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It maybe be easier to understand this viewpoint if we consider that instead of paying a salary to developers, the company could pay an independent contractor to

It maybe be easier to understand this viewpoint if we consider that instead of paying a salary to developers, the company could pay an independent contractor to develop a software application. Clearly payments to the outside contractor would not be expenses needed to run the company, but rather a purchase of an asset. But using inhouse employees instead wouldn't really materially change what the money is spent on. I guess the situation is the same when a company uses its employees to build a house, instead of buying one. So that is the reasoning behind the law I guess but I still don't think it is a good idea. Research and Development is something the government would be wise to promote and support.

15457345234 3y ago
> I still don't think it is a good idea It's not a good idea because it's not how things are done in literally any other country that develops software. This makes all US development shops immediately 1/5th as profitable (on the books) as non-US shops. Yes, they catch up after 5 years, if they're still in business. I'm not sure that I'm overstating it but this law change will, I think, effectively eliminate onshore software development as a profitable activity. It's very strange that this hasn't been checked back given the size of the sector. I don't normally believe stories about US government dysfunction - which seems mostly like a dog and pony show - but for something like this not to have been rectified is a bit odd.
- jncfhnb 3y ago
  US dev shops are immensely more profitable than anything else. It’s not about where the devs are, it’s whether you’re a U.S. company. So that’s all moot.