The good times in Silicon Valley are over – at least with respect to the current generation of coders. The Software industry decreases And, since 2023, the TE Industry Industry has hemorrhaged jobs at amazing speed. Workers who would be safe several years ago are now Out on their asses. While the reasons for this are diverse (AI often discuss as possible culprit And the overall economy has had its benefits over the past several years), one potential driver could also be the tax reductions that Trump passed in 2017.
It turns out that a little known supply of the 2017 Tax and Jobs (TCJA) law law has changed a long gap, called section 174, this allowed the TE industry industry to unload the cost of its research and development operations on the federal government. Prior to the TCJA, Te Companiesnological Companies could take 100 percent of R&D costs, allowing technology companies the freedom to make significant resources to innovation. Bloomberg reports This, as the congress sought to find a way to compensate for the cost of giving large tax reductions to billionaires, one place where they discovered fat to Trim was the industry’s R&D funding.
The 2017 bill has changed the deduction of full editing to funding, which should be analyzed for several years. However, the supply that reacted the funding did not start until 2022, however. Not long after it came into force, the TE industry industry began to spill work as no one’s business.
Actually, 2023 and 2024 have been historically bad years For the TE industry industry, with major companies such as Meta, Amazon and Google Booting Workers from the thousands. Quartz looked deeper into the links between this policy change and the problems of the TE industry and now speculates that There is a positive correlation:
… The late change to Decade Tax Supply Burened Deep in the Tax Act of 2017 contributed to the loss of hundreds of thousands of high payment, white-colored jobs. This is the image that comes from a review of corporate recordings, public financial data, timeline analysis and interviews with industrial initiar. One accountant, working at a house at a TE Companynika company, described it as a “niche thing with a broad impact”, echoing feelings of investors of risky capital also interviewed for this article. Some spoke as long as anonymity to discuss sensitive political issues.
Quartz also notes that the political change would be translated to loss of income for various positions:
The tax benefits of salaries for engineers, product and project managers, data scientists, and even some user experiences and marketing employees- all previously reduced tax revenue in the first year- now had to be spread over five or 15 years of age.
The reality of the Silicon Valley government grant is particularly ironic, considering the rabid anti -government feeling Currently circulating in the industry. People like Marc Andreessen Would you believe This Tech R&D can be funded with private money alone, despite no respectable track of it occurring. Elon Musk’s bulb, meanwhile, Newly attacked The very parts of the government, who were responsible for helping companies as their own (Tesla) flower. There is yet another sign that the billionaires of the United States are so greedy that they are ready to shoot a gift horse in the mouth and call it victory.
However, not everyone in the TE industry industry is an idiot. Currently, there is a concert endeavor to restore the government’s grant. The US innovation and R&D competition lawWhich was introduced by a bipartisan coalition of lawmakers, would restore the full flow of federal dollars for the development needs of technology. Last month, representatives of leading technology companies reportedly signaled To the Trump administration that they may withdraw from previous promises of US investment if the full tax subsidy does not return.
