4 ms·

Labor tariffs, anyone? Might even give the Dems some ideas!

wnc3141 1y ago
certain domestic market protections would be wise for any politician to support, unfortunately the craziness of this administration smothers the conversation. https://www.theatlantic.com/economy/archive/2025/05/trump-tariffs-liberals/682697/ https://www.theatlantic.com/economy/archive/2025/05/trump-ta...
lazide 1y ago
Second 174 changes from BBB pretty much are for the tech industry - dropped the prior 5 year depreciation schedule to immediate, and foreign depreciation is now 15 years (!!!). I can’t see how a US company doing dev outside the US would make any sense anymore, unless they’re big enough to structure everything away.
- alephnerd 1y ago
  > I can’t see how a US company doing dev outside the US would make any sense anymore The tax incentives are insane depending on size. Getting $20-40k in tax credits per employee, 100% tax deductions on R&D, and around 20-50% of total investment cost getting subsidized when building a GCC is the norm in Czechia, Poland, India, and Costa Rica, along with various additonal local or state credits. A number of mid-level leaders (Staff, Principal, EMs, PMs) at tech companies are also on work visas with little to no chance of converting to a GC, so employers will let them open a GCC in their home country.
  - lazide 1y ago
    GCC?
    - alephnerd 1y ago
      Global Capability Center - basically offshored offices that also own product decisions and roadmap. This is increasingly the norm - for example, entire product lines in GCP are owned by their Warsaw and Bangalore office (especially K8s side).
      - lazide 1y ago
        Sure, as long as the corp is big enough they don’t need to write it off against US revenue eh? Otherwise the BBB just shot all that in the head. Pre-BBB, the tax rules favored that kind of outsourcing.
        alephnerd 1y ago
        Yea, GCC style optimizations don't work until your company hit the 150-200 headcount mark. But it is those sized organizations that tend to represent the majority of hiring. A company with 100 or fewer employees tends to be much more hard pressed with hiring, as revenue for these sized orgs also tends to be lower. The Section 174 changes didn't have much of an impact one way or the other for larger companies and organizations. The expectation for output has largely been set now, and even with the current changes I don't see much of an impact on hiring trends. This also doesn't include the impact that AI productivity tools like Cursor is starting to have on AoPs. It's already the halfway point and I myself am starting to see increased proposals from Engineering leadership to leverage Cursor style tooling wherever possible. And a number of the seed and Series A companies I've funded over the past 2-3 years have largely kept headcount below 100 and heavily utilizing automation where possible, and are on track to hit Series B style FCF metrics with a much leaner workflow.
        lazide 1y ago
        Section 174 changes absolutely have an impact on all sizes of orgs. It’s been a major downward pressure for the last several years on the US market, and causing a major outsourcing push. It’s likely to do the opposite now. That said, larger orgs can weather it better - but it’s a fundamental change.
pjc50 1y ago
> Labor tariffs, anyone? Interesting phrasing, but how do you actually make it work? What does it look like on paper? Taxing ""imports"" of services is really, really tricky.

certain domestic market protections would be wise for any politician to support, unfortunately the craziness of this administration smothers the conversation. https://www.theatlantic.com/economy/archive/2025/05/trump-tariffs-liberals/682697/ https://www.theatlantic.com/economy/archive/2025/05/trump-ta...

lazide 1y ago

Second 174 changes from BBB pretty much are for the tech industry - dropped the prior 5 year depreciation schedule to immediate, and foreign depreciation is now 15 years (!!!). I can’t see how a US company doing dev outside the US would make any sense anymore, unless they’re big enough to structure everything away.

alephnerd 1y ago
> I can’t see how a US company doing dev outside the US would make any sense anymore The tax incentives are insane depending on size. Getting $20-40k in tax credits per employee, 100% tax deductions on R&D, and around 20-50% of total investment cost getting subsidized when building a GCC is the norm in Czechia, Poland, India, and Costa Rica, along with various additonal local or state credits. A number of mid-level leaders (Staff, Principal, EMs, PMs) at tech companies are also on work visas with little to no chance of converting to a GC, so employers will let them open a GCC in their home country.
- lazide 1y ago
  GCC?
  - alephnerd 1y ago
    Global Capability Center - basically offshored offices that also own product decisions and roadmap. This is increasingly the norm - for example, entire product lines in GCP are owned by their Warsaw and Bangalore office (especially K8s side).
    - lazide 1y ago
      Sure, as long as the corp is big enough they don’t need to write it off against US revenue eh? Otherwise the BBB just shot all that in the head. Pre-BBB, the tax rules favored that kind of outsourcing.
      - alephnerd 1y ago
        Yea, GCC style optimizations don't work until your company hit the 150-200 headcount mark. But it is those sized organizations that tend to represent the majority of hiring. A company with 100 or fewer employees tends to be much more hard pressed with hiring, as revenue for these sized orgs also tends to be lower. The Section 174 changes didn't have much of an impact one way or the other for larger companies and organizations. The expectation for output has largely been set now, and even with the current changes I don't see much of an impact on hiring trends. This also doesn't include the impact that AI productivity tools like Cursor is starting to have on AoPs. It's already the halfway point and I myself am starting to see increased proposals from Engineering leadership to leverage Cursor style tooling wherever possible. And a number of the seed and Series A companies I've funded over the past 2-3 years have largely kept headcount below 100 and heavily utilizing automation where possible, and are on track to hit Series B style FCF metrics with a much leaner workflow.
        lazide 1y ago
        Section 174 changes absolutely have an impact on all sizes of orgs. It’s been a major downward pressure for the last several years on the US market, and causing a major outsourcing push. It’s likely to do the opposite now. That said, larger orgs can weather it better - but it’s a fundamental change.

pjc50 1y ago

> Labor tariffs, anyone? Interesting phrasing, but how do you actually make it work? What does it look like on paper? Taxing ""imports"" of services is really, really tricky.