5 ms·

In general people in Denmark don't have a ton of money to invest after paying taxes. If they do invest in Danish companies, those companies are held back somewh

• pavlov 10y ago
  Employees could also be required to pay taxes on employee stocks - money that they had not earned yet because they had not sold them. That is a major problem in the US system as well.
  • BinaryIdiot 10y ago
    It is? I'm pretty ignorant with stocks so please excuse the stupid questions but I thought you weren't taxed until after selling them. Is that not the case? How does it work?
    • deleted 10y ago
      [deleted]
    • bwood 10y ago
      You also get taxed when exercising options even if you don't immediately sell the shares you just bought. Something like the difference between the strike price and the current value being treated as income you earn upon exercising the options, so it's taxable.
    • pavlov 10y ago
      The taxation structures around stock options in the United States appear extremely complex. Google for something like "taxation of stock options in private company"... I'm certainly not an expert, so don't listen to me for any financial or legal advice.
      • dajohnson89 10y ago
        You never dispensed any advice, so your disclaimer is unnecessary.
        • pavlov 10y ago
          True! It was a preemptive measure, in case I go crazy and start giving advice anyway ;)
    • aardvark291 10y ago
      When you receive something of value from your employer, it generally counts as taxable income. This includes grants of stock or other perks such as a housing allowance or a car. Like most Bay Area tech workers, I'm compensated partially in stock. Every month, X shares of my restricted stock "vest", which means, in practical terms, that I receive those shares. That counts as taxable income at the current market value of those shares. To avoid making me pay a large tax bill come April, my employer actually withholds some of those shares of stock to cover the tax bill. (I've never been entirely sure how this stock-withholding works from a tax perspective. Do they immediately sell those shares and pay the proceeds to the government along with the rest of my income tax withholding?)
      • bduerst 10y ago
        > To avoid making me pay a large tax bill come April, my employer actually withholds some of those shares of stock to cover the tax bill. I think that your employer actually sells just enough of those shares at the time of vesting to cover the taxes. Any cash remaining difference is given to you in your next paycheck (i.e. 2 shares at $100 ea. are sold to cover $120 of taxes, and $80 is given to you). Could be wrong though.
    • ianferrel 10y ago
      If you exercise stock options, you get taxed on the difference between the strike price and the market value at the time you exercise, as normal income (not capital gains). This can be a big problem if you exercise stock options, then the price of the stock drops. You might not be able to sell the stock for enough to pay the taxes you owe, and although you can take a capital loss, you can't use capital losses to offset normal income (beyond a fairly small limit each year).
      • TheCoelacanth 10y ago
        The same is true if you are given actual stock. You owe taxes when it vests (or hypothetically when you are given it if it is unrestricted stock) not when you sell it.
        • morgante 10y ago
          This can be avoided with an 83b election.
        • SeoxyS 10y ago
          You can file an 83b election with the IRS to avoid this problem, thankfully.
          • TheCoelacanth 10y ago
            That just moves the point where you have to lay out money to even earlier. That's great if it's an early stage startup where the shares are worth practically nothing, but it's even worse if they are already worth a lot.
            • SeoxyS 10y ago
              Oh sure; but you won't have to lay down any money until you sell your stock; and paying taxes on real money is a lot easier than paying taxes on imaginary money.
      • jacobwcarlson 10y ago
• SilasX 10y ago
  True, but doesn't Denmark have big tax exemptions for investments you make through retirement accounts (which are limited in withdrawals until you're older)? Of course, that probably wouldn't apply to non-public investments, and the caps are two low to be usable by Dane angels (far from home in the Bay especially).
• arximboldi 10y ago
  In general people in Denmark don't have a ton of money to invest after paying taxes. In general people in the US don't have a ton of money to invest after paying healthcare, education, suburban commute, mortage, etc.