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Proposed Tax Reform Stands to Impact Equity and Performance-Based Compensation

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Re: Proposed Tax Reform Stands to Impact Equity and Performance-Based Compensation

#51

Post by dang »

cattleprodigy wrote: post #10
throwgoog452 wrote: post #5

The tax bill is generally geared to screw over tech. In particular, eliminating the state income tax exemption will severely impact anyone in California. Are you still happy with #resisting anything the administration tries to do? Still happy you're censoring conservatives? Still happy Damore was fired? Still happy with your endless virtue-signaling? Still feeling good about enforcing political correctness? Still wan…

Yes, Yes, Yes, Yes, Yes, Yes, Yes

Could you please not post unsubstantive comments here, especially on divisive topics?

Re: Proposed Tax Reform Stands to Impact Equity and Performance-Based Compensation

#52

Post by delinka »

rosser wrote: post #45
delinka wrote: post #40

Earlier quoted context omitted.

New laws shouldn't, in general, be retroactive. The fact that a grandfather clause is necessary to specify that a law isn't intended to be retroactive is bothersome.

A grandfather clause like this doesn't make a law "retroactive". It exempts people who would be subject to the law because of things that happened before its passage from its effects, when the specific behavior in question (say, e.g. , filing your taxes after the law's passage, on income earned before that passage) is newly affected. It prevents "punishing" people for behavior that wasn't contrary to the law, when th…

I think you've misunderstood me. I've reworded to help. I did not intend to imply that I thought such a clause made the law retroactive. I'm saying that by default, laws should not be retroactive and that needing a clause to specifically prevent retroactivity is annoying as it specifies what should already be the default.

Re: Proposed Tax Reform Stands to Impact Equity and Performance-Based Compensation

#53

Post by toast0 »

ryandrake wrote: post #30
colek42 wrote: post #27

Earlier quoted context omitted.

The standard deduction doubling will mean that most people will be able to use a simple form rather than itemizing.

Regardless of what the standard deduction is, don't you still have to first itemize in order to figure out whether you should itemize?

If your income is less than the standard deduction, you don't need to itemize. If you're living off of stock dividends, or other capital gains, the threshold is when income minus standard deduction hits the top of the bracket for 0% on cap gains.

If you have a general idea of what's itemizable, and an approximate amount for those, and it's much less than the standard deduction, you don't need to find all the receipts and do the work.

Re: Proposed Tax Reform Stands to Impact Equity and Performance-Based Compensation

#54

Post by sokoloff »

weaksauce wrote: post #36
clairity wrote: post #31

Earlier quoted context omitted.

there is a section in the document called "Grandfathering of Compensation Earned Prior to 2018" =)

These grandfather clauses irk me... if the policy is not good enough to stand on its own then it should not be policy.

Should taxpayers be forced to amend prior years' returns based on a new tax policy? (I believe no.)

If this policy were passed and applied to retroactively vested (but not yet received due to a time, performance, or other double trigger), that's what would seem to need to happen.

Other people have made plans for retirement or other meaningful milestones based on the current tax law. There is value in having stability and being able to plan around tax and other long-term financial realities.

Further, due to performance-dependent multipliers, it's often not even possible to know what the amount should be (which I admit applies to both grandfathered and not grandfathered comp).

Re: Proposed Tax Reform Stands to Impact Equity and Performance-Based Compensation

#55

Post by ceejayoz »

gergles wrote: post #46
microtherion wrote: post #17

Earlier quoted context omitted.

Surely, the fact that $31M of the $38M of tax he paid in 2005 was AMT had nothing whatsoever to do with it... https://www.marketwatch.com/story/read-this-to-see-if-you-ow...

He would pay more with the AMT being repealed, as the higher marginal tax rate would apply rather than the AMT rate. This trend of going "whaa, but Trump!!!!!!" every time anything happens in government makes for lazy debating.

Per https://en.wikipedia.org/wiki/Alternative_minimum_tax, "Each year a taxpayer must calculate and then pay the greater of an alternative minimum tax (AMT) or regular tax."

If Trump paid AMT, his regular taxes were lower, which means he stands to gain. Is there something I'm missing here?

Re: Proposed Tax Reform Stands to Impact Equity and Performance-Based Compensation

#56

Post by [deleted] »

mikeash wrote: post #22
wavefunction wrote: post #16

Earlier quoted context omitted.

I would think tax attorneys would appreciate more billable hours. The 'postcard sized tax form' touted by the GOP left me wondering what the makers of TurboTax and other tax preparation software think about that specific proposal.

TurboTax et al absolutely hate it, of course, and work hard lobbying Congress to ensure it doesn't happen. https://www.propublica.org/article/filing-taxes-could-be-fre...

[deleted]

Re: Proposed Tax Reform Stands to Impact Equity and Performance-Based Compensation

#57

Post by sokoloff »

alistairSH wrote: post #50
apendleton wrote: post #38

Earlier quoted context omitted.

Without speaking to this particular grandfather clause, I think in general these kinds of clauses deal with the fact that a new policy, good or bad, might cause people to design their incentive structures differently, and they want to avoid screwing over people who in good faith designed their structures to work best under the old system, and instead give them time to make adjustments.

What irks me is that tax policy is such that complicated incentive programs used to defer compensation and tax obligation are a thing in the first place.

Deferred compensation plans are not solely to manage or modify tax treatment of compensation.

As a long-term shareholder, I want the CEO, board, and senior executive compensation to be tied to long term shareholder value creation. By far the easiest way to do that is to create a deferred compensation plan that ties their financial outcome to that of a long-term shareholder.

If I win big holding their shares, I want them to win big.

If they just match the market, they should get paid something for their time, but not anything exceptional.

Re: Proposed Tax Reform Stands to Impact Equity and Performance-Based Compensation

#58

Post by shmerl »

mikeash wrote: post #22
wavefunction wrote: post #16

Earlier quoted context omitted.

I would think tax attorneys would appreciate more billable hours. The 'postcard sized tax form' touted by the GOP left me wondering what the makers of TurboTax and other tax preparation software think about that specific proposal.

TurboTax et al absolutely hate it, of course, and work hard lobbying Congress to ensure it doesn't happen. https://www.propublica.org/article/filing-taxes-could-be-fre...

Quite disgusting to lobby for keeping the process complicated, to justify the middleman.

I'm not using Intuit. TaxAct doesn't seem to do such stunts.

Re: Proposed Tax Reform Stands to Impact Equity and Performance-Based Compensation

#59

Post by CalChris »

briandear wrote: post #47
CalChris wrote: post #35

Earlier quoted context omitted.

> These are relatively modest tax cut bills arriving at a time where the economy is growing and deficits are shrinking, which is exactly where you'd want them. So you want to cut taxes and increase deficits during growth times? This is, of course, not just different but exactly the opposite of Keynesianism. What is it that you plan to do during recessions? Cut spending and increase taxes to close your deficit? This i…

Keynesian economics is insanity. Disproven by Milton Friedman and others.

Milton Friedman was a monetarist which is a belief in controlling the supply of money. That's a different instrument but actually quite similar to Keynes: they are both feedback control mechanisms. That said, monetarism is most definitely NOT cut taxes and increase spending in good times. Keynes and Friedman would both call that insanity.

Re: Proposed Tax Reform Stands to Impact Equity and Performance-Based Compensation

#60

Post by Tyrek »

delinka wrote: post #40
weaksauce wrote: post #36

Earlier quoted context omitted.

These grandfather clauses irk me... if the policy is not good enough to stand on its own then it should not be policy.

New laws shouldn't, in general, be retroactive. The fact that a grandfather clause is necessary to specify that a law isn't intended to be retroactive is bothersome.

You need to have clauses to specify retroactivity, otherwise you get into a world where the government has to wait for everyone alive to die before they're allowed to implement a new taxation plan. There have to be limits somewhere, and that's exactly what these clauses need to implement.
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