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More detail with math here. Lawmakers are discussing delaying these changes for a few years and/or allowing deductions for domestic employees, but all depends o

More detail with math here. Lawmakers are discussing delaying these changes for a few years and/or allowing deductions for domestic employees, but all depends on signing a budget, which is never certain. https://blog.pragmaticengineer.com/section-174/ https://blog.pragmaticengineer.com/section-174/

osigurdson 3y ago
>> let go of 23 engineers employed in India >> lots of devs in Switzerland starts to make a lot more sense, especially now. This seems contradictory.
- moron4hire 3y ago
  They're talking about incorporating in Switzerland, which allows 135% deduction for R&D costs. Yes, Switzerland pays you to run a startup.
  - IndoCanada 3y ago
    But it is difficult to fire them which is a big problem for tech companies where hiring and firing are common
    - rafaelmn 3y ago
      Use international contractors ? Or is the deduction for local devs only ?
    - moron4hire 3y ago
      I hear this a lot and it's difficult to reconcile with my experience. Every US company I've worked at (and that's always been in at-will states) has not made it easy to get rid of people. Even people with woefully bad records of losing money every year and having multiple harassment complaints filed against them were kept for nearly a decade. With one exception (I personally got fired from a tiny startup because I refused to commit timesheet fraud for the CEO), the stories I've heard of the lengths that European companies have to go through to fire someone sound exactly the same to the processes I've seen at all of my employers.
      - refulgentis 3y ago
        You describe a scenario where management didn't want to fire someone - that's why it was harder. In the U.S. only two things get in the way: A) venial corruption B) worrying about unemployment insurance (that's why HR makes you do paperwork documenting an issue). In many European countries you have to file a ton of paperwork and justify it: ex. at Google, they're still working through _January 2023_ layoffs because you have to work with the government itself and there isn't a good* financial reason for it * by European standards. "we need stonk to go up" doesn't fly if you're massively profitable
      - steezeburger 3y ago
        Ive worked at a lot of different earlier stage software companies in the US and we've always fired very quickly, especially if there was harassment, but also just for low performance. Were you working at bigger companies? (aside from the tiny startup where the ceo wanted you to commit fraud) This hasn't been my experience at all.
      - brianwawok 3y ago
        Own a small startup in US. Not hard to fire people. Can do it same day I decide to.
      - jjav 3y ago
        > Every US company I've worked at (and that's always been in at-will states) has not made it easy to get rid of people. That's an internal choice they do, to avoid having a reputation of a company that fires people any second (but then you have companies like netflix which take pride in having that reputation, but make up for it by paying more). However, it's very different from European companies where these processes are (often) driven by laws. In the US there are no employee protection laws (aside from protected classes) so even if the company has a rigorous internal process, they could at any second override it if someone high up says so and you'll be fired in the blink of an eye.
    - saiya-jin 3y ago
      You are mixing up EU and Switzerland, employment laws are very different (and each EU state has its own, but generally much more protective of employees than Swiss ones). One of the reasons Google has long term big center in Zurich, if grass would be greener (since cheaper it is) in say Germany or Austria they would build there
      - bbojan 3y ago
        > One of the reasons Google has long term big center in Zurich, if grass would be greener (since cheaper it is) in say Germany or Austria they would build there I don't think Google has an office in Zurich because it's cheap. It's mostly due to a lot of talent available (ETHZ, EFPL, etc).
        IndoCanada 3y ago
        Offshore centers are cost centers Most important projects are done at the HQ
        ric2b 3y ago
        Cost centers is a nonsense definition, if they didn't help the company make profit they'd be closed down.
    - iancmceachern 3y ago
      And it's hard and time consuming to hire in the EU also
    - bbojan 3y ago
      It's very easy to fire in Switzerland. The notice periods are usually longer than in North America, but everyone having unemployment insurance where they are paid ~80% of their salary for up to 2 years makes is not such a big deal.
      - deleted 3y ago
        [deleted]
      - KittenInABox 3y ago
        Can you say more about unemployment insurance? I haven't heard of this [a us worker] and honestly I also wouldn't mind being more aggressive with my career if I can guarantee ~80% of my income for 2 years should I lose a job.
        Leherenn 3y ago
        You have a mandatory deduction on your salary (2.2%, a bit less effectively if you make over 150k). You need to have contributed for at least a year in the past 2 years before you're eligible. You get 70% of your salary (or 80% if you have children under 25) for two years, capped at 70% (or 80%) of 150k. There are a lot more exceptions, special cases and so on, but that's the gist of it.
        moron4hire 3y ago
        It's state by state and different states have vastly different rules. Here in Virginia, the max, regardless of how much you made, is $378/wk, for a max of 12 weeks. You can't claim it if you're also receiving a severance, and you also have to record at least 4 job applications each week, but the documentation required needs to include information like the hiring manager's full contact information, which usually means the company needs to have replied to your application within that week. I got laid off back at the end of April last year. I got a month of severance, so I couldn't claim UC in May. In June, I was able to do some online sleuthing to figure it out for a few applications out of the dozens I was making in a week, but there were some weeks I wasn't able to scrounge together even 4. I ended up with 2 UC checks for a total of $756 gross (yes, had to pay taxes on it). I don't remember exactly how much, but I do remember I calculated it was less than 20% my original take home pay for a month. Luckily, by the end of June I had a good line on a job and started in July. I got lucky that we could bridge a month of basically "no" income from me. I can't imagine what it would be like for a single-income family living here in one of the most expensive areas of the country.
  - deleted 3y ago
    [deleted]
  - osigurdson 3y ago
    If true, I would like to hire an infinite number of devs in Switzerland (provided the government pays the 135% of salary up front).
    - Shaanie 3y ago
      Not how deductions work. Say 20% corporate tax, a 100% deduction (which is the normal business expense) means you don't pay any tax. A 135% deduction means you'd get to expense 35% more, avoiding those 20% for a "total saving" of 7% compared to a normal expense.
      - osigurdson 3y ago
        Shoot. I thought I was going to be able to absorb all of the Switzerland's wealth for a moment there.
  - Gormo 3y ago
    > Yes, Switzerland pays you to run a startup. It sounds like they're just taxing you less, not paying you anything.
    - therealdrag0 3y ago
      A tax credit gets paid out if you end in green doesn’t it?
      - oldandboring 3y ago
        A refundable credit does, but not all credits are refundable.
      - Gormo 3y ago
        A credit does, but a deduction does not. I'm not sure where the previous commenter is getting this information from, since I can't find any documentation of a 135% tax deduction for R&D in Switzerland anywhere online, but if it is a deduction and not a credit, it means that it just offsets taxes on other income.
- edgyquant 3y ago
  Especially since it seems like you can spread it out over 15 years, 3 times as long, if you have overseas devs. >These costs have to be capitalized and amortized over 5 years – or 15 if labor is done outside of the US. I’m not an accountant so maybe I’m reading that wrong, but if so that’s insane.
  - MattRix 3y ago
    You MUST spread it over 15 years, which is brutal for most companies and will mean no longer hiring any foreign R&D or software development contractors.
    - throwsec7492 3y ago
      @edgyquant, not harder, more tax efficient
    - edgyquant 3y ago
      Why is spreading something out over 15 years harder than spreading it out over 5?
      - brianwawok 3y ago
        This isn’t like a loan where the longer the term the smaller the payments. It’s the reverse. You essentially pay taxes now on income, and can’t deduct costs for 5 or 15 years. So it’s kind of like pre-paying taxes and not getting the money back for 5/15 years. Say that you need to go borrow cash to cover the shortfall. Is it cheaper to borrow money for 5 or 15 years?
        phkahler 3y ago
        Hah I'm still trying to understand how software developer pay should be a deduction at all.
        PaulDavisThe1st 3y ago
User23 3y ago
So far as I can find the last time Congress bothered to pass a budget was 2016 with the prior one in 2010. The government has been funding itself instead with “continuing resolutions” which pretty much just continue spending as the prior year modulo marginal changes. Incidentally this is why federal deficits have exploded since 2010: the financial crisis “one time” trillion dollar stimulus has been continued every year since.
- phkahler 3y ago
  Don't forget the $3Trillion deficit for Covid. First done under Trump in 2020 then repeated by Biden in 2021 so it's not a partisan thing.
- cplusplusfellow 3y ago
  But it would be so draconian to not increase spending insanely every year!
- Ankaios 3y ago
  > So far as I can find the last time Congress bothered to pass a budget was 2016 with the prior one in 2010. The last time Congress passed a budget was for last fiscal year (FY 2023): https://www.congress.gov/bill/117th-congress/house-bill/2617 https://www.congress.gov/bill/117th-congress/house-bill/2617 It was about three months late, but they passed it. This year's is currently at least about four months late, and the federal government is currently operating under a continuing resolution that will expire in March. However, full-year continuing resolutions are rare: the budget bills are usually passed, but passed late.

osigurdson 3y ago

>> let go of 23 engineers employed in India >> lots of devs in Switzerland starts to make a lot more sense, especially now. This seems contradictory.

moron4hire 3y ago
They're talking about incorporating in Switzerland, which allows 135% deduction for R&D costs. Yes, Switzerland pays you to run a startup.
- IndoCanada 3y ago
  But it is difficult to fire them which is a big problem for tech companies where hiring and firing are common
  - rafaelmn 3y ago
    Use international contractors ? Or is the deduction for local devs only ?
  - moron4hire 3y ago
    I hear this a lot and it's difficult to reconcile with my experience. Every US company I've worked at (and that's always been in at-will states) has not made it easy to get rid of people. Even people with woefully bad records of losing money every year and having multiple harassment complaints filed against them were kept for nearly a decade. With one exception (I personally got fired from a tiny startup because I refused to commit timesheet fraud for the CEO), the stories I've heard of the lengths that European companies have to go through to fire someone sound exactly the same to the processes I've seen at all of my employers.
    - refulgentis 3y ago
      You describe a scenario where management didn't want to fire someone - that's why it was harder. In the U.S. only two things get in the way: A) venial corruption B) worrying about unemployment insurance (that's why HR makes you do paperwork documenting an issue). In many European countries you have to file a ton of paperwork and justify it: ex. at Google, they're still working through _January 2023_ layoffs because you have to work with the government itself and there isn't a good* financial reason for it * by European standards. "we need stonk to go up" doesn't fly if you're massively profitable
    - steezeburger 3y ago
      Ive worked at a lot of different earlier stage software companies in the US and we've always fired very quickly, especially if there was harassment, but also just for low performance. Were you working at bigger companies? (aside from the tiny startup where the ceo wanted you to commit fraud) This hasn't been my experience at all.
    - brianwawok 3y ago
      Own a small startup in US. Not hard to fire people. Can do it same day I decide to.
    - jjav 3y ago
      > Every US company I've worked at (and that's always been in at-will states) has not made it easy to get rid of people. That's an internal choice they do, to avoid having a reputation of a company that fires people any second (but then you have companies like netflix which take pride in having that reputation, but make up for it by paying more). However, it's very different from European companies where these processes are (often) driven by laws. In the US there are no employee protection laws (aside from protected classes) so even if the company has a rigorous internal process, they could at any second override it if someone high up says so and you'll be fired in the blink of an eye.
  - saiya-jin 3y ago
    You are mixing up EU and Switzerland, employment laws are very different (and each EU state has its own, but generally much more protective of employees than Swiss ones). One of the reasons Google has long term big center in Zurich, if grass would be greener (since cheaper it is) in say Germany or Austria they would build there
    - bbojan 3y ago
      > One of the reasons Google has long term big center in Zurich, if grass would be greener (since cheaper it is) in say Germany or Austria they would build there I don't think Google has an office in Zurich because it's cheap. It's mostly due to a lot of talent available (ETHZ, EFPL, etc).
      - IndoCanada 3y ago
        Offshore centers are cost centers Most important projects are done at the HQ
        ric2b 3y ago
        Cost centers is a nonsense definition, if they didn't help the company make profit they'd be closed down.
  - iancmceachern 3y ago
    And it's hard and time consuming to hire in the EU also
  - bbojan 3y ago
    It's very easy to fire in Switzerland. The notice periods are usually longer than in North America, but everyone having unemployment insurance where they are paid ~80% of their salary for up to 2 years makes is not such a big deal.
    - deleted 3y ago
      [deleted]
    - KittenInABox 3y ago
      Can you say more about unemployment insurance? I haven't heard of this [a us worker] and honestly I also wouldn't mind being more aggressive with my career if I can guarantee ~80% of my income for 2 years should I lose a job.
      - Leherenn 3y ago
        You have a mandatory deduction on your salary (2.2%, a bit less effectively if you make over 150k). You need to have contributed for at least a year in the past 2 years before you're eligible. You get 70% of your salary (or 80% if you have children under 25) for two years, capped at 70% (or 80%) of 150k. There are a lot more exceptions, special cases and so on, but that's the gist of it.
        moron4hire 3y ago
        It's state by state and different states have vastly different rules. Here in Virginia, the max, regardless of how much you made, is $378/wk, for a max of 12 weeks. You can't claim it if you're also receiving a severance, and you also have to record at least 4 job applications each week, but the documentation required needs to include information like the hiring manager's full contact information, which usually means the company needs to have replied to your application within that week. I got laid off back at the end of April last year. I got a month of severance, so I couldn't claim UC in May. In June, I was able to do some online sleuthing to figure it out for a few applications out of the dozens I was making in a week, but there were some weeks I wasn't able to scrounge together even 4. I ended up with 2 UC checks for a total of $756 gross (yes, had to pay taxes on it). I don't remember exactly how much, but I do remember I calculated it was less than 20% my original take home pay for a month. Luckily, by the end of June I had a good line on a job and started in July. I got lucky that we could bridge a month of basically "no" income from me. I can't imagine what it would be like for a single-income family living here in one of the most expensive areas of the country.
- deleted 3y ago
  [deleted]
- osigurdson 3y ago
  If true, I would like to hire an infinite number of devs in Switzerland (provided the government pays the 135% of salary up front).
  - Shaanie 3y ago
    Not how deductions work. Say 20% corporate tax, a 100% deduction (which is the normal business expense) means you don't pay any tax. A 135% deduction means you'd get to expense 35% more, avoiding those 20% for a "total saving" of 7% compared to a normal expense.
    - osigurdson 3y ago
      Shoot. I thought I was going to be able to absorb all of the Switzerland's wealth for a moment there.
- Gormo 3y ago
  > Yes, Switzerland pays you to run a startup. It sounds like they're just taxing you less, not paying you anything.
  - therealdrag0 3y ago
    A tax credit gets paid out if you end in green doesn’t it?
    - oldandboring 3y ago
      A refundable credit does, but not all credits are refundable.
    - Gormo 3y ago
      A credit does, but a deduction does not. I'm not sure where the previous commenter is getting this information from, since I can't find any documentation of a 135% tax deduction for R&D in Switzerland anywhere online, but if it is a deduction and not a credit, it means that it just offsets taxes on other income.
edgyquant 3y ago
Especially since it seems like you can spread it out over 15 years, 3 times as long, if you have overseas devs. >These costs have to be capitalized and amortized over 5 years – or 15 if labor is done outside of the US. I’m not an accountant so maybe I’m reading that wrong, but if so that’s insane.
- MattRix 3y ago
  You MUST spread it over 15 years, which is brutal for most companies and will mean no longer hiring any foreign R&D or software development contractors.
  - throwsec7492 3y ago
    @edgyquant, not harder, more tax efficient
  - edgyquant 3y ago
    Why is spreading something out over 15 years harder than spreading it out over 5?
    - brianwawok 3y ago
      This isn’t like a loan where the longer the term the smaller the payments. It’s the reverse. You essentially pay taxes now on income, and can’t deduct costs for 5 or 15 years. So it’s kind of like pre-paying taxes and not getting the money back for 5/15 years. Say that you need to go borrow cash to cover the shortfall. Is it cheaper to borrow money for 5 or 15 years?
      - phkahler 3y ago
        Hah I'm still trying to understand how software developer pay should be a deduction at all.
        PaulDavisThe1st 3y ago

User23 3y ago

So far as I can find the last time Congress bothered to pass a budget was 2016 with the prior one in 2010. The government has been funding itself instead with “continuing resolutions” which pretty much just continue spending as the prior year modulo marginal changes. Incidentally this is why federal deficits have exploded since 2010: the financial crisis “one time” trillion dollar stimulus has been continued every year since.

phkahler 3y ago
Don't forget the $3Trillion deficit for Covid. First done under Trump in 2020 then repeated by Biden in 2021 so it's not a partisan thing.
cplusplusfellow 3y ago
But it would be so draconian to not increase spending insanely every year!
Ankaios 3y ago
> So far as I can find the last time Congress bothered to pass a budget was 2016 with the prior one in 2010. The last time Congress passed a budget was for last fiscal year (FY 2023): https://www.congress.gov/bill/117th-congress/house-bill/2617 https://www.congress.gov/bill/117th-congress/house-bill/2617 It was about three months late, but they passed it. This year's is currently at least about four months late, and the federal government is currently operating under a continuing resolution that will expire in March. However, full-year continuing resolutions are rare: the budget bills are usually passed, but passed late.