4 ms·
Doesnt this new law inhibit rapid turnover tho? Since it takes 5 years to get the full deduction of an employee’s salary, there is an incentive to keep the empl
by bawana 1y ago
Doesnt this new law inhibit rapid turnover tho? Since it takes 5 years to get the full deduction of an employee’s salary, there is an incentive to keep the employee around. OTOH, the souless bean counters who want quarterly (if not shorter) time horizons, will simply decrease starting salaries and use other methods to be net zero. If they do shaft the software engineers, then the converse is true-no employee should stay at a job more than a year because only the corp will benefit as the deduction grows
- eximius 1y agoNot clear to me that this is true. The expense was incurred, they just claim it over 5 years. It's not clear that the same employee is required to be there in subsequent years to claim the expense from year 1 in year 2.
- verdverm 1y agoIt doesn't really matter how many devs you have in any given year. What 174 does is make software a capital expense with no choice in how it gets depreciated over time. It's like having to expense the electricians wages during factory construction over 5 years.
- jmcgough 1y agoThe short-term effect is that engineers become more expensive, so you can afford to hire less engineers. This creates more of a moat for large well-established companies at the expense of new startups.
- variaga 1y agoNot really - it incentivizes having the same total number of SW developers for many years, but they don't actually have to be the same people. If you work at $CORP for 1 year (or 1 minute), $CORP gets to deduct the 1/5th of what they paid you for all 5 years, whether you still work there or not.
- apt-apt-apt-apt 1y agoSeems like it'd incentivize layoffs. You have amortized deductions coming up, with layoffs you pay less to expensive engs and have relatively more saved up deductions than w/o amort. Thus, big short-term benefit to layoffs.
- gbnwl 1y agoIt's already been in effect for the past few years. Does it feel like it's inhibited rapid turnover to you?
- andrewlgood 1y agoNo. Not tied to a specific employee. The expense is simply capitalized then amortized over 5 or 15 years.