The change to the treatment of R&D expenses that took place in 2021 is killing american innovation. Under Section 174, all R&D expenses must be capitalized instead of expensed (unheard of in the world). This leads to taxes bills that in many cases, exceed profits. As an owner of a technology focused company, I can attest to the extreme challenge this has created. Many bills were drafted over the last few years to correct but so far, Washington has failed us.
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Yes! Growing is difficult when all the money spent on it is amortized so you have to pay 30%+ of the income (and you don’t have it because you spend it on equipment etc). Especially when huge companies use nonprofits to avoid taxes with their huge team of accountants and lawyers.
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