As a resident of [STATE], I'm writing to express my dismay at some very recent specific tax changes negatively impacting small businesses innovating in technology, as well as express my support for a recently introduced bill to unwind those changes (S.866 - American Innovation and Jobs Act).
As both a software engineer and entrepreneur, changing software development expenses to be exclusively treated as R&D expenses amortized over many years will harm our country's ability to create innovative companies on the frontier of technology, as smaller businesses that take up-front losses in exchange for growth and deferred income will be dramatically penalized and go out of business. Conversely, large companies with established revenue and credit will not be harmed, increasing their ability to reduce competition in the market. So many of America's great companies in the last decades have come from a small number of people working together on software and hardware, losing money up front to gain money in the future. If you cannot write off the up-front expenses as truly spent money with uncertain return, those businesses cannot start.
It's a lose-lose-lose - this change hurts the little guys, helps the incumbent big guys, and will reinforce competitive sclerosis relative to our geopolitical competitors.
I don't know what the exact right answer is, or if S.866 is it - but the current situation is certainly not correct. If we want America to be competitive and create high-paying modern jobs, we can't tax new companies to death before they have a chance to get started.
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As a resident of [STATE], I'm writing to express my dismay at some very recent specific tax changes negatively impacting small businesses innovating in technology, as well as express my support for a recently introduced bill to unwind those changes (S.866 - American Innovation and Jobs Act).
As both a software engineer and entrepreneur, changing software development expenses to be exclusively treated as R&D expenses amortized over many years will harm our country's ability to create innovative companies on the frontier of technology, as smaller businesses that take up-front losses in exchange for growth and deferred income will be dramatically penalized and go out of business. Conversely, large companies with established revenue and credit will not be harmed, increasing their ability to reduce competition in the market. So many of America's great companies in the last decades have come from a small number of people working together on software and hardware, losing money up front to gain money in the future. If you cannot write off the up-front expenses as truly spent money with uncertain return, those businesses cannot start.
It's a lose-lose-lose - this change hurts the little guys, helps the incumbent big guys, and will reinforce competitive sclerosis relative to our geopolitical competitors.
I don't know what the exact right answer is, or if S.866 is it - but the current situation is certainly not correct. If we want America to be competitive and create high-paying modern jobs, we can't tax new companies to death before they have a chance to get started.