Everyone is trying to find any glimmer of hope for a software development recovery. It ain’t happening, there is way too much of a glut, BigTech has learned to operate leaner and VC funding isn’t coming back since the public market doesn’t want money losing startups and acquisitions are at a much lower valuation. The tax law won’t change that.
Not to mention that the entire US economy is now at the whims of ChatGPT - where the current admiration got its tariff policy from.
I think it’s a material different for SMEs, especially bootstrapped firms small consultancies. But you’re right, I think some skepticism is warranted since there’s a lot of factors depressing the tech sector rn.
I think almost all of big tech have more employees now than they did 3 years ago. There's just not as much growth or anticipation of growth, nor as much turnover.
When VC money is flush in the system, people are leaving their FAANG jobs for crazy scale up money. Now that it's happening less, big tech will have less turnover, etc.
The trends aren’t good and that’s before MS just announced a 6% reduction in headcount and doesn’t take into account enterprise devs where most people work.
I feel like this deserves a little more detail than just the year it was started. During Trump's first administration his Tax Cuts and Jobs Act (TCJA) amended Section 174 of the Internal Revenue Code (IRC), but it started this change in 2022.
>Here is how the S174 change impacted some companies, based on what I found in their annual reports:
>Microsoft: $4.8B additional tax paid in 2023. The company generated a $72B profit that year, so this tax increase was manageable. It’s still a very large amount!
>Netflix: around $368M in additional tax paid – also manageable with $4.4B annual profit.
>Google: the tax change was minimal, because Google was voluntarily amortizing software development expenses for most staff, already. This was for all projects that reached “technological feasibility,” which is a milestone products pass before public release.
Trump's new tax bill is fixing what was broken in his last tax bill (Or maybe the punishment is being removed from tech companies that were perceived as against him in the first administration that have now bent the knee).
Unfortunately the GOP is very excited at the prospect of sending soldiers, drones, and arms to participate in the Mexico cartel wars… and let’s not even talk about school shootings.
Not trying to be snarky or sarcastic. Who reads 1116 pages???? How can congress people vote on a bill that is so large, possibly with very dense info to grasp (haven't read it, just guessing, as it is tax/finance related bill)? This would be hard enough for accountants to read and grasp.
Can't this be broken into smaller, manageable bills?
All politics is about compromise, and getting enough votes to pass. Since most of congress is against most bills, the only way to get anything passed is to lump it all together, and give everyone enough so they can hold their noses and vote for it.
In the current climate it's pretty certain no democrats are voting for it, and the majorities in both houses are razor thin. So pretty much every republican needs to be accommodated with some or other pet project or whatever.
And that's not large. Grok says budget bills over the past 25 years have averaged between 1500-2000 pages, and the big omnibus budget bills get closer to 5000 pages.
On top of that, if you actually try to read a bill, you'll see many references to previous legislation, like, "US Code 123.45 section A is hereby amended to read 'blah blah blah....'" So you have to go read a bunch of other legislation to know what each line item is really about.
On top of that, once it passes and is sent out to the various bureaucracies it applies to, they will put their own interpretation on it, sometimes giving it an expansive interpretation and in other cases dragging their feet, so the actual result can be very different from what you took away from poring over thousands of pages.
You could almost come to the conclusion that the whole legislative thing is just for show, and the real power has been diffused elsewhere.
Well, it means you can deduct engineering salaris immediately instead of amortizing in 5 years, which means more cashflow. That’s kind of a thing at the moment.
Everyone is trying to find any glimmer of hope for a software development recovery. It ain’t happening, there is way too much of a glut, BigTech has learned to operate leaner and VC funding isn’t coming back since the public market doesn’t want money losing startups and acquisitions are at a much lower valuation. The tax law won’t change that.
Not to mention that the entire US economy is now at the whims of ChatGPT - where the current admiration got its tariff policy from.
https://www.theverge.com/news/642620/trump-tariffs-formula-a...
I think it’s a material different for SMEs, especially bootstrapped firms small consultancies. But you’re right, I think some skepticism is warranted since there’s a lot of factors depressing the tech sector rn.
>BigTech has learned to operate leaner
I think almost all of big tech have more employees now than they did 3 years ago. There's just not as much growth or anticipation of growth, nor as much turnover.
When VC money is flush in the system, people are leaving their FAANG jobs for crazy scale up money. Now that it's happening less, big tech will have less turnover, etc.
These are some statistics, I just saw on Blind. I didn’t independently verify it.
https://www.teamblind.com/post/The-golden-age-of-high-TC-tec...
The trends aren’t good and that’s before MS just announced a 6% reduction in headcount and doesn’t take into account enterprise devs where most people work.
There are also more people entering the field.
>Since 2022
I feel like this deserves a little more detail than just the year it was started. During Trump's first administration his Tax Cuts and Jobs Act (TCJA) amended Section 174 of the Internal Revenue Code (IRC), but it started this change in 2022.
Here's good article outlining some of the significant tax implications: https://blog.pragmaticengineer.com/section-174/
>Here is how the S174 change impacted some companies, based on what I found in their annual reports:
>Microsoft: $4.8B additional tax paid in 2023. The company generated a $72B profit that year, so this tax increase was manageable. It’s still a very large amount!
>Netflix: around $368M in additional tax paid – also manageable with $4.4B annual profit.
>Google: the tax change was minimal, because Google was voluntarily amortizing software development expenses for most staff, already. This was for all projects that reached “technological feasibility,” which is a milestone products pass before public release.
Trump's new tax bill is fixing what was broken in his last tax bill (Or maybe the punishment is being removed from tech companies that were perceived as against him in the first administration that have now bent the knee).
There was a lot of fuzz on HN about it, bc basically salaries of engineers fall under that clause.
"Big Beautiful Bill" , is this a real law name ? USA friends, are you OK ?
Sorry, my bad... it's "The One, Big, Beautiful Bill"
It's full of "Illegal Immigrants" this and "Make America $superlative Again" that
Well there isn't an active warzone on the continent unlike some other places I can name, so yeah, I think I know which one I'd prefer
Unfortunately the GOP is very excited at the prospect of sending soldiers, drones, and arms to participate in the Mexico cartel wars… and let’s not even talk about school shootings.
Australia is the only continent without armed conflict: https://en.wikipedia.org/wiki/List_of_ongoing_armed_conflict...
I did not realize Antarctica had an armed conflict.
That link is just a summary of the bill. If anyone wants to read the actual content, it is here: https://budget.house.gov/imo/media/doc/one_big_beautiful_bil...
(1116 pages)
Not trying to be snarky or sarcastic. Who reads 1116 pages???? How can congress people vote on a bill that is so large, possibly with very dense info to grasp (haven't read it, just guessing, as it is tax/finance related bill)? This would be hard enough for accountants to read and grasp.
Can't this be broken into smaller, manageable bills?
It could be, but none of them would pass.
All politics is about compromise, and getting enough votes to pass. Since most of congress is against most bills, the only way to get anything passed is to lump it all together, and give everyone enough so they can hold their noses and vote for it.
In the current climate it's pretty certain no democrats are voting for it, and the majorities in both houses are razor thin. So pretty much every republican needs to be accommodated with some or other pet project or whatever.
And that's not large. Grok says budget bills over the past 25 years have averaged between 1500-2000 pages, and the big omnibus budget bills get closer to 5000 pages.
On top of that, if you actually try to read a bill, you'll see many references to previous legislation, like, "US Code 123.45 section A is hereby amended to read 'blah blah blah....'" So you have to go read a bunch of other legislation to know what each line item is really about.
On top of that, once it passes and is sent out to the various bureaucracies it applies to, they will put their own interpretation on it, sometimes giving it an expansive interpretation and in other cases dragging their feet, so the actual result can be very different from what you took away from poring over thousands of pages.
You could almost come to the conclusion that the whole legislative thing is just for show, and the real power has been diffused elsewhere.
It’s just another tax cheap code. You won’t see significant change to hiring unless existing management thinking changes
Well, it means you can deduct engineering salaris immediately instead of amortizing in 5 years, which means more cashflow. That’s kind of a thing at the moment.