The problem is taxing illiquid gains. If they are liquid, vesting time is the logical time to tax them. Conversely, taxing at exercise time doesn't really make

The problem is taxing illiquid gains. If they are liquid, vesting time is the logical time to tax them. Conversely, taxing at exercise time doesn't really make sense for illiquid gains and more than vesting time does. People have problems with this now. The real challenge would be to fix this without creating an incentive to keep gains illiquid when they could be liquid.