From a more left-wing perspective, it certainly doesn’t feel like a coincidence that Section 174 kneecaps anyone who’d try to compete with the FANG trusts. I’m sure an oligarch paid good money to insert this rubbish into the tax code. Well, relatively good money. American politicians are shockingly cheap to pay off. Probably only took $10k each, to convince them to destroy billions in economic value.
It’s a rare thing these days: a law everyone can hate, regardless of ideology. You don’t have to be a Laffer curve believer to recognize that you can design tax schemes that would destroy competition and/or cause excessive deadweight loss. After all, if all taxes were created equal, we could just replace them with a money printer.
Hopefully it doesn’t take three years to reach a consensus on these moronic tariffs, which are far more destructive to the overall economy.
While I totally agree this is a ridiculous way to tax corporations, to my (probably very limited) understanding, it looks like this might actually be less bad for growing startups, because they don't make much money during their first years.
So a startup that's paying $200k in its first year but only making $40k in that year, they still get to deduct the labour costs over the next 4 years.
But of course this is only true as long as revenue is less than labour costs. Eventually you do want to make money, and it feels like you can only do that when you stop hiring more people.
But regardless of its effects on different types of companies, I don't understand how anyone could pretend that this way of handling labour costs makes any kind of sense.
I'd definitely say it smells like oligarchical fuckery but the more mundane reality is that it was an easy change that would produce enough revenue to balance first term trump tax cuts so they could pass congress. I doubt anyone really thought too much past that and the underlying rationale was probably just "we hate woke social media, this hurt woke social media".