4 ms·

It's already horseshit that the income is taxed on exercise. Just treat capital gains as normal income and tax it when the gains are realized as cash. I hope t

It's already horseshit that the income is taxed on exercise. Just treat capital gains as normal income and tax it when the gains are realized as cash. I hope this doesn't apply to options without liquidity. Otherwise we should just go ahead and tax scratchers on their potential prize value at purchase. If this goes through I guess I can't work for a startup anymore. I'm already paying too much in taxes and rent to build wealth, might as well give up on innovating for a small company and work someplace that can pay me and give me options on stocks that I can sell. What a dumb idea Bernie, and I want to vote for you.

cjbprime 7y ago
If it goes through, startups will need to change their employee incentives to compensate, and companies who don't will find that they're now way below market rate. For example: https://danluu.com/startup-options/ https://danluu.com/startup-options/
- pmiller2 7y ago
  Startups are already way below market rate if the market includes public companies, and you only count liquid stock compensation. The only startups that even come close are ones that are about to IPO.
riazrizvi 7y ago
Yes. So is that really the point here, to make it increasingly harder for people to not work in large companies? Perhaps this is another example of progressive legislation that gets hijacked by incumbent big business by some clause agreed to during negotiation where people don’t know what they are agreeing to. I imagine this draft law was negotiated between concerned parties. I read a fascinating book called The Power Broker by Robert Caro, that showed how lawyers conduct a type of ambush warfare with new laws. What they are really gunning for is not apparent until the law goes into effect, it’s too subtle for people to see from the text.
dallbee 7y ago
I'm on board with your first suggestion - it all gets a lot simpler (and fairer) if you just tax the realized gains. For the rest though, it may be worth pointing out that the first $100,000 in qualified stock options _per year_ are not taxed. If you're in a situation where the taxes on $(your annual options) - $100,000 are significant in comparison to your rent, I'd wager you're doing pretty well.

cjbprime 7y ago

If it goes through, startups will need to change their employee incentives to compensate, and companies who don't will find that they're now way below market rate. For example: https://danluu.com/startup-options/ https://danluu.com/startup-options/

pmiller2 7y ago
Startups are already way below market rate if the market includes public companies, and you only count liquid stock compensation. The only startups that even come close are ones that are about to IPO.

riazrizvi 7y ago

Yes. So is that really the point here, to make it increasingly harder for people to not work in large companies? Perhaps this is another example of progressive legislation that gets hijacked by incumbent big business by some clause agreed to during negotiation where people don’t know what they are agreeing to. I imagine this draft law was negotiated between concerned parties. I read a fascinating book called The Power Broker by Robert Caro, that showed how lawyers conduct a type of ambush warfare with new laws. What they are really gunning for is not apparent until the law goes into effect, it’s too subtle for people to see from the text.

dallbee 7y ago

I'm on board with your first suggestion - it all gets a lot simpler (and fairer) if you just tax the realized gains. For the rest though, it may be worth pointing out that the first $100,000 in qualified stock options _per year_ are not taxed. If you're in a situation where the taxes on $(your annual options) - $100,000 are significant in comparison to your rent, I'd wager you're doing pretty well.