OBBB signed: Reinstates immediate expensing for U.S.-based R&D

Sure, foreign R&D still gets amortized over 15 years (NPV ≈59 % of a full write-off, so you “lose” ~8.6 % of your R&D spend in present-value terms, and only 6.7 % of the cost is deductible in year 1, creating a 19.6 % cash-tax gap). But offshore wages are often 50–70 % below U.S. rates:

• Even after the slower amortization drag, hiring at half the cost nets you ~30 % total savings on R&D headcount.

• On a pure cash basis you only need ~20 % lower wages to break even; most offshore markets easily exceed that.

• So the labor-cost arbitrage far outweighs the tax timing penalty unless your foreign salaries are less than ~20 % below U.S. levels.

In short: the 15-year amort rule hurts your tax deduction, but 50 %+ lower offshore wages more than make up for it.

On paper, offshoring has made sense the entire time, and yet here we are in 2025 and companies still hire American devs. Not only that, they often fly in foreign devs just to pay them more here than if they had just offshored to their home country.

There are many reasons: It’s difficult to understand _intention_ when deprived of non-verbal communication and working in a choppy network call. Even if one can gloss over communication needs etc. there’s burnout looming around the corner and natural, healthy laziness getting into the way. Sometimes even internal politics might be blocking knowledge/access/contribution for more or less peculiar reasons.

It’s not like it’s impossible to hire remote engineer, yet my (completely unmetered) estimates out of experience is that approx. 10% of engineers willing to work remotely can sustain health (physical and mental) and be efficient outside of 1-2 years of honeymoon period.

There was some tumbling around COVID but IMO both stationary jobs and remote ones are doing well on mid-high quality positions.