to me. The recent "time bomb" article was one of the few media pieces that actually took the time to describe it as anything other than a "tax cut for huge tech companies", which was refreshing.

My current favorite theory as to why there hasn't been more of an outcry is that many companies ignored the rule change (either out of ignorance or as an alternative to going out of business), and are forced to remain silent.

stult 7 days ago

Many larger companies have an incentive to attribute layoffs to AI, because that serves to hype their AI products. Basically, they didn't want to say, "we are laying people off for financial reasons." Even though the financial reasons were triggered by a change to the tax code, because that doesn't play well in the media, particularly during a period of elevated profits. So Google, Microsoft, etc. laid a bunch of engineers off to reduce their tax burden and used AI as an excuse.

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charlieyu1 8 days ago

And this benefits big firms because they are the only ones who can afford it. Same for most bullshit laws.

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winter_blue 8 days ago

> many companies ignored the rule change

How does that even work? You’re saying many companies committed tax fraud by ignoring the law change and continued to deduct software developer salaries as they had in the past?

I find that hard to believe.

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TheTaytay 8 days ago

You're right. I take it back - not "most", but I would stand behind "many more than is typical for a change to the tax code".
It snuck up on a LOT of people, including CPAs, and represented tax bills for businesses that were multiples of the previous year's tax bill, and sometimes _multiples_ of their actual cash profit.
It's also so counter-intuitive that you can't deduct software dev salaries, that many people still don't believe it works the way the law says it works. If you read the comments here and in other threads where this has been mentioned, on Hacker News or elsewhere, years into this fiasco, you'll see widespread doubt and misunderstanding. Many people equate this to the same R&D rules for the older tax _credit_ or will argue that it can't possibly work the way the articles say it works. People don't magically begin to understand section 174 just because they run a business, and it's not in their financial interest _TO_ understand how it works. Many can't afford to.

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csomar 7 days ago

Many companies are ignoring laws either by fraud or ignorance. (ie: remote hires are mostly illegal or grey)

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[removed] 7 days ago

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