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> why is there such outrage about taxing option and RSU income? There is no outrage, or even opposition to taxing income from selling options and RSUs. The pr
by ProblemFactory 9y ago
> why is there such outrage about taxing option and RSU income?
There is no outrage, or even opposition to taxing income from selling options and RSUs.
The problem arises because in some situations options and RSUs are considered "income" as themselves, not a potential to make income when they are sold.
You get some options in an early-stage startup, and have to pay tax on that. But you can't actually sell your options - there is no market, and often you aren't even allowed to sell them before the company is acquired or goes public. There is still a good chance that the company will go bust before either of these happens.
So you have to pay a tax bill years before you actually earn income, and potentially without ever earning income from your options.
- kolbe 9y agoLiquidity is not a requirement for a transfer of an asset to be considered income. If your company paid for your apartment, that's income, despite the fact that it may be impossible for you to sublease it. Certainty of future value is not a requirement for something to be considered income. You get paid in dollars all the time, but that's just an asset with fluctuating value. There are several loopholes that get around the definition of income to defer or avoid taxes for certain types of income, but that's exactly what this is: a loophole for the wealthy. And I have no problem with SV employees enjoying tax breaks. I just can't reconcile SV's love of taxing other people, avoiding it for themselves, and still claiming this is a moral, rather than selfish, stance.
- sk5t 9y agoYou fail to recognize that most options / private company shares are not negotiable or redeemable, period. They cannot be converted to income or other benefit by any mechanism.