Section 174 is reversed, mostly

The effects of Section 174 seem to be understated, it aligns with the layoffs and the size of the layoffs.

Someone must have made a mistake. This government just broke its perfect record of only fucking things up.

"Tell HN: Help restore the tax deduction for software dev in the US (Section 174)", 900+ comments, https://news.ycombinator.com/item?id=44226145

"OBBB signed: Reinstates immediate expensing for U.S.-based R&D", 300+ comments, https://news.ycombinator.com/item?id=44469124

One thing that I haven’t seen widely reported on, but this article highlights is that the reversal is only for US based employees, so outsourcing jobs overseas will be more expensive compared to American talent (if salaries are equal). This seems good for the US tech industry, and I’m curious how this form protectionism compares to jobs in other sectors.

It’ll also be interesting to watch to see if this has any side-effects on the job market. In my experience in big-tech, a lot of the overseas jobs were historically supporting roles and “keep the lights on” for legacy services. I can imagine these tasks aren’t valuable enough to pay Silicon Valley salaries, and that’s why lower cost talent was used. It’ll be interesting to see if these roles move to low-COL or remote American workers. I can totally imagine that a European or even Indian salary for a senior engineer in big tech would be livable in some parts of the US.

Watch them increase the H1b cap after this "win"...

> The regulation especially hurt small businesses, bootstrapped companies, and those making a small loss or profit.

How does this affect FAANGs?

> Companies have the choice to amortize salaries if they want.

I am curious, is there ever a time you would want this? Maybe if you’re operating at a loss?

Does this mean a huge hiring uptick in the US/layoff reversal? I do think this law caused some of the bad market. Will undoing it get us back to where we were?

Does the 15-year period for non-US developers only apply to developers? What about roles like designers, product managers, and so on?

> The remaining thing that stings for companies is how foreign devs still need to be amortized for 15 years.

I'm having a hard time seeing the issue with this.

I'm really confused as to how Section 174 made it in in the first place. It seems like a carveout specifically to target software engineers, who, despite being a wealthy bloc, still work for their money.

Why was this done? Simple vengeance in 2022 for how high salaries got and how many silicon valley people were bragging about buying a second house by the slopes? Or was there a deeper policy reason?