[achenatx]

If your payroll ends up being about the same, after 5 years it all evens out in the sense that you will be expensing 100% of your payroll each year (but the expensing will be 20% from each of the prior 5 years).

If your payroll is quickly growing You experience the problem on all payroll growth.

If your payroll is decreasing, you get a tax benefit. Your outgoing cash is less, but you are getting deductions from prior year expenses.

[bequanna]

Your not taking into account the time value of money. You always want to expense sooner.

Additionally, having to wait 4 additional years to deduct that 80% is a huge drain on capital.

Combine this with higher interest rates and the effect is essentially pouring sand into the gears of the tech industry.

[aoeusnth1]

No, it's always strictly worse because you could have bought bonds or deployed the capital in some other way with that money.

[dustbunny]

Sure if you big enough to ride out 5 years but if your a hungry struggling bootstrapped startup, this can be game over.