4 ms·

I wonder if all of these layoffs have to do with this tax change: https://beenegarter.com/rd-expense-capitalization-remains-applicable-for-2022-are-you-prepared

by dzink 4y ago

I wonder if all of these layoffs have to do with this tax change: https://beenegarter.com/rd-expense-capitalization-remains-applicable-for-2022-are-you-prepared/ https://beenegarter.com/rd-expense-capitalization-remains-ap... Software engineering as an R&D expense can no longer be used in the same year, or has to be deprecated. If companies are trying to look profitable compared to bonanza years, they can’t be paying a bunch more to the government for extra engineers hired when the rule was still in place.

dboreham 4y ago
Doubtful. Aren't companies judged on EBITDA?
- lotsofpulp 4y ago
  Sometimes, by some people, for some purposes. Buffett and Munger have been notably skeptical of its usefulness for a long time: https://www.cnbc.com/2020/02/12/charlie-munger-warns-there-are-lots-of-troubles-coming-because-of-too-much-wretched-excess.html https://www.cnbc.com/2020/02/12/charlie-munger-warns-there-a... https://finance.yahoo.com/news/charlie-munger-warren-buffett-ebitda-205053585.html https://finance.yahoo.com/news/charlie-munger-warren-buffett... https://seekingalpha.com/article/4326833-earnings-lies-and-why-munger-says-ebitda-is-bull-s https://seekingalpha.com/article/4326833-earnings-lies-and-w...
eclipxe 4y ago
No
karmelapple 4y ago
I think it’s certainly a possibility. And the reality of this has been quite the discussion point during our small company’s tax and budget planning. The tinfoil hat side of me wonders if this was done to possibly provide cover / a reason to do the layoffs. Someone lobbied for this. Congress had bipartisan support for extending the R&D carveouts for software development last session. Yet they didn’t. Why not? They probably just ran out of time in the lame duck session… but still, why not go for a bipartisan win? Perhaps could be that tech companies are the ones legislators are comfortable sacrificing at the moment, although it seems they’d want to attack the big tech giants and not impact every company doing software development. I don’t get it.
- throwanem 4y ago
  > why not go for a bipartisan win? And then not trumpet it to the skies? It reads to me more like a screwup owing to excessive partisanship, and that seems borne out in https://www.forbes.com/sites/lynnmucenskikeck/2022/11/22/will-the-new-congress-continue-to-stifle-domestic-rd-investment/?sh=355dc2fc2925 https://www.forbes.com/sites/lynnmucenskikeck/2022/11/22/wil...

by dzink 4y ago

dboreham 4y ago

Doubtful. Aren't companies judged on EBITDA?

lotsofpulp 4y ago
Sometimes, by some people, for some purposes. Buffett and Munger have been notably skeptical of its usefulness for a long time: https://www.cnbc.com/2020/02/12/charlie-munger-warns-there-are-lots-of-troubles-coming-because-of-too-much-wretched-excess.html https://www.cnbc.com/2020/02/12/charlie-munger-warns-there-a... https://finance.yahoo.com/news/charlie-munger-warren-buffett-ebitda-205053585.html https://finance.yahoo.com/news/charlie-munger-warren-buffett... https://seekingalpha.com/article/4326833-earnings-lies-and-why-munger-says-ebitda-is-bull-s https://seekingalpha.com/article/4326833-earnings-lies-and-w...

eclipxe 4y ago

karmelapple 4y ago

I think it’s certainly a possibility. And the reality of this has been quite the discussion point during our small company’s tax and budget planning. The tinfoil hat side of me wonders if this was done to possibly provide cover / a reason to do the layoffs. Someone lobbied for this. Congress had bipartisan support for extending the R&D carveouts for software development last session. Yet they didn’t. Why not? They probably just ran out of time in the lame duck session… but still, why not go for a bipartisan win? Perhaps could be that tech companies are the ones legislators are comfortable sacrificing at the moment, although it seems they’d want to attack the big tech giants and not impact every company doing software development. I don’t get it.

throwanem 4y ago
> why not go for a bipartisan win? And then not trumpet it to the skies? It reads to me more like a screwup owing to excessive partisanship, and that seems borne out in https://www.forbes.com/sites/lynnmucenskikeck/2022/11/22/will-the-new-congress-continue-to-stifle-domestic-rd-investment/?sh=355dc2fc2925 https://www.forbes.com/sites/lynnmucenskikeck/2022/11/22/wil...