One of the main purposes of section 174 is to help foster “research or experimental expenditures”. However, the new section 174 rules are actively discouraging and effectively penalizing companies for incurring these costs because of the significant tax increase they may face as a result.
So it’s the employees who are losing their jobs due to the tax, directly. It impacts those who are working for an hourly wage, not the owners. You could argue that the owners have a shoe in the game because they can hire fewer people, which is true, but it’s actually killing software engineering jobs and it’s the penalty to employment that makes it regressive. It’s evenly applied but the effect is uneven. A regressive tax takes a higher proportion of earnings from lower-income households than those with higher incomes… that’s my point.
The top income earners don’t get hit by tax changes killing their positions, so the real threshold is whether someone is getting paid a salary or not. It deeply impacts salaried employees, not owners. Owners just have one fewer employee. That software engineer is out of a job. And it’s happening at scale and having a much larger impact than I think a lot of people realize.
Hope that makes more sense. I’m sorry if I was unclear. It’s been a day my friend… :)