Re:Tell HN: Help restore the tax deduction for software dev ...
by ndriscoll on Monday June 09, 2025 @08:07PM
(#44231067)
It's not really "weaponizing the tax code because of an ideological aversion"; it's more:
* It makes sense to tax capital assets as such.
* If companies do R&D and think the results are valuable enough to be kept secret, then obviously they're an asset.
* Depreciation is because real-world assets actually require ongoing maintenance or become worthless over time, but information does not.
* Finite-term IP grants (e.g. copyrights/patents) do become worthless over time, so a depreciation schedule makes sense.
* Trade secrets never expire, so it doesn't make sense to depreciate them. If they never get out, they remain an asset forever. So their development shouldn't be deductible. If they do get out, the company could release all of their (now presumably useless) info on it then for the deduction from their development.
A significant percentage of algorithm and foundational computer science R&D in software is now protected exclusively via trade secrets. There are no other practical options. This wasn’t always the case but all other forms of protection have steadily eroded over the last couple decades.
Weaponizing the tax code because you have an ideological aversion to trade secrets doesn’t seem fair to me.