Because what am I hearing from my friends personally here in Manufacturing country?
The hidden time bomb in the tax code that's fueling mass tech layoffs
A decades-old tax rule helped build America's tech economy. A quiet change under Trump helped dismantle it
buried deep in the 2017 tax law — has contributed to the loss of hundreds of thousands of high-paying, white-collar jobs.
Now, as a
bipartisan effort to repeal the Section 174 change moves through Congress, bigger questions are surfacing: How did a single line in the tax code help trigger a tsunami of mass layoffs? And why did no one see it coming?
For almost 70 years, American companies could deduct 100% of qualified research and development spending in the year they incurred the costs. Salaries, software, contractor payments — if it contributed to creating or improving a product, it came off the top of a firm’s taxable income.
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that wouldn’t kick in right away, wouldn’t provoke immediate backlash from businesses, and could, in theory, be quietly repealed later.
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.
To understand the impact, imagine a personal tax code change that allowed you to deduct 100% of your biggest source of expenses, and that becoming a 20% deduction. For cash-strapped companies, especially those not yet profitable, the result was a painful tax bill just as venture funding dried up and interest rates soared.
A decades-old tax rule helped build America's tech economy. A quiet change under Trump helped dismantle it
qz.com
Then this
Bay Area tech workers endure grim 2025 as big companies reveal layoffs
Google, Walmart, Microsoft trim more positions as Bay Area keeps losing tech jobs
Latest Microsoft layoffs target engineering, product and legal roles, records show
How come the corporate media isn't reporting this?