OBBB signed: Reinstates immediate expensing for U.S.-based R&D
It’s an overstuffed bill because nobody will compromise on anything so the only way to pass a bill that has anything even remotely controversial to either party is one reconciliation bill a year.
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.
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.
Certain politicans know this and have made RCV illegal in their state.
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.
Despite Democrats holding thin majorities in both chambers during a period of intense political polarization, the 117th Congress (2021-2023) oversaw the passage of numerous significant bills, including the Inflation Reduction Act, American Rescue Plan Act, Infrastructure Investment and Jobs Act, Postal Service Reform Act, Bipartisan Safer Communities Act, CHIPS and Science Act, Honoring Our PACT Act, Electoral Count Reform and Presidential Transition Improvement Act, and Respect for Marriage Act.
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.
(Fun question with not-so-fun answers: why isn't the filibuster gone already?)
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#...
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.
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.
Immediate expensing never should have been changed in the first place
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.
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.
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.
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.
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.
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.
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.
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.
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
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)
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.
If so, it sounds almost too good to be true. Why aren't all startups in Canada?
We adopt new products less. We are far more risk averse about purchasing goods or services from startups, far more risk averse about funding them (founders often give personal guarantees to get the investment), value the equity startups offer at far less, etc. Government is far more fussy about accountability with that refundable R&D money, so lots of time is spent filling out paperwork and hiring consultants to do it.
Here is a video that explains a lot about Canadian purchasing:
Honestly, this is a not true
You have a conjecture that all companies keep good jira task tracking and payroll, AND that all companies contract out big accounting firms like KPMG.
From my personal experience I have been at two Canadian companies who didn’t claim SR&ED and therefore your conjecture is disproven with counter examples.
Some companies don’t keep good enough task tracking, some companies don’t know about SR&ED, some companies think the paperwork and auditing is burdensome, some companies are just lazy.
I have discussed this topic with many other engineers (known from engineering school, from working 13+ years in the Paris tech startup ecosystem and from my worker union, whose scope include most tech companies) and I have never heard any of them saying they did not write bullshit CIR reports for bullshit projects. I have myself written my fair share of those bullshit reports. There are even companies whose business is to write the bullshit reports for you in exchange for x% of your CIR credit. I worked with such company.
I don't remember having to defend anything to get the CIR, it's more of a judgment call on whether you feel confident to defend it if you get an audit, and these are very rare. We've had such audit in the past, and it made everyone rewrite each submitted report in a hurry to make them look more serious. No sanction were applied.
At this point, my opinion is that the CIR has very little to do with actual research, but rather it's a discretionary tax subsidy for sectors in which France wants to be competitive.
https://www.canada.ca/en/revenue-agency/services/scientific-...
If you're making websites or doing Shopify integrations, etc, that doesn't actually qualify.
Something truly novel in AI or self driving or whatever -- sure.
This is a naive perspective.
Okay.
SR&ED had 22,758 applications last year. Software development only accounted for 40% of it. So 9000 applications from software dev firms, the majority being very small firms. That is a tiny, tiny minority of software firms in this country.
In reality, most of the software development that a typical growth company does is eligible
No, it absolutely is not, unless you are lying on the application. And yes, a lot of people lie to get government grants and subsidies. And it works out pretty good until someone audits it and realizes that someone is making a shitty instrumentation console that absolutely no one would say advances scientific knowledge and demands the credit back plus interest and penalties.
And yes, I've seen people's absolute bullshit SR&ED applications before. I've had peers ask me to review theirs, where they do bog standard bullshit dev but read on HN how super easy it is, and they convince themselves that "everyone is doing it". Only those signatures on the form that lies about what is actually being claimed.
Again, it's awesome...until it isn't. Which is why the vast majority of software firms are not claiming this.
Further, it's incredibly difficult to quantify countries on this purported socialism scale. Sure, Canada has universal healthcare like every single developed country but the US, but otherwise it's much more of a mixed bag. The US has always been vastly more "socialist" than its advocates think -- the military is a colossal make work project and is straight out of Soviet doctrine for central planning -- and of course the entire agricultural industry exists under a massive subsidization regime, but under the current administration....whoa.... There is no Western country that has a central planned economy, with a president that is taking direct control of corporations (US Steel) and demanding ownership of corporations (TikTok), while enlisting private executives as members of the military exactly like China (https://www.theguardian.com/technology/2025/jun/25/meta-exec...), all while saying the entire economy is a "store" that he has sole control over. Absolutely no one in the US, looking very Stalinesque ala the late 1930s, should be throwing stones about socialism.
When you zoom in on some of the Big Beautiful Bill’s new programs, they appear more “socialist” than anything Canadians have ever enjoyed.
The systems are different, but saying they are completely different is really a stretch. There's a GST that the US doesn't have, which is, ironically, a regressive tax. If you ranked the tax code of countries by similarity to the US tax code, I'm not sure Canada would be at the top of the list, but it wouldn't be that far down.
This is going to make a lot of people's lives a lot worse and I'm against it even though it's an absurd windfall for me and people like me.
So for me this is like, the end of a period where contrarian hackers can be passed on at arbitrary ability in a way that has no lower limit: there is no bottom now and there is no safety net.
But I had about a decade of just never having to care about money at all before that, so maybe there's some karma in it too.
For me this is like, OK I'm definitely not going to get frozen out of work with no place to live anymore, and I'd be lying if I said I didn't sleep easier last night than I have in a while.
But even from that vantage point, I oppose the passage of this bill and will argue to see it overturmed: the people who it hurts are more vulnerable still.
There is no reason to have cognitive dissonance over it.
If you make them each a different bill and then the constituents want to know why they voted in favor of the hot garbage by itself, how can they answer?
Also, ICE has a bigger budget now than most of the world's militaries[1]. But let's not talk about that.
[1] https://www.newsweek.com/immigration-ice-bill-trump-2093456
Capitalists have always been involved in the rise of fascist movements.
Why does that sound so familiar?
Probably because you've seen it repeated so much in your hyper-propaganda bubble of reddit that you've started to believe it
I know what I'm seeing.
Don't believe me? What about subject matter experts that decided to flee the country? https://www.nytimes.com/2025/05/14/opinion/yale-canada-fasci...
Or how about an excerpt from a book written based on post-WW2 interviews of Germans? Does any of that sound familiar at all? https://press.uchicago.edu/Misc/Chicago/511928.htm
They say, ‘It’s not so bad’ or ‘You’re seeing things’ or ‘You’re an alarmist.’
[...]
"But the one great shocking occasion, when tens or hundreds or thousands will join with you, never comes. That’s the difficulty. If the last and worst act of the whole regime had come immediately after the first and smallest, thousands, yes, millions would have been sufficiently shocked—if, let us say, the gassing of the Jews in ’43 had come immediately after the ‘German Firm’ stickers on the windows of non-Jewish shops in ’33. But of course this isn’t the way it happens. In between come all the hundreds of little steps, some of them imperceptible, each of them preparing you not to be shocked by the next. Step C is not so much worse than Step B, and, if you did not make a stand at Step B, why should you at Step C? And so on to Step D.
They say, ‘It’s not so bad’ or ‘You’re seeing things’ or ‘You’re an alarmist.’
Ah, well in that case, it's clear to me Austria is actually the one on the brink of fascism. It's clear to me, having extensively eaten a lot of strudel (makes me an expert in Austria), that it's now a fascist country.
And if you say: ‘It’s not so bad’ or ‘You’re seeing things’ or ‘You’re an alarmist.’ then clearly you're just in denial.
But also, yes, Austria was on the brink of fascism not too long ago. Our far-right party almost got to form a government and their plans were quite sinister.
Thankfully, disaster was averted due to egos and greed - the far-right and center-right couldn't agree on who gets to pilfer to country more, so they didn't end up forming a coalition.
Which is, of course, non-sensical.
States that haven't had that issue before, on the other hand, have a population that is woefully naive to the dangers.
They say, ‘It’s not so bad’ or ‘You’re seeing things’ or ‘You’re an alarmist.’
It provides no way to distinguish between when the thing is happening and when it isn't. If people say you're an alarmist, by what mechanism do you evaluate whether they're correct?
Probably because you've seen it repeated so much in your hyper-propaganda bubble of reddit that you've started to believe it
The last question is pretty important if your argument is "Trump is a fascist and all we have to do is get him out", because then that argument is erroneous and you have to actually change the status quo instead of returning to it.
People like the guy accusing me of being "hyper-propagandized" knowingly weaponize this uncertainty to become willing enablers.
It's like making the argument that denying an accusation is evidence that it's true. It's rubbish because people would also deny it if it was false.
He never does. If you go through his comment history all he does is shill for Germany and EU how they're the best, and shit on Trump and the US how they're the worst and that's it. He never has any arguments beyond appeals to emotional manipulation of "look at the fascists" based on fake or one sided articles. Best treat him as a troll.
Modern China has that. Their system makes use of their (reportedly millions) of incarcerated Uyghurs as low-skill forced labor, mainly in textiles/clothes. Few talk about it, but a significant fraction of Western clothing comes out of these camps.
The 1940's Germans were efficient: in extremis, they realized you could optimize value from concentration camps by starving the workers to death, extracting value from the final months of their lives with minimal operating costs. That was "extermination through labor".
Hacker News, being what it is, will be most focused on the impact on their 401k's. Their grandchildren will read these comments.
Meanwhile, SV darling Curtis Yarvin is plainly insinuating that we should bring slavery back: https://bsky.app/profile/did:plc:gqqqg5xi4p2x4bfgphr7akip/po...
What in the fuck is wrong with people?
The experience of the Einsatzgruppen in Poland showed that mass execution with guns used too much material and was too stressful for the perpetrators. Camps allowed operational costs to be amortized while individual responsibility was diffused.
Foreign R&D must still be amortized over 15 years
If you hire H-1B you should be required to pay a fee greater than it costs to educate an equivalent American. Otherwise you're always in the situation where you have to hire foreigners because no Americans are trained. (or in reality you hire foreigners because they're cheaper for the same role which this no longer makes it the case)
Poor dudes are like ' this is my chance to make it in America' and the high caste indian management treats them like dirt.
The 'old boomers yelling at young people' is a myth in professional America compared to the absolute screaming insults you'd hear hurled at these guys.
And if they messed up? boom, gone, next guy flown in.
raising the minimum wage for H1Bs and indexing it to inflation
Huh? Not even regular minimum wage is indexed to inflation. What are you talking about?
3.5% remittance fees on sending money out of the US: https://www.globalimmigrationblog.com/2025/06/what-are-the-i...
Also (in above source), no ACA subsidies for H-1B visa holders (and others), which likely means employers they will have to pay more for health care if they want to cover their immigrant workers
3.5% remittance fees on sending money out of the US:
The version of the bill that passed a 1% excise is applicable "only to any remittance transfer for which the sender provides cash, a money order, a cashier’s check, or any other similar physical instrument".
"India makes people loan 20% of their foreign remittances to the government interest-free" would be more accurate.
It wouldn't. The TCS can be offset against other tax liabilities. The government pays out 6% interest on excess tax payments. For reference, 364 day T-bills are currently yielding ~5.5%.
The idea is to force reporting and add friction. Not raise revenue.
Expansion of Immigration Fees:$1,000 asylum application fee — first in U.S. history
$1,000 fee for individuals paroled into the U.S.
$3,500 fee for sponsors of unaccompanied children
$5,000 fee for sponsors of unaccompanied children who fail to appear in court
$550 fee for work permits
$500 application fee for Temporary Protected Status (TPS)
$400 fee to file a diversity immigrant visa application
$250 fee to register for the Diversity Visa Lottery
$250 visa integrity fee
$100 year fee while asylum applications remain pending
$100 fee for continuances granted in immigration court
$5,000 fee for individuals ordered removed in absentia
$1,500 fee to adjust status to lawful permanent resident (green card)
$1,050 fee for inadmissibility waivers
$900 fee to appeal a decision by an immigration judge
$900 fee to appeal a decision by DHS
$1,325 fee to appeal in practitioner disciplinary cases
$900 fee to file motions to reopen or reconsider
$600 application fee for suspension of deportation
$600 application fee for cancellation of removal (permanent residents)
$1,500 application fee for cancellation of removal (non-permanent residents)
$30 fee for Form I-94 (arrival/departure record), up from $6
The Senate made a lot of changes (Byrd rule also nuked a lot of stuff) so old articles are of limited use to the final bill.
I don't even know if[2] is the actual final text as there is neither an enrolled or public law version on congress.gov yet.
It's super annoying how often we can't read the final text of a bill before Congress votes on it.
[1] https://www.congress.gov/bill/119th-congress/house-bill/1/te...
[2] https://www.congress.gov/bill/119th-congress/house-bill/1/te...
Edit: Oh you mean costs in general, not in the context of section 147
This fixes the problem, so now if you spend $100 on software developers, and you make $100 from the software, then you have $0 income, instead of $80 income.
The R&D done by Canadians is booked against Microsoft Canada, so in my mind the Canadian laws around R&D would apply and not the USA laws of 15 years old amortization?
Am I missing something?
But offshore wages are often 50–70 % below U.S. rates:
• Even after the slower amortization drag, hiring at half the cost nets you ~30 % total savings on R&D headcount.
• On a pure cash basis you only need ~20 % lower wages to break even; most offshore markets easily exceed that.
• So the labor-cost arbitrage far outweighs the tax timing penalty unless your foreign salaries are less than ~20 % below U.S. levels.
In short: the 15-year amort rule hurts your tax deduction, but 50 %+ lower offshore wages more than make up for it.
The rest is coming up with SDDs and reviewing AI’s code.
I can easily see most devs, doctors and lawyers automated away in the next couple of years.
Even a perfect eval loop like failing tests end up 80% of the time with them creating something way too complicated since they solve one visible but not root issue at a time and build on top of that hacky foundation until again I end up reverting it all
You can tell it “implement feature X” and it’ll go and do whatever’s easiest for it, often something dumb, that’s when people usually think “it’s dumb, won’t replace devs” and give up. Or you can nail down your requirements by talking to it and describing what you’re looking for, often it comes back with things you hadn’t considered or ways of doing things you didn’t know. Then just tell it “implement this SDD” and watch it one shot it in an hour or so.
There’s also pain points - some languages like Swift have changed so often and there’s little open source code to train on out there, so it’s on the worse side if you do iOS development.
It’s a new skill that needs working at, but in the end your output is significantly increased.
in the end your output is significantly increased.
The claim you're arguing against is that AI will replace software engineering as a discipline. Seems like you're instead saying that it will increase developer productivity, which no one disagrees with.
Obviously we’re not yet at the point where the CEO can enter “build me the next Uber” in Claude Code and watch the stock price go up.
And even with reviews you can currently plausibly automate only the code correctness check part, the juicy part of reviews is always manual testing of the change and doing the logical reasoning if the change is doing a meaningful thing. And no, the ticket with the spec is not a reliable source of this info for an LLM as it's always just a partial understanding of the concept.
I don’t think ai will replace the career of software development but I do think the tools we will be using to to it will be dramatically different.
Software developers do X and Y. AI thing can now do X, so it's used for that, and it's cheaper, so the number of projects increase because you get more demand at a lower price. Those projects each need someone to do Y.
Seriously, that seems unlikely.
Changes like this may have an impact on employment but it’s impossible to observe the results in a vacuum.
Given that most large companies are towing the “AI means less jobs required” line, it seems likely that this will, at best, modestly slow the rate at which companies divest themselves of software developers.
I cant see any reasonable reason, in a broader context, this would have a meaningful impact.
(Yeah yeah, AI means more jobs one day maybe, but right now that is categorically not true, and the future is always pure speculation, but in the near term, the impact of this seems like it probably wont be material to me; maybe a small reduction in the number of layoffs)
I cant see any reasonable reason, in a broader context, this would have a meaningful impact.
A significant amount of software dev employment is in startups. Companies that are spending on development, but aren't making much money yet, will see a huge benefit from this. The change in tax liability could mean a single seed or series A round paying for an extra 1-2 devs.
The US Congress is practically able to pass only a single giant bill every year. To work around its own deficit rules, these bills are packed with taxation time bombs where rules have expiration dates or delayed starts several years in the future.
Then, if Congress doesn’t get around to defusing its own time bombs, you get situations like this R&D expensing fiasco where American businesses and employees pay the price. Unless the bomb is hopefully retroactively cancelled, like happened now.
On top of this madness, there’s an executive branch operating like a runaway autocracy, producing a flood of executive orders that intentionally flaunt laws and even target specific private entities (e.g. Trump’s attacks on law firms that worked for his opponents, and universities he doesn’t like).
How long can a nation function like this? If the bond market loses faith in this process, there could be mayhem. Will be interesting to see if the passage of BBB impacts US debt when markets open again on Monday.
It should honestly be banned for any election and primary across the country and be replaced with approval voting or Condorcet methods or something else that are strict improvements.
> taxation time bombs where rules have expiration dates or delayed starts several years in the future.
> ...
> Unless the bomb is hopefully retroactively cancelled, like happened now.
as an example, the cuts to medicade don't start until right after the next midterms (which most are expecting to strongly favor democrats)[0]
[0] https://ccf.georgetown.edu/2025/05/27/medicaid-and-chip-cuts...
It's not a time to be watching though, but to act.
Sure, foreign R&D still gets amortized over 15 years (NPV ≈59 % of a full write-off, so you “lose” ~8.6 % of your R&D spend in present-value terms, and only 6.7 % of the cost is deductible in year 1, creating a 19.6 % cash-tax gap). But offshore wages are often 50–70 % below U.S. rates:
• Even after the slower amortization drag, hiring at half the cost nets you ~30 % total savings on R&D headcount.
• On a pure cash basis you only need ~20 % lower wages to break even; most offshore markets easily exceed that.
• So the labor-cost arbitrage far outweighs the tax timing penalty unless your foreign salaries are less than ~20 % below U.S. levels.
In short: the 15-year amort rule hurts your tax deduction, but 50 %+ lower offshore wages more than make up for it.
On paper, offshoring has made sense the entire time, and yet here we are in 2025 and companies still hire American devs. Not only that, they often fly in foreign devs just to pay them more here than if they had just offshored to their home country.
The issues of quality and whatnot are at their core racist IMO but are made real because of the timezone issue. The norms and culture expected in the home time zones don’t translate easily and result in an impedance mismatch and a different measure of “good.” Because the remote team is isolated and unempowered they always struggle to adopt the standard of the team and to some extent can’t ever succeed in the quality space as it’ll be an ever shifting goalpost whose reasoning is effectively hidden. Then layer in the latent resentment on both sides and the whole situation is bound to fail, but the home teams have the advantage of being resident with the only management that matters.
I wish everyone involved would realize the experiment has failed. But CFOs are too powerful in most companies large enough to reasonably pull off outsourcing at all and the need for the CEO to please boards and investors who just operating off the financial statements and HBR white papers are too disconnected for why these efforts fail.
Unfortunately the current persecution of immigrants in the US will drive these arrangements more and more. Rather than on shoring local foreign talent with the collocated team, foreign talent will opt to avoid the fear society being birthed. This will lead to a strong incentive to follow talent to their home country leading to more imbalance in talent disoriented time zones. Maybe this would require everyone to figure out the above issues but I seriously doubt it. I think it’ll just make everyone less effective and not achieve anything positive for anyone.
I'm in Europe now and it definitely is easier to set up calls with my South African colleagues than the American ones.
Americans have a... distinct work culture and companies - local and foreign - are not stupid, so nowadays they aim for the 50-75 percentile in terms of compensation.
On top of that you absolutely need to be fluent in English, which disqualifies half the candidates right off the bat.
All this combined makes it not obvious whether one would want to/could work for an American company - particularly if it's through various middlemen.
US used to be 100% worth it, but over the course of the last 25 years the ratio of GDPs per capita between USA and my country fell from 5.5 to around 3.75 and compensation naturally followed.
Lastly, the dollar fell 15% since the start of 2025 against my country's currency and that has had an effect on available openings.
> Americans have a... distinct work culture
Another way to look at it: If your country was much richer than the US the model would be flipped. Do you think Americans would post a similar generalisation here? Yep. Not much being said.
There are many reasons: It’s difficult to understand _intention_ when deprived of non-verbal communication and working in a choppy network call. Even if one can gloss over communication needs etc. there’s burnout looming around the corner and natural, healthy laziness getting into the way. Sometimes even internal politics might be blocking knowledge/access/contribution for more or less peculiar reasons.
It’s not like it’s impossible to hire remote engineer, yet my (completely unmetered) estimates out of experience is that approx. 10% of engineers willing to work remotely can sustain health (physical and mental) and be efficient outside of 1-2 years of honeymoon period.
There was some tumbling around COVID but IMO both stationary jobs and remote ones are doing well on mid-high quality positions.
It used to be totally non-controversial and completely validated by direct personal experience that only a minority of the population is built to work remotely. It’s so silly this is even an argument when our entire society and education is built on in-person interactions.
I think the 10% number is variable depending on the org you are hiring into. A company that was never built to be remote or put any thought into how information and communication systems must be different than office? 10% may even be high. A company built from first principles with lots of thought and intentional design behind business processes being remote only? Probably much too low. It will be reflected even in the types of personalities being hired on average.
If you reach for video calls as a solution to your remote companies communication issues you have completely failed and probably would be better served with fully on-premise. This would be the first question I would ask as an interviewee for a remote role. Any company regularly engaging or encouraging this means leadership is simply trying in the worst possible way to recreate an office environment and thus you can expect nearly everything else process based to be horribly broken for a remote company. I have some other “tells” as well, but this one stands out as the simplest as it displays a total disconnect with the reality of how to build remote teams. If you can’t function like a well ran open source project you are almost assuredly doing it wrong.
I wouldn't agree that most people aren't built to work remotely, but I have always maintained that it is a skill that takes time to build. Which is why it's unfortunate that RTO happened so quickly.
Of course I always prefer remote work for companies in the same city. Being able to come in easily when necessary helps a lot.
Of course I always prefer remote work for companies in the same city. Being able to come in easily when necessary helps a lot.
I wouldn't really call this "remote work" though. I know the terms are a little fuzzy.
My favorite option is incredibly selfish for me. I love working from home relatively close to an office I can come into at any time I wish. This requires everyone else working in the office on a daily basis so I can come in as my whims desire.
That is not remote work though. That's working remotely for an in-office organization and it only works if you are in the extreme minority in some special positions. Fully remote orgs with no offices whatsoever are a different beast entirely in my mind and require much different organization and communication setups.
It used to be totally non-controversial and completely validated by direct personal experience that only a minority of the population is built to work remotely.
I disagree with this. I beleive we just need better tools to support comfortable remote work. Big corporations are not interested in researching and developing such tools. And new innovative remote work tools like Virtual Frosted Glass (https://meetingglass.com/) have not yet gained widespread adoption.
Just a note that my 10% experience is based on general population of people who were working remotely for at least 6 months (and being a contractor I’ve switched orgs more often than average engineer)
Looks like big and small tech are mostly doing things wrong then?
I see lots of people thriving in remote. Main reasons being a huge increase in quality of life. Regaining 2-3 hours of senseless commuting time per day, getting small household chores done over lunch, not having to schedule repair and maintainance appointments in the weekends etc. is huge.
Now I do agree it is not for everyone. I see especially younger people living alone not coping to well. Part of the reason is they (ab)used the office as a socializing place, and are not used to organizing a personal social life outside work. There's also people that don't actually have much work outside of attending office meetings, and nobody thrives sitting in Teams calls all day.
Then there's also real downsides. Some people living in shoebox appartments in the city just do not have the space. W While work can be done (more?) efficiently remote, but carreer climbing needs in person contact. It's like dating. Real dinner or a video call? No comparison.
Best of both worlds would be 0 commute time to a luxurious private office inside the company premises. All the rest will be tradeoffs and compromises either way.
What you’re saying is true especially in the honeymoon phase, but the running joke is that you don’t really live remote life unless solitude made you name a pigeon. I’ve seen careers of many of my peers and usually 5 years in people starts to seek on-site.
There’s another point to take into consideration though. In Europe commute is usually less than hour and for many morning routine is an opening to watch movies/read books/listen to music or podcasts. Some travel with friends so that’s a social occasion too. Given accounts of my US colleagues where it’s usually lone drive back and forth experience is different.
Yet remote means omitting or social events and being outsider in the most-social environment (especially for men). Even hybrid with one day is much better than completely remote.
What I found over the years is that no one can say what differentiates remote-able to non-remote. Quiet back-seat engineer can get depressed after year of remote and that guy who is always heart of the party can thrive in remote. It’s just… it wears people down quickly and problems are usually creeping. Back pains coming from tension. Working hours slowly inflating to compensate for extra 10 minutes spent on lunch, this one time when you are bored at 8pm because you are bored in front of computer so why not help someone.
Maybe I’m biased but I find situation that some people are remote and some aren’t to be a healthy one. This preserves local jobs while also making an opening for those who want to do remote work for any reason whatsoever. And this honeymoon period is good to check out if you’re fit for remote or not (and gives enough churn to provide opportunity to try).
When discussing remote vs non-remote with a colleague some time ago over lunch, he mentioned that "remote is an extreme version of yourself", so those inclined to slack off will slack off way more to the point of being unproductive, and those inclined to work longer hours will eventually just spend all their time working... Maybe over-simplified but I think he was onto something.
unless solitude made you name a pigeon
This is kind of hilarious because I moved to Wyoming a few years ago and have recently started naming the magpies.
If internal politics are blocking knowledge, access, & contribution of any employee the correct action is not to hire them. If they are already hired, the correct action of management is to offer them severance.
My experience working in software startups is that the average retention period of an employee is 2 years, in any work environment. What you're calling the honeymoon period is effectively just the average retention of the industry anyways.
* This bit is confusing to me even as I say it - I want to keep it in mind as we move forwards in case we're thinking about it wrong.
* This requirement is really annoying and I'd love to find a way to get rid of it.
* This part is super super urgent, and if we find a way to do it faster without too many other costs we should rework the plan.
You can't "just" write these things down, both because some requirements aren't so annoying you can come out and explicitly say it and because too many parenthetical clauses start to make a document impossible to read. If they're not communicated nonverbally it's hard to communicate them at all.
Rarely companies want to hire communication expert to help shape good practices even though they’re spending hundreds of thousands if not millions on stuff like Datadog etc.
I have this theory that mailing lists with rich search (slash Google Groups slash Newsgroups) are the best communication tools.
Hadn’t had opportunity to try it out though, as it was shunned „old tech”.
I've worked most of my career as a remote employee and I can say that the best arrangement is when the company is as involved in hiring offshore employees as they are with hiring onshore ones. Someone working through an intermediary will always be disconnected from the company's success, as they work for an outsourcing company, and not the US corporation itself.
There are definitely a lot of discussions to be had around employee cultural fit, and I don't just mean company culture. You want a similar mindset and work ethic that your other employees have if you want a high chance of success.
We also need to talk about how some companies haven't been able to successfully adapt their processes to work with remote employees alongside the office employees and sometimes treat the offshore ones as second class citizens, which is not really a great thing.
10, 100 or 500 people team in India who could work in the office together was possible forever.
It will change. I think once other countries become bigger investment centres. Not sure how yet though. US is a good potting soil for a startup because there is this huge addressable and free market. And the startup ecosystem. Then add in that most startups want WFO and minimum synced time zones... and for larger tech all that specialism is in house in the US.
Other countries should use this when retaliating.
Not all countries will see that as a problem.
As far as the US Federal government is concerned it has little practical relevance.
> Offshoring as a tactic emerged in the pandemic when companies realised that being “remote” works just as well.
There is ofc some difference but if you are taking averages you will have much better engineers in a company based in nyc vs berlin.
I’m not an expert but this has been very apparent in places I worked, US based companies just had a better work setup and everything moved faster and with higher quality.
As an example, just saying an engineer is quarter the price in Turkey so you can just outsource there is very foolish. It just doesn’t work that way, maybe in wet dreams of CEOs only.
Similar thing with LLMs, some people are salivating over how they won’t need developers but it just isn’t that way yet.
Seeing how hungry businesses are for outsourcing and hiring remote, and seeing how it isn’t really working that way should be concrete proof for this.
Many companies simply won’t offshore core functions because doing product development on your core product with a team in a different time zone or from a very different culture often doesn’t work. But this will matter to companies that have laid off US engineers or avoided hiring and now won’t have that extra tax burden.
At the time I dismissed it as a bureaucratic process invented by the company; after all, they had no dearth of leaders adding bureaucracy to systems for the purpose of empire-building and, to a lesser extent, asserting self-importance. However, upon reading about Section 174, it made some sense, and I wonder whether they might just get around to removing these processes.
and even the tiniest of development work required the "initiation" of a "project" with budget planning and approvals.
That's fully automateable though, right? Sounds like my script to upload a PR, create a JIRA ticket with the same name, link them up, auto-Done on merge.
While this was the obvious way of doing things there, without this project step I also don’t think it’d have been regarded as a valid classification step for tax purposes.
was all the time you had to spend classifying each engineer's time spent as R&D or 'internal software'every year, me and my engineering lead counterparts would spend almost a day
This is quite funny. Not even a day, almost one.
Other theory were AI and interest rates.
I'm pretty sure next rounds of layoffs will have another "good reason".
Personally, I'm still partial to my pet and hard to document theory of "when headcounts go down, share prices go up - and past a certain size and age, the goal of a massive corporation is not to build things any more, but to pay for retirements through the resale / buybacks of shares"
But, hey, BBB is singed, so everything will be awesome soon, I suppose ?
Gergely Orosz, whose writing is influential in tech spheres and fun to read, has been a loud proponent of the theory that TCJA's elimination of the immediate expense of R&D research cost was the skeleton key explaining technology sector layoffs.
It seems to me to that many technology-industry trends are driven by vibes:
* People seem to love reading articles in any kind of media source about their company's products and are remarkably credulous of them / influenced by their content. Not just PR generating roundup reports of media coverage, this is also engineers and leaders who follow any coverage of their firms quite closely.
* There really does seem to be a sort of contagion effect with layoffs where, once one firm began doing it, everyone did (layoffs.fyi has a lot of data supporting this kind of hypothesis)
* Among founders and engineering leaders, there does seem to be a common set of ideas - not just the group-chat consensus that helped kill SVB, but just an overall whisper network of facts that everyone knows is true - which guide their choices.
Overall it seems reasonable for software-industry employees to hope a narrative takes hold like "we had to lay off lots of people because their headcount didn't pencil out during the annual FP&A cycle under the new TCJA R&D rules, but now that the new law has restored immediate R&D expensing the formula is going to make the opaque headcount number higher, and jobs will be more stable". The idea might even become true if enough people believe it.
Personally I think the layoffs are better explained by another phenomenon, superpersuasion from AI. (My niche view is that the first superpersuader success story was when the chatbots convinced business leaders to reallocate resources to buying more GPUs and LLM tokens and lower investment in the rest of their lines of business.)
This fixes that problem. That encourages both investment in software and encourages software companies to hire.
The popular story currently is that the massive layoffs were due to the tax/accounting change, but in that case why the big players like Amazon etc have so many layoffs? Or is that the popular story because, while Amazon etc are large, by total employee count most people are employed at smaller business that were more affected by this?
Or was the FAANG stuff actually AI after all? The tax change story sounds more plausible to me but I can't connect everything.
With this change one of those factors has been eliminated, so we will see startups/small businesses become a lot more competitive.
Plus this puts pressure on manufacturing, as they will not be able to compete. So yeah, as a tool to boost knowledge economy it works but is it objectively a good thing to do I don't know.
Aside from the direct negative effects: we lose even more to foreign countries who now have even more runway to gain expertise in green energy and sell to everyone else investing in it. Nobody but the 3rd world is increasing investments in coal/oil and there's no money we could make there anyway. So there goes any money we could've made on energy internationally.
Either this country is intentionally being tanked, or we're in the stupidest timeline.
Governments should stay out of the winner-picking business, which they do with money from the public purse, and allow individuals and enterprise to use their own money to have a go at picking winners themselves.
If industry and banks find investment in any particular field unpalatable without Government incentive, then those investments were unpalatable to start with.
Industry and banks will find something better to do with their money.
That's another term subsidised.
I'd argue fossil fuel industry subsidies are a net benefit to society as they help enable cheap reliable energy.
Whereas renewable subsidies are a net negative because they don't. Everywhere more renewables have gone electricity has become more expensive and less reliable, completely antithetical to strong industrial development.
Also, renewables seem to be driven forward largely due to a psychological contagion that a climate apocalypse is nigh, which is turning out to be completely toxic, especially to the minds of the next generations.
Everywhere more renewables have gone electricity has become more expensive and less reliable, completely antithetical to strong industrial development.
Have you heard of Washington state? 75% renewable energy and 10th percentile for the cost per kWh.
I'm more in favour of tax incentivised encouragement, lowering the barriers to entry, and more so when there are proven benefits to the economy and society, and less in favour of government backed loans and direct cash injection.
China, India, Russia, Turkey, Japan, South Korea, and Indonesia (off the top of my head, and a quick google to add a few I missed[2]) have all increased investments into coal since 2020.
The renewable industry in the US was wrought with companies seizing as many renewable credits and subsidies as they can, while providing as little as possible to show for them. If this moves the industry as a whole to focus on projects that are not just marginal at best, we should start to see better traction on projects that actually matter.
We have long been told that renewables are cheaper in every way that matters, so let's see the economics of that play out.
[1] https://www.reuters.com/business/energy/china-roll-back-clea...
[2] https://ember-energy.org/latest-updates/wind-and-solar-repla...
Between January and May, China added 198 GW of solar and 46 GW of wind, enough to generate as much electricity as Indonesia or Turkey[1]
1 - https://www.theguardian.com/world/2025/jun/26/china-breaks-m...
However, market share doesn't really translate into the economics of large scale generation. The projects that are marginal (or negative) in the US and rest of the world for that matter, are costed using whatever the cheapest panels or materials available are. Whether they are local or not does not matter. You are conflating two unrelated things here (local manufacturing capability and power generation e.g. actually deploying renewables).
China meeting arbitrary targets is also beside the point. They are building a tonne of solar and wind, but they are also building more coal too. (Refer to my previous comment in how they along with many other G7 and developed nations are investing more in coal than they were in 2020).
GP made some specific claims which were demonstratably false. The points you raise here aren't particularly related to those.
We have long been told that renewables are cheaper in every way that matters, so let's see the economics of that play out.
Renewables are cheaper now than they used to be. Why? The same reason anything is cheaper the longer you make it: technological improvement, economies of scale, production efficiency, increased # customers, reduced capex, amortized r&d, etc.
"the economics of that" aren't black and white. Just because something is expensive today doesn't mean it will be expensive tomorrow. But if something cheaper exists today, and nobody invests in the expensive thing (because "the market" doesn't see immediate cash gains in it), then the expensive thing never has the opportunity to become cheap.
The renewable industry in the US was wrought with companies seizing as many renewable credits and subsidies as they can, while providing as little as possible to show for them.
The "show" is long-term. That's the whole point of all green energy: it's expensive at the beginning, and then becomes increasingly cheaper over time, to the point you start saving money, and then you keep saving money. But to ever get to that point, you have to invest big at the start. That's what the subsidies are for!
China has a massive and cheap labor force and decades of manufacturing expertise. That makes their products/services cheap and advanced. Unless we literally take over Mexico, we don't have the labor. And unless we start investing now, we'll never have the expertise. Without subsidies, we will never get on renewables, and we will always pay more for energy. Since the whole future of the world is dependent on energy, it might be a good idea for us to invest in it!
But if something cheaper exists today, and nobody invests in the expensive thing
I think you are talking past me. The green bodies have constantly touted how we already reached the inflection point where renewables are cheaper than coal, nuclear, etc. The quiet part that isn't spoken aloud is that these renewables were only economically positive with substantial subsidies and credits. You can't have an honest conversation when the water is mudied to such an extent.
Any green energy project that isn't nuclear is a waste of money and resources.
Nuclear's cost/megawatt is significantly higher than most other options. If anybody is reaching for nuclear it is because they are using up all available capacity through other means. Nobody picks nuclear for cost reasons.
Meanwhile nuclear costs what it does in significant part because the number of new plants is low which requires the cost of designing new reactors etc. to be amortized over fewer plants. But if you build more of them that changes.
Nuclear is expensive and requires red tape and a long time to bring online, but the real benefit is that it can deliver power consistently all day, unlike wind and solar. I think the ideal future includes all of these plus better storage capabilities.
But when a forest is cut, usually a new forest that grows on that place looks different.
Econ 101: A government deficit increases the net financial worth of the private sector.
The US usually increases the net financial worth of the private sector by around $2tn per year, OBBB should move that to around $3tn per year (CBO estimate https://www.cbo.gov/publication/61486)
If you accumulate a dollar per second in net worth, then you become:
A millionaire in 11 days
A billionaire in 32 years
A trillionaire in 32,000 years
So it's a wealth transfer, from those whose financial affairs will remain comparatively static (your dollar will be worth less via inflation) to those who can capture the new money streams.
There are companies which I dont understand why they are keeping all the profits and not reinvesting for R&D or other purposes. I must be missing an angle on this. Apart from investors, what else would it be?
Well, imagine if instead we were _incentivized_ to create lots of bugs in huge releases, because it helped us ship that one important feature that the PM wanted in the middle of the garbage - and also, that we were guaranteed never to have to debug the software ever, and god forbid, to use it ?