In short, section 174[0].

It pushed almost all SWE jobs to be classified as R&D jobs, which changed how taxes are calculated on companies.

They have an example at [0], but I'll copy it here. For a $1mm income, $1mm cost of SW dev, with $0 profit previously you paid $0 in tax (your income was offset by your R&D costs). Now it would be about $200k in taxes for 5 years, as you can't claim all of the $1mm that year anymore.

[0]: https://blog.pragmaticengineer.com/section-174/

There's tons of taxes on hiring employees that you have to pay even if you're losing money. Payroll taxes, mandatory insurance taxes, unemployment taxes, probably more I just don't remember off the top of my head.

Taxpayers can't immediately deduct R&D costs now https://www.law.cornell.edu/uscode/text/26/174

In an effort to lower the deficit effects of the Trump tax cuts (i.e. increase revenue so they could cut further in other areas), they reclassified software developers salary so that their salaries have to be amortized over multiple years, instead of just a business expense in that year. This is usually done for assets as those things have an intrinsic value that could be sold.

In this case, business have to pay taxes on "profit" that they don't have as it immediately went to salaries. There were a lot of small business that were hit extremely hard.

They tried to fix it in the recent tax bill but it was killed in the Senate last I checked. You can see more here: https://www.finance.senate.gov/chairmans-news/fact-sheet-on-....

Also, software developers in Oil and Gas industries are exempt from this :)