mjwhansen

Maybe you've seen this issue come up on HN over the last year [1], but to recap: as of 2022, software development expenses are no longer expenseable in the US. Developer salaries, servers, anything used to make a product -- or even improve an existing, already commercialized product -- have to be spread out over at least 5 years. This means that companies -- even ones that lost money -- now have massive phantom profits that are hundreds of percents higher than previous years and many are struggling to pay their tax bills.

This is a factor in all of the layoffs going on at big companies, and it's already causing bankruptcies for small companies.

Startups are being forced to raise sooner than planned in this awful environment for lower valuations.

People who've gotten government R&D grants are screwed, as those grants can't be used to cover taxes, so they're personally liable for hundreds of thousands in taxes even though they had zero revenue.

Perhaps you saw my thread of stories from founders about this over the weekend.[2]

This applies beyond software, too: any kind of tech, any kind of R&D. Even if it's not what you think of as R&D (like adding new features -- it's considered R&D under this), and even if the company gets the R&D credit (which only covers a tiny portion of this).

Oh - and Congress never intended for this to take effect. They knew it was bad, yet still we have to twist their arm to fix it.

Well, there was reason for hope the last few weeks. Congress struck a deal to fix the R&D expensing mess, and a few other business tax issues, plus expanding the Child Tax Credit, relief for disaster victims, and other good stuff. I've been working on this issue since early last year, and this tax deal is our best shot of getting this fixed.

The bill is heading for the House floor early next week.

But unfortunately there is a small group in Congress that is trying to torpedo the Tax Deal.

And torpedoing the tax deal would be devastating for tech. For founders, for employees, for the economy.

I don't know how many of you remember the SOPA/PIPA issue of 2012, two bills that would have killed user-generated content. Wikipedia had a blackout. Tons of other sites, too. People who'd never called Congress before called and made the phones ring off the hook.

And you know what? It worked. SOPA/PIPA died, because tech banded together.

Tech is in serious danger again, so we need to work together again, and we need to do it NOW. Like — right now.

The highest ROI thing you can do for your company, for your job security, is to call your Congressional Representative and ask them to support HR 7024.

This is all you have to say when the nice staff member picks up the phone:

"Hi, my name is [first/last], and I am live in your district. Please ask the Representative to support HR 7024. Thank you."

They might ask you to confirm your name and phone number, and that's it. It should take you less than 2 minutes.

You can add some more if you want ("I'm a tech worker/startup founder/small business owner/etc"), or not.

You can find their phone number on the Small Software Business Alliance website (https://ssballiance.org/), or by using the Congressional directory (https://www.house.gov/representatives/find-your-representative). Doesn't matter.

Just call them now. And report back here on what they say. Please post a comment so more people see this thread. If there was a wait (which means our effort is working if their phone line is tied up).

[1] https://hn.algolia.com/?q=section+174 [2] https://twitter.com/mjwhansen/status/1748345492998696961