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Did Bill Gates really think about how much of his future wealth would be taxed when he started Microsoft? Or how about Steve Jobs when he started Apple? My gu

by melmel 18y ago

Did Bill Gates really think about how much of his future wealth would be taxed when he started Microsoft? Or how about Steve Jobs when he started Apple? My guess is ego and the desire to succeed were more important.

chops 18y ago
You're probably right, but what about Joe Everybody Handyman who decides that the possible payout isn't worth the risk of starting a business. Sure he could do it, if he really wanted to try, but the prospect of starting a business is already a pretty daunting one without removing more of the incentive. Why take on the added risk to get paid about the same salary as you could when you're just an employee? For some people, though, the financials aren't even considered. Some people just want their freedom and they want to create, and taxes aren't going to dissuade them. Others, like VCs, do get into this game with the express goal of making a pile of money. If the payout is less, the risk they're going to be willing to take on is less, and that means less development. With companies that bootstrap, this may not be as big a concern, but many companies simply wouldn't exist without the VCs willing to take on the risk. It's not an ego thing for them, it's all about the Benjamins.
nazgulnarsil 18y ago
steve jobs and bill gates are only one part of the picture. you have to look at the behavior of everyone involved with the early success of a company. Investors, early large customers, even the family urging them on or telling them its pointless.
randallsquared 18y ago
Even if they didn't think about that, I think it's far more likely that they would have if there was a 99% tax on everything over 100K or some similarly draconian tax.
pg 18y ago
In those two cases, probably not. What does influence a lot of founders, though, is what happens to peers who try it. Their friend starts a startup and sells it a few years later. How much better off is he economically? Does he merely get enough not to work for a few years, or does he never have to work again? Tax laws make a visible difference here. In a smaller acquisition, which most are, taxing capital gains at the rate of regular income would very often make the difference between someone having enough not to have to work again versus just enough to take a few years off.

by melmel 18y ago

chops 18y ago

You're probably right, but what about Joe Everybody Handyman who decides that the possible payout isn't worth the risk of starting a business. Sure he could do it, if he really wanted to try, but the prospect of starting a business is already a pretty daunting one without removing more of the incentive. Why take on the added risk to get paid about the same salary as you could when you're just an employee? For some people, though, the financials aren't even considered. Some people just want their freedom and they want to create, and taxes aren't going to dissuade them. Others, like VCs, do get into this game with the express goal of making a pile of money. If the payout is less, the risk they're going to be willing to take on is less, and that means less development. With companies that bootstrap, this may not be as big a concern, but many companies simply wouldn't exist without the VCs willing to take on the risk. It's not an ego thing for them, it's all about the Benjamins.

nazgulnarsil 18y ago

steve jobs and bill gates are only one part of the picture. you have to look at the behavior of everyone involved with the early success of a company. Investors, early large customers, even the family urging them on or telling them its pointless.

randallsquared 18y ago

Even if they didn't think about that, I think it's far more likely that they would have if there was a 99% tax on everything over 100K or some similarly draconian tax.

pg 18y ago

In those two cases, probably not. What does influence a lot of founders, though, is what happens to peers who try it. Their friend starts a startup and sells it a few years later. How much better off is he economically? Does he merely get enough not to work for a few years, or does he never have to work again? Tax laws make a visible difference here. In a smaller acquisition, which most are, taxing capital gains at the rate of regular income would very often make the difference between someone having enough not to have to work again versus just enough to take a few years off.