prior to this rule change, what you pay your programmers is just a deductible expense, so you owe taxes (in this very simplified example with no other expenses etc. etc.) on just $50k.

after the rule change, you can deduct only $50k of the labor cost (in this year), so now you owe tax on $250k.

there is a very good chance you do not have the cash available to make this payment.

of course, after 5 years, things all balance out and are effectively "back to normal". but you have to get through those 5 years first.