Comment by Havoc

Tax authorities tend to look at income side rather than expense as you are. If this thing has a useful life and gives benefit over 5 years thus you get tax deductions over 5 years.

So comes down to whether you view a software engineer as something that has value only in the moment (like HR person) or as creating an enduring asset (code base).

A good code base obviously has long term value and there is no raw material input, just engineer time.

Either way you end up with awkward mismatches somewhere & the deferred version as you say has undesirable chilling effects, but I don't think it is entirely without merit either. Think of it from tax man perspective: They're being asked to hand out 100% of the tax credit today while receiving the income over years time. Switching this back to old model doesn't make the mismatch go away - just shifts it to taxman.