I agree, R&D change is what triggered 2022 tech layoffs. Coders used to be free, all this play with Metaverse and such was on public dime. As soon as a company had to spend real money, it all came crashing down.
This is a weird take. Employees are supposed to be business expenses, that's the core idea of running a business: profit = revenue - expenses, where expenses are personnel / materials, and pay taxes over profit. Since the R&D change, businesses can't fully expense employees and need to pay (business) taxes over their salaries. Employees - of course - still pay personal taxes also (as was always the case).
Yeah, free is a bit of a odd take. ! ZIRP + section 174 was a huge simultaneous blow to tech.
I would add one more: me too-ism from CEOs following Musk after the twitter reductions. I think many tech CEOs (e.g., Zuck) hate their workforce with a passion and used the layoff culture to unwind things and bring their workforce to heel (you might be less vocal in this sort of environment... think of the activists that used to work at Google).
If a software engineer in a R&D project is using a AI service to develop the software, does the bill count as company business expense or does it fall under section 174?
For those unaware, the "TACO trade" is when Wall Street investors trade based on the principle that "Trump Always Chickens Out". For example, buying in a tariff-induced dip on the principle that he'll probably repeal the tariffs.
Now that someone's said to Trump's face that Wall Street thinks he always chickens out, he may or may not stop doing it.
I agree, R&D change is what triggered 2022 tech layoffs. Coders used to be free, all this play with Metaverse and such was on public dime. As soon as a company had to spend real money, it all came crashing down.
This is a weird take. Employees are supposed to be business expenses, that's the core idea of running a business: profit = revenue - expenses, where expenses are personnel / materials, and pay taxes over profit. Since the R&D change, businesses can't fully expense employees and need to pay (business) taxes over their salaries. Employees - of course - still pay personal taxes also (as was always the case).
Yeah, free is a bit of a odd take. ! ZIRP + section 174 was a huge simultaneous blow to tech.
I would add one more: me too-ism from CEOs following Musk after the twitter reductions. I think many tech CEOs (e.g., Zuck) hate their workforce with a passion and used the layoff culture to unwind things and bring their workforce to heel (you might be less vocal in this sort of environment... think of the activists that used to work at Google).
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If a software engineer in a R&D project is using a AI service to develop the software, does the bill count as company business expense or does it fall under section 174?
That's about to get repealed it looks like.
TACO
For those unaware, the "TACO trade" is when Wall Street investors trade based on the principle that "Trump Always Chickens Out". For example, buying in a tariff-induced dip on the principle that he'll probably repeal the tariffs.
Now that someone's said to Trump's face that Wall Street thinks he always chickens out, he may or may not stop doing it.
13 replies →