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The hidden time bomb in the tax code that's fueling mass tech layoffs

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  • I remember talking about this at the time. It did get some attention, although the industry was quick to blame other things instead, like AI.

    Meanwhile I would argue that most efficiency gains from AI are outweighed by the cost of false positives wasting time and energy, learning prompt engineering, and other testing/fiddling adding overhead.

  • This is why our tax code is broken. There's so many hidden bullshit codes and requirements, that people are fucked unless they can actually spend a fortune on accountants and tax lawyers, two professional that we don't need that many of btw, but our tax code is written to make money and jobs for the rich.

    Fuck the feds.

    How can it be broken if it works exactly as intended? Same goes for the tax laws in my shitstain country.

    I read an article the other day how taxes are a way - and always have been - to redistribute from the poor to the rich. Sounds about right.

  • Meanwhile I would argue that most efficiency gains from AI are outweighed by the cost of false positives wasting time and energy, learning prompt engineering, and other testing/fiddling adding overhead.

    LLMs work in some limited use cases with good data to draw from. Most companies, especially large corporations, have shit data. Current AI cannot fix bad data. They will never do what these guys are promising they will do.

  • Meanwhile I would argue that most efficiency gains from AI are outweighed by the cost of false positives wasting time and energy, learning prompt engineering, and other testing/fiddling adding overhead.

    You're not arguing against anything I've said given I said blame, as in, scapegoating AI for mismanagement and fundamental changes.

  • How can it be broken if it works exactly as intended? Same goes for the tax laws in my shitstain country.

    I read an article the other day how taxes are a way - and always have been - to redistribute from the poor to the rich. Sounds about right.

    Can you find and link me to the article? Ideally, they're to fund public necessities, schools and other infrastructure, roads, etc, fire departments, sanitation, defense, anything used by the collective.

  • How is it that we are only learning about this now💀

    We were, but being set to expire in a decade and redundant 24 hour news cycles means they were designed to be forgotten.

  • I can't tell if it's "the true cause" of the massive tech layoffs because I know jackshit of US tax, but it does make more sense than every company realising at the same time that they over-hired or becoming instant believers of AI-driven productivity.

    The only part that doesn't make sense to me is why hide this from employees. Countless all-hamds with uncomfortable CTOs spitting badly rehearsed bs about why 20% of their team was suddenly let go or why project Y, top of last year's strategic priorities, was unceremoniously cancelled. Instead of "R&D is no longer deductible so it costs us much more now".

    I would not necessarily be happier about being laid off but this would at least be an explanation I feel I'd truly be able to accept

  • I can't tell if it's "the true cause" of the massive tech layoffs because I know jackshit of US tax, but it does make more sense than every company realising at the same time that they over-hired or becoming instant believers of AI-driven productivity.

    The only part that doesn't make sense to me is why hide this from employees. Countless all-hamds with uncomfortable CTOs spitting badly rehearsed bs about why 20% of their team was suddenly let go or why project Y, top of last year's strategic priorities, was unceremoniously cancelled. Instead of "R&D is no longer deductible so it costs us much more now".

    I would not necessarily be happier about being laid off but this would at least be an explanation I feel I'd truly be able to accept

    I found out about this about a year ago while I was laid off. It coincided with when the massive layoffs began. Seems pretty likely to me. Developer salaries aren't low and to lose another 80% on top is a big hit.

    Also a lot of my coworkers are really nervous about immigration right now. This is a bad time to be an Indian tech worker in the US. My team of about 10 could wind up reduced to me and one other guy. We'd even lose our manager and every PM. And this team is responsible for critical software at a major company.

  • Meanwhile I would argue that most efficiency gains from AI are outweighed by the cost of false positives wasting time and energy, learning prompt engineering, and other testing/fiddling adding overhead.

    In my experience, for developers, actual productivity is inversely correlated to AI usage espousal. I straight up had an extremely mid developer tell our CFO (who has no business scheduling meetings about AI with devs in the first place) that AI made them 10x as productive. This of course is complete bullshit, and of course it got the CFO salivating. All of this is madness

  • That’s what makes the politics of Section 174 so revealing. For all the rhetoric about bringing jobs back and making things in America, the first Trump administration’s major tax bill arguably helped accomplish the opposite.

    What an utterly shocking turn of events. /s

    Fucking MAGAt idiots.

    🤦♀🙄 🤡 🖕 💩

    I like how your emotes tell a short story

  • So Trump set a time bomb for who he thought would be 46 and then lost his re-election. Now he has to fix the mess he created - and if he does he will be hailed as a corporate hero for fixing the tax problem he created.

    If he doesn't fix it he will continue to plunge the future of America into chaos.

    Fucking futureless clown people.

  • We were, but being set to expire in a decade and redundant 24 hour news cycles means they were designed to be forgotten.

    At the time, it was part of the whole poisonous structure of the 2017 tax bill, where everything would expire after Trump's presumed 2nd term to sabotage his Democratic successor, confident that no one has long enough memory to realize where it came from.

  • Can you find and link me to the article? Ideally, they're to fund public necessities, schools and other infrastructure, roads, etc, fire departments, sanitation, defense, anything used by the collective.

    I don’t have the article but basically when the rich aren’t taxed proportionally, their wealth and therefore power grows, while the lower classes get squeezed harder as they must give up a greater portion of their wealth in order to fund the obligations toward said infrastructure that keeps the whole machine running.

    When used inappropriately, they are one piece of the larger system that funnels all the wealth upwards at the expense of everyone and everything else.

  • When Congress passed the Tax Cuts and Jobs Act (TCJA), the signature legislative achievement of President Donald Trump’s first term, it slashed the corporate tax rate from 35% to 21% — a massive revenue loss on paper for the federal government.

    To make the 2017 bill comply with Senate budget rules, lawmakers needed to offset the cost. So they added future tax hikes that wouldn’t kick in right away, wouldn’t provoke immediate backlash from businesses, and could, in theory, be quietly repealed later.

    The delayed change to Section 174 — from immediate expensing of R&D to mandatory amortization, meaning that companies must spread the deduction out in smaller chunks over five or even 15-year periods — was that kind of provision. It didn’t start affecting the budget until 2022, but it helped the TCJA appear “deficit neutral” over the 10-year window used for legislative scoring.

    The delay wasn’t a technical necessity. It was a political tactic. Such moves are common in tax legislation. Phase-ins and delayed provisions let lawmakers game how the Congressional Budget Office (CBO) — Congress’ nonpartisan analyst of how bills impact budgets and deficits — scores legislation, pushing costs or revenue losses outside official forecasting windows.

    And so, on schedule in 2022, the change to Section 174 went into effect. Companies filed their 2022 tax returns under the new rules in early 2023. And suddenly, R&D wasn’t a full, immediate write-off anymore. The tax benefits of salaries for engineers, product and project managers, data scientists, and even some user experience and marketing staff — all of which had previously reduced taxable income in year one — now had to be spread out over five- or 15-year periods.

  • How can it be broken if it works exactly as intended? Same goes for the tax laws in my shitstain country.

    I read an article the other day how taxes are a way - and always have been - to redistribute from the poor to the rich. Sounds about right.

    Taxes can go either way. It depends on how they were written.

    The tax code after the Great Depression allowed for massive expansion of public projects in the U.S. It was 63% for the top earners. During WW2 the top tax bracket was at 94%.

    When the boomers were all born the tax bracket was above 70% for the top earners. This high tax bracket is what fueled the creation of a large middle class, public infrastructure, schools, research, space exploration, and the massive military buildup and wars. It also acted as an effective anti-minopoly/oligarchy system because the tax system discouraged it.

    Then in the 80's Reagan slashed the taxes for the top earners down to 28%. its never gotten above 40% since then. Most high earning companies have so many exeptions today that the real tax rate is often 0%.

    Because of it the infrastructure built during the 50's-70's is degrading and falling apart. Public services are declining and the middle class is shrinking as people become more impoverished.

  • It's a paywalled article in Dutch, so I used AI to translate it. The dude is from The Netherlands, but he's mainly referring to the situation in Belgium (interview was in a Belgian magazine). So 'De Wever' refers to the Belgian prime minister, let me know if anything else is unclear, as I didn't check the whooole translation 🙂

    link to the article in Dutch


    This Dutch tax expert wants to overturn our tax system: “That capital gains tax you have is an excellent idea”

    Published: June 10, 2025 · By Peter Casteels

    A Dutch tax expert, Reinier Kooiman, wants to completely upend our tax system.

    Reinier Kooiman proposes abolishing all taxes and replacing them with a single wealth tax. “Why can’t the government take a small amount from your savings, but it can take 50% from your income?”

    Forget the wrangling in the De Wever government about the capital gains tax. During coalition talks, that new tax sparked the toughest debates—but after four months in power, there’s still no compromise.

    Compared to total public spending, it’s largely symbolic. In his new book, aptly titled The Strongest Shoulders, Kooiman offers a much more radical, yet well-founded, proposal: eliminate all taxes and replace them with one clear wealth tax. He’ll now try to convince you.

    That wasn’t his initial goal. Kooiman—affiliated with the University of Amsterdam and formerly at Deloitte—intended to write an academic history of our tax system. The Strongest Shoulders is partly that. He drew inspiration from medieval Italian city-states.

    Kooiman: “My research was purely historical; there was no real history of our taxes. I wanted to trace the principles behind them. Obviously, as a tax expert, I had my own ideas. But only after comparing medieval times to today did I gain new insights.

    I had never realized our system redistributes from the poor to the rich. Our taxes vastly increase inequality, while like many, I assumed the opposite. In the Italian city-states, a uniform wealth tax was levied on everyone. Primitive as it sounds, it’s fairer than today’s system.”
    How it works

    Kooiman explains: everyone pays income tax based on ability, but indirect taxes like VAT, excise, and tariffs are flat. Lower-income people spend a larger share of income on consumption, so proportionally pay more taxes.

    In countries like the Netherlands and Belgium, income inequality is moderate, but wealth inequality is extreme. Our tax system causes it: wealth is never taxed, while low- and middle-income people struggle to build wealth because they pay too much income tax.

    The wealthy can accumulate more easily. Simply raising income tax rates won’t reduce inequality; the super-rich would own an even greater share of wealth overall.
    Lessons from medieval Italy

    Kooiman: “City-states only taxed when major expenses arose—like war. If Genoa needed 4,000 libra, and total wealth was 400,000 libra, everyone paid 1% of their wealth. Tax rates varied yearly, but contributions were equal. They measured ability by wealth, not income.”
    Modern feasibility

    Kooiman admits medieval governments were smaller, less bureaucratic, and more local. Today’s centralized, anonymous systems have moved tax collection far from citizens. Governments now take ~45% of GDP in taxes without public debate over who pays.
    Why wealth tax fell out of favor

    As city-states grew, taxing wealth became complex. Since the 18th century, economists pushed income-based taxation. With capitalism’s rise, capital needed for investment—like railways—shouldn’t be taxed. Kooiman calls this “elitist rhetoric”: if total tax revenue stays the same, there’s still plenty of capital.

    No evidence suggests the wealthy manage their money better than those living off income.
    Practicality

    Belgium and the Netherlands already have inheritance taxes, meaning declaring estates isn’t too hard. Income tax on labor might be easy, but capital taxes provoke debate—just look at capital gains tax arguments.

    Wealth isn’t volatile, so it’s manageable: if someone reports much less, tax authorities can inspect.
    The exchange

    Freedom and equality guide Kooiman: tax shouldn’t redistribute wealth—redistribution should occur through government spending. People should end up equally rich before and after taxes, achieved by a flat wealth tax. A millionaire pays more in absolute terms but the same percentage—no special targeting.

    “A millionaire will pay a lot—but can’t claim they’re being singled out.”
    Rate needed

    Kooiman estimates around 8.5% for the Netherlands; Belgium would be similar. The system is simpler and cheaper. Millions of families currently pay income tax to get social benefits—without income tax, they might not need those benefits.
    Impact by age

    Yes, paying 8.5% of assets annually is steep, especially for homeowners. But young people would pay less and have more chance to buy homes; over-50s would pay more. He estimates young people would benefit and older people would see slight drawbacks.

    “On average, people under fifty would pay less; after fifty, a bit more.”

    He argues that many older people leave large inheritances—money that sits idle. Meanwhile, younger generations bear heavy income tax burdens.
    Asset scrutiny concerns

    Critics say wealth taxes mean inspecting paintings or wine cellars. Kooiman says no exemptions: otherwise, people hide value. But he believes it’s manageable until inconsistencies arise—then the tax office can investigate.
    Resistance

    “The opposition is immense: it feels like theft.”

    Kooiman responds: “Why take 50% from income but not from savings? In my system, no one can say money is taxed twice [income vs. wealth]. We all believe in rewarding work—but in practice, inheritance or lucky sales reward people most. We disadvantage hard workers.”
    Capital flight

    Could wealthy flee or hide assets? He says there are two flight types: moving abroad—which is exaggerated as many resist that—and moving capital via corporations. International tax avoidance is tighter, but tax cuts reduce capital flight fears. Countries used to have 70% top rates; now harder to avoid, maybe rates can rise.

    “Capital flight concerns are overblown. Many people won't emigrate just for taxes.”
    His background

    He left Deloitte for law firm Stibbe, and teaches at the University of Amsterdam. He notes fiscal firms both help clients avoid taxes and shape tougher laws. They are not a “trick box”—the system doesn't work like that.

    He supports Belgium’s capital gains tax.
    Simplification plea

    Tax reforms are politically sensitive. Belgium keeps adding complexity instead of simplifying. A standalone wealth tax would be a step, but only if paired by eliminating other taxes. Otherwise, people won’t embrace it.

    Book: De sterkste schouders, Atlas Contact, 352 pp, €24.99
    Bio: Born 1990 in Deventer; tax law at Univ. of Amsterdam; PhD in 2016 on inheritance tax; Deloitte 2009–2025; joining Stibbe; lecturer at UvA.

  • The delayed change to Section 174 — from immediate expensing of R&D to mandatory amortization, meaning that companies must spread the deduction out in smaller chunks over five or even 15-year periods — was that kind of provision. It didn’t start affecting the budget until 2022, but it helped the TCJA appear “deficit neutral” over the 10-year window used for legislative scoring.

    maybe the key paragraph

  • Taxes can go either way. It depends on how they were written.

    The tax code after the Great Depression allowed for massive expansion of public projects in the U.S. It was 63% for the top earners. During WW2 the top tax bracket was at 94%.

    When the boomers were all born the tax bracket was above 70% for the top earners. This high tax bracket is what fueled the creation of a large middle class, public infrastructure, schools, research, space exploration, and the massive military buildup and wars. It also acted as an effective anti-minopoly/oligarchy system because the tax system discouraged it.

    Then in the 80's Reagan slashed the taxes for the top earners down to 28%. its never gotten above 40% since then. Most high earning companies have so many exeptions today that the real tax rate is often 0%.

    Because of it the infrastructure built during the 50's-70's is degrading and falling apart. Public services are declining and the middle class is shrinking as people become more impoverished.

    Wow, your post sent me down quite a rabbit hole. I suspected 94% was rather high, this page puts it into clearer perspective:

    The “exceedingly high” part of this question most likely refers to the federal income tax’s “confiscatory” top rates coming out of World War II, which the Eisenhower Administration left in place into the 1960s. During the war, the top “marginal rate” was 94%, but 94% of what? Then as now, income tax rates moved up at distinct break points. In this made-up example, consider a 15% rate up to $25,000, 21% from $25,000 to $50,000, and 25% over $50,000. Those making $50,001 or more won’t pay a quarter of their total income, but rather 15% of the first $25,000, 21% of the next $25,000, and 25% of everything above $50K. That’s why the system is called progressive - the percentage rate progresses upward with income, but the higher percentage applies only to new (marginal) income above each break point. In 1944-45, “the most progressive tax years in U.S. history,” the 94% rate applied to any income above $200,000 ($2.4 million in 2009 dollars, given inflation).

    Very few individuals encountered this top rate, however. The actual proportion of earnings citizens paid as income taxes in 1945 was far lower: for the poorest 20% of Americans, 1.7%; for the next 20%, 6.2%; for the middle quintile, 8.9%, for the upper-middle 20%, 10%; and for the wealthiest quintile, 20.7%.

    source

    Still, your point stands, taxes can be an instrument for (more) equality. The article I referred to (see another reply of mine for the full article) also gives an example of how taxes can be fairer, and also gives an example of a time in Italy when they were.

  • I can't tell if it's "the true cause" of the massive tech layoffs because I know jackshit of US tax, but it does make more sense than every company realising at the same time that they over-hired or becoming instant believers of AI-driven productivity.

    The only part that doesn't make sense to me is why hide this from employees. Countless all-hamds with uncomfortable CTOs spitting badly rehearsed bs about why 20% of their team was suddenly let go or why project Y, top of last year's strategic priorities, was unceremoniously cancelled. Instead of "R&D is no longer deductible so it costs us much more now".

    I would not necessarily be happier about being laid off but this would at least be an explanation I feel I'd truly be able to accept

    This accounts for some portion of it, but the other part is the rise in interest rates. With borrowing money no longer being nearly free, companies tightened their budgets.

  • So Trump set a time bomb for who he thought would be 46 and then lost his re-election. Now he has to fix the mess he created - and if he does he will be hailed as a corporate hero for fixing the tax problem he created.

    If he doesn't fix it he will continue to plunge the future of America into chaos.

    Fucking futureless clown people.

    He has fixed more problems he created than any previous president. MATSA (make america the same again)

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    A whole article about how terrible this is, then towards the end they got clarification from Google and, surprise surprise, it was all an overreaction and they were fear mongering. “This update is good for users: they can now use Gemini to complete daily tasks on their mobile devices like send messages, initiate phone calls, and set timers while Gemini Apps Activity is turned off. With Gemini Apps Activity turned off, their Gemini chats are not being reviewed or used to improve our AI models. It’s just giving Gemini more local assistant abilities.
  • I made a porn scroller without the clutter

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  • The Prime Reasons to Avoid Amazon

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    Yeah, not a choice any of us who work in tech can make. But the small choices we CAN make do add up significantly.
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    What is the technology angle here? What does this have to do with technology?
  • You are Already On "The List"

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    Even if they're wrong. It's too late. You're already on the list. .... The only option is to destroy the list and those who will use it
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    It's one of those things where periodically someone gets sanctioned and a few others get scared and stop doing it (or tone it down) for a while. I guess SHEIN are either overdoing it or they crossed the popularity threshold where companies become more scrutinized
  • Catbox.moe got screwed 😿

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    I'll gladly give you a reason. I'm actually happy to articulate my stance on this, considering how much I tend to care about digital rights. Services that host files should not be held responsible for what users upload, unless: The service explicitly caters to illegal content by definition or practice (i.e. the if the website is literally titled uploadyourcsamhere[.]com then it's safe to assume they deliberately want to host illegal content) The service has a very easy mechanism to remove illegal content, either when asked, or through simple monitoring systems, but chooses not to do so (catbox does this, and quite quickly too) Because holding services responsible creates a whole host of negative effects. Here's some examples: Someone starts a CDN and some users upload CSAM. The creator of the CDN goes to jail now. Nobody ever wants to create a CDN because of the legal risk, and thus the only providers of CDNs become shady, expensive, anonymously-run services with no compliance mechanisms. You run a site that hosts images, and someone decides they want to harm you. They upload CSAM, then report the site to law enforcement. You go to jail. Anybody in the future who wants to run an image sharing site must now self-censor to try and not upset any human being that could be willing to harm them via their site. A social media site is hosting the posts and content of users. In order to be compliant and not go to jail, they must engage in extremely strict filtering, otherwise even one mistake could land them in jail. All users of the site are prohibited from posting any NSFW or even suggestive content, (including newsworthy media, such as an image of bodies in a warzone) and any violation leads to an instant ban, because any of those things could lead to a chance of actually illegal content being attached. This isn't just my opinion either. Digital rights organizations such as the Electronic Frontier Foundation have talked at length about similar policies before. To quote them: "When social media platforms adopt heavy-handed moderation policies, the unintended consequences can be hard to predict. For example, Twitter’s policies on sexual material have resulted in posts on sexual health and condoms being taken down. YouTube’s bans on violent content have resulted in journalism on the Syrian war being pulled from the site. It can be tempting to attempt to “fix” certain attitudes and behaviors online by placing increased restrictions on users’ speech, but in practice, web platforms have had more success at silencing innocent people than at making online communities healthier." Now, to address the rest of your comment, since I don't just want to focus on the beginning: I think you have to actively moderate what is uploaded Catbox does, and as previously mentioned, often at a much higher rate than other services, and at a comparable rate to many services that have millions, if not billions of dollars in annual profits that could otherwise be spent on further moderation. there has to be swifter and stricter punishment for those that do upload things that are against TOS and/or illegal. The problem isn't necessarily the speed at which people can be reported and punished, but rather that the internet is fundamentally harder to track people on than real life. It's easy for cops to sit around at a spot they know someone will be physically distributing illegal content at in real life, but digitally, even if you can see the feed of all the information passing through the service, a VPN or Tor connection will anonymize your IP address in a manner that most police departments won't be able to track, and most three-letter agencies will simply have a relatively low success rate with. There's no good solution to this problem of identifying perpetrators, which is why platforms often focus on moderation over legal enforcement actions against users so frequently. It accomplishes the goal of preventing and removing the content without having to, for example, require every single user of the internet to scan an ID (and also magically prevent people from just stealing other people's access tokens and impersonating their ID) I do agree, however, that we should probably provide larger amounts of funding, training, and resources, to divisions who's sole goal is to go after online distribution of various illegal content, primarily that which harms children, because it's certainly still an issue of there being too many reports to go through, even if many of them will still lead to dead ends. I hope that explains why making file hosting services liable for user uploaded content probably isn't the best strategy. I hate to see people with good intentions support ideas that sound good in practice, but in the end just cause more untold harms, and I hope you can understand why I believe this to be the case.