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Why is raising taxes on the QSBS not what “tax the rich” means? It’s literally a 100% tax-free benefit to the owners of businesses, up to $10 million per year.

Why is raising taxes on the QSBS not what “tax the rich” means? It’s literally a 100% tax-free benefit to the owners of businesses, up to $10 million per year. I support and like the QSBS, but it is exactly the sort of thing the average voter would say is a “tax loophole for the rich”.

romanhn 5y ago
Whom do you lump under "owners of businesses"? Because early employees are impacted as well, seeing how they own company stock. And there are a lot more of those, than just the founders.
- seibelj 5y ago
  Why does anyone deserve to pay 0% tax on gains, even for early stage companies? Why not the guy who works in the sewer or digs ditches for a living? It reeks of plutocracy. And again, I support the QSBS. I'm trying to put things into perspective for the HN crowd that somehow sees 6 to 8 figure payouts as something that deserves 0% tax, yet also votes for liberal politicians. These things do not square, at least for the average non-techie voter.
  - romanhn 5y ago
    It has nothing to do with "deserving" it. Tax breaks exist, generally, to create specific incentives. In this case, the incentive is to promote small businesses by parking cash with them at an early stage, despite the added risk. Removing this break will disincentize early investment and/or make it harder for businesses to stay capitalized in their formative years.
    - seibelj 5y ago
      Totally in agreement. But I’m a libertarian. The larger point I was making was that people vote for liberal politicians and act surprised when they get what was promised. Don’t pretend you are a special snowflake and deserve 0% taxes while the working person does not.
- refurb 5y ago
  This is exactly what people call out - "Yes we should raise taxes on the other guy, not me!".
hamandcheese 5y ago
The average voter likely doesn’t know or doesn’t care about the difference between high income and high wealth. I think “tax the rich” the way most people think of it would have to be some form of wealth tax.
- seibelj 5y ago
  I think if you presented the facts - that even early employees of tech companies, who already earn some of the highest salaries in the world, can make up to $10 million per year tax free - the average voter would say that's criminally unfair. Sure sure, you can explain that the latest SaaS bullshit is just an absolutely crucial achievement in human history that needs this, but I think it won't be convincing.
  - hamandcheese 5y ago
    The key “argument” in my mind is this: why are we trying so hard to tax those who might become wealthy but seemingly make no effort to tax those who already are wealthy? I agree, that probably isn’t compelling to many, but I suspect it is a view found commonly here on HN.

romanhn 5y ago

Whom do you lump under "owners of businesses"? Because early employees are impacted as well, seeing how they own company stock. And there are a lot more of those, than just the founders.

seibelj 5y ago
Why does anyone deserve to pay 0% tax on gains, even for early stage companies? Why not the guy who works in the sewer or digs ditches for a living? It reeks of plutocracy. And again, I support the QSBS. I'm trying to put things into perspective for the HN crowd that somehow sees 6 to 8 figure payouts as something that deserves 0% tax, yet also votes for liberal politicians. These things do not square, at least for the average non-techie voter.
- romanhn 5y ago
  It has nothing to do with "deserving" it. Tax breaks exist, generally, to create specific incentives. In this case, the incentive is to promote small businesses by parking cash with them at an early stage, despite the added risk. Removing this break will disincentize early investment and/or make it harder for businesses to stay capitalized in their formative years.
  - seibelj 5y ago
    Totally in agreement. But I’m a libertarian. The larger point I was making was that people vote for liberal politicians and act surprised when they get what was promised. Don’t pretend you are a special snowflake and deserve 0% taxes while the working person does not.
refurb 5y ago
This is exactly what people call out - "Yes we should raise taxes on the other guy, not me!".

hamandcheese 5y ago

The average voter likely doesn’t know or doesn’t care about the difference between high income and high wealth. I think “tax the rich” the way most people think of it would have to be some form of wealth tax.

seibelj 5y ago
I think if you presented the facts - that even early employees of tech companies, who already earn some of the highest salaries in the world, can make up to $10 million per year tax free - the average voter would say that's criminally unfair. Sure sure, you can explain that the latest SaaS bullshit is just an absolutely crucial achievement in human history that needs this, but I think it won't be convincing.
- hamandcheese 5y ago
  The key “argument” in my mind is this: why are we trying so hard to tax those who might become wealthy but seemingly make no effort to tax those who already are wealthy? I agree, that probably isn’t compelling to many, but I suspect it is a view found commonly here on HN.