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> People here love to complain about this rule but they generally don’t have any reason to justify themselves other than “it’s bad for me personally”. Actually
by addicted 2y ago
> People here love to complain about this rule but they generally don’t have any reason to justify themselves other than “it’s bad for me personally”.
Actually the justification is pretty simple.
Tech startups are the future of the country and the world. That’s how much of the wealth has been built in this country for the past few decades.
And there’s no other country in the world that taxes this way, which means that every other country has an edge over the U.S. now when it comes to tech startups (or frankly, any startup where the majority of the cost is human capital).
It’s even worse in Tech because it’s so easy to work remotely so there’s no loss to establishing a company in the UK for example.
Finally, if a country does impose a certain taxation disadvantage to itself, it’s usually a trade off against some benefit. But it’s also hard to see what the benefit is here because the government is still getting the same money over a few years span.
So it’s dumb because the impact is entirely negative. That’s why no other country has done such a dumb thing either.
- toomuchtodo 2y ago> Tech startups are the future of the country and the world. That’s how much of the wealth has been built in this country for the past few decades. I find this assertion a challenge to agree with. Tech startups certainly market themselves as the future, but in reality, are a vocal industry projecting outsized impact while soaking up capital for inefficient uses (products with no market fit, ecosystem participant self enrichment, etc). > That’s how much of the wealth has been built in this country for the past few decades. This is not necessarily a net positive. Facebook/Meta, for example. Lots of tech wealth is no different than wealth created by big oil or tobacco, and a country adverse to supporting Tech will do just fine without. Certainly, the result will be worse for founders and investors (“startup, cash in, sell out, bro down”), but not for the general public. Wealth for wealth’s sake while diffused harm is caused in the process (whether through the product offered or the inefficient burn of capital) is not an outcome to be supported by public policy. Importantly, we have to be able to evaluate and ask ourselves: is this value? Is this innovation? Or is this just some form of performance art masquerading for the benefit of those selling us magic beans?
- toomuchtodo 2y agoRelated thread: https://news.ycombinator.com/item?id=41086790 https://news.ycombinator.com/item?id=41086790
- acdha 2y ago> Tech startups are the future of the country and the world. That’s how much of the wealth has been built in this country for the past few decades. That’s certainly how founders and VCs like to justify siphoning so much money into their pockets but it’s important not to confuse share price with value. Most of the big hits were companies like Uber or DoorDash whose greatest success was reinventing old ideas with enough backing to evade law enforcement, and while they’ve made their management wealthy the positive impact on society is pretty mixed: marginal but expensive improvements in convenience with worse conditions for workers and large downsides for everyone else (e.g. Uber made traffic and pollution significantly worse and cut into transit ridership), and they’re the one in a hundred successes. I don’t think startups are terrible but let’s not lose track of just how much money was poured into concepts which were clearly incapable of turning into a successful product (e.g. the billions spent pushing blockchains for things they’re bad at) or, especially, the ideas which might have gone somewhere if people were running lean instead of trying to cash out in the VC lottery.
- jen20 2y ago> Uber made traffic and pollution significantly worse and cut into transit ridership Depends where, really. In Austin (for example - but this applies to a lot of the US I suspect), it had no impact on transit because there was no worthwhile transit to have an impact upon. Instead it made drunk-driving rates plummet.
- addicted 2y agoThe problem is this accounting change brings no additional dollars to the government coffers. All it does is frontloads the money. So if your company lasts beyond 3 years you’re in basically the same position. But those first 3 years you’re far worse off. And the government makes no additional money either because the same amount is deducted, just over 3 years instead of 1.
- jncfhnb 2y agoFront loading is a form of getting additional money because of interest Second, any startup that shuts down will never pay the taxes on the revenue they earned but nullified with expensed product building costs.
- jncfhnb 2y agoEven if you did hold this silly belief that the government should subsidize all startups, startups are not the only ones building software
- verdverm 2y agoIt's not subsidizing, the same money ends up in each hands. The difference is in who needs to bear the burden of reduced cashflow. Should it be the small, innovative companies that made & make America great? Or the government who spends too much money as it is? One of the government's jobs is to set rules such that they incentivize certain behaviors. The tax rules can be modified to a middle ground. Put some threshold in $X millions of dollars where you no longer get the choice and let the innovators leverage the money to build more great things. Big tech has the cashflow to weather the transition from 1y to 5y. Companies who spend every dollar that comes in are having a hard time. It means hiring fewer people in one of the most important industries