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California To Hit Startup Founders with Big Retroactive Tax Bills

xconomy.com

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Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#241

Post by SoftwareMaven »

run4yourlives wrote: post #88
kjackson2012 wrote: post #71

Earlier quoted context omitted.

You don't know much about Vancouver if you think this is a realistic possibility. Vancouver, BC has barely any tech industry (a few software companies like Business Objects, and EA Sports are up there, but nothing meaningful), and the taxes are high. British Columbia has one of the highest tax rate in Canada. One of my Canadian friends told me that the 50% marginal tax rate started around $65k, although I haven't dou…

I live in Vancouver. Have you ever actually lived in Canada? >Vancouver, BC has barely any tech industry http://en.wikipedia.org/wiki/Economy_of_Vancouver Let's just ignore the fact that MS has a development centre in Vancouver, specifically because its easier to hire game developers here. Halo is being written here. > British Columbia has one of the highest tax rate in Canada. You may want to tell that to BC: http:/…

It's too bad such an informative post had to be accompanied with so much condescension. You easily could have made your point without name calling.

Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#242

Post by Retric »

jacoblyles wrote: post #146
rkowalick wrote: post #105

Earlier quoted context omitted.

This is the exact same argument the supporters of Ohio Senate Bill 5[1] used. One reason people in the public sector are willing to be paid less than their private counterparts is because their benefit plans are genuinely better. Saying they should eliminate one of the better benefits public sector employees get is stupid. [1] http://en.wikipedia.org/wiki/Ohio_Senate_Bill_5_Voter_Refere...

Unsustainable benefits are stupid. Of course, when legislators pass pension hikes, they do so knowing that it pleases powerful unions now and the costs to tax payers are decades down the road. So it is one of the more appealing ways for a legislator to screw their state. They may even be out of office by the time the bill comes due! Defined-benefit pensions are a huge drag on many state budgets, and paying them does…

Blue states are also richer, so you would expect them to spend more on government services and thus pensions. The real issue is pensions are based on the idea that future growth reduces the burden however in a stagnate economy they become a real issue.

Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#243

Post by smsm42 »

dragonwriter wrote: post #159
smsm42 wrote: post #104

Earlier quoted context omitted.

If the government thinks they need to tell you how big a drink you can have, and the citizens agree with it, there's something seriously wrong with both. OTOH, we have plastic bag ban in California and lightbulb ban federally, if I remember correctly, so it's not that easy nowdays to find a place to live where there's not something seriously wrong with it.

You remember incorrectly. There is no statewide plastic bag ban in California (though some California municipalities have restrictions on plastic grocery bags). And there is no federal lightbulb ban (there is a federal rule providing energy efficiency standards for certain categories of lightbulbs which sets increasing standards including ones which many currently-popular incandescent bulbs would fail; the intent of…

>>>> There is no statewide plastic bag ban in California

OK, I agree - I should have said "in many places in California". Using weasel words like "restriction" - as if only "very dangerous assault bags" were prohibited but there was no problem with regular plastic bags - does not change the fact the bags are banned - in SF, in San Jose, in LA county and in some others. In fact, in most places the regulators themselves flat out call it a "ban" in their explanatory materials.

>>>> And there is no federal lightbulb ban (there is a federal rule providing energy efficiency standards for certain categories

Which is effectively a ban on certain - very widely used - categories of lightbulbs. The fact that the it is called more verbosely does not change the fact that it is a ban. The intent also does not change the fact - I'm sure every governmental ban has tons of supposedly good intents behind it, it does not stop being a ban because of it.

Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#244

Post by illuminate »

run4yourlives wrote: post #88
kjackson2012 wrote: post #71

Earlier quoted context omitted.

You don't know much about Vancouver if you think this is a realistic possibility. Vancouver, BC has barely any tech industry (a few software companies like Business Objects, and EA Sports are up there, but nothing meaningful), and the taxes are high. British Columbia has one of the highest tax rate in Canada. One of my Canadian friends told me that the 50% marginal tax rate started around $65k, although I haven't dou…

I live in Vancouver. Have you ever actually lived in Canada? >Vancouver, BC has barely any tech industry http://en.wikipedia.org/wiki/Economy_of_Vancouver Let's just ignore the fact that MS has a development centre in Vancouver, specifically because its easier to hire game developers here. Halo is being written here. > British Columbia has one of the highest tax rate in Canada. You may want to tell that to BC: http:/…

"Halo is being written here"

Some of Microsoft's game studios may be based there, but I believe this is not necessarily true for Halo. 343 Industries is based in Kirkland.

https://en.wikipedia.org/wiki/343_Industries

Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#245

Post by SoftwareMaven »

mudge wrote: post #226
mturmon wrote: post #47

A lot of the comments are characterizing this as a money grab by the state. To me, it sounds more like the unintended consequences of a clever lawsuit and/or a poorly-crafted piece of tax-break legislation. People should be advised that California has a lot of clever lawyers who work to find and exploit holes in legislation.

But to make the cancellation retroactive for 5 years makes it seem to be a money grab to me. Why not just cancel for now and in the future?

For the same reason people can appeal their conviction if the law they were convicted of was found unconstitutional: it's as if the law never existed.

Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#246

Post by brianoverstreet »

anigbrowl wrote: post #209

One-sided and confused article. Whether this is an attempt to mislead readers or a misunderstanding by the writer, I don't know. But this is not a case of California choosing to implement an unhelpful policy. This is a case of California's previous helpful policy being found illegal because it violates the commerce clause; the FTB had no other choice but to impose the tax. http://www.mondaq.com/unitedstates/x/214234/…

Hi - as the author of the article, I don't think I was misleading, nor do I think I misunderstand the issues. The FTB has a number of options and tools at its disposal to craft an alternative to this "nuclear option". They could have changed the rule going-forward and allowed post 2008 QSB exclusions under revised terms. Yes, that may have cost them some $$$, but probably not as much as you think, and certainly not as much as they will now collect. Maybe this was the easiest remedy for them in the short term, but the remedy they've inacted will have significant long term negative implications. -Brian

Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#247

Post by brianoverstreet »

dragonwriter wrote: post #231
anigbrowl wrote: post #209

One-sided and confused article. Whether this is an attempt to mislead readers or a misunderstanding by the writer, I don't know. But this is not a case of California choosing to implement an unhelpful policy. This is a case of California's previous helpful policy being found illegal because it violates the commerce clause; the FTB had no other choice but to impose the tax. http://www.mondaq.com/unitedstates/x/214234/…

The FTB doesn't have a choice. The court invalidated the statute which provided the benefits. The legislature could pass a new statute which provided similar benefits without the features which made the old statute unconstitutional, but the FTB is an executive-branch agency and can't make up its own laws to replace ones that are struck down by the courts.

The court did not invalidate the statute, it invalidated one of the many qualifiers for a company to be deemed a QSB.

Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#248

Post by mindcrime »

rgbrenner wrote: post #187
mindcrime wrote: post #141

Earlier quoted context omitted.

The USA has plenty of institutionalized corruption (see: Washington D.C.) and organized crime too, so how much worse can Mexico be?

"so how much worse can Mexico be?" That's sarcasm right? Mexico: 3rd highest number of murders in the world (only India and Brazil are worse). Nearly 5x the murder rate in the US - nearly 2x the total number of murders. http://en.wikipedia.org/wiki/List_of_countries_by_intentiona...

I was referring, specifically, to the issues of corruption and organized crime. But even considering the general murder rate, I'm going to go out on a limb and guess that your likelihood of being murdered in Mexico vary tremendously depending on where in Mexico you are. Maybe I'm wrong, but I'm guessing there are some areas that are pretty safe and some areas that you'd have to be brain-dead stupid to walk into.

Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#249

Post by vacri »

refurb wrote: post #147
c1u wrote: post #118

Earlier quoted context omitted.

"50% marginal tax rate started around $65k" I think your friend has very poor math skills. http://www.ey.com/CA/en/Services/Tax/Tax-Calculators-2012-Pe... $65K gross income in BC nets nearly $52K; a ~20% average tax rate. This is before any eligible deductions. Even if your friend was making $1,000,000 gross salary, they'd still pay less than 42% tax on average, and that's ignoring several legal tax shelters availabl…

Note, he said "marginal" not "overall" tax rate. Don't forget that BC has 12% sales tax and monthly premiums for health insurance. Income tax is only one of the many taxes.

Sales tax is not a 'marginal' tax, and is certainly not unique to BC.

Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#250

Post by 18pfsmt »

brianoverstreet wrote: post #246
anigbrowl wrote: post #209

One-sided and confused article. Whether this is an attempt to mislead readers or a misunderstanding by the writer, I don't know. But this is not a case of California choosing to implement an unhelpful policy. This is a case of California's previous helpful policy being found illegal because it violates the commerce clause; the FTB had no other choice but to impose the tax. http://www.mondaq.com/unitedstates/x/214234/…

Hi - as the author of the article, I don't think I was misleading, nor do I think I misunderstand the issues. The FTB has a number of options and tools at its disposal to craft an alternative to this "nuclear option". They could have changed the rule going-forward and allowed post 2008 QSB exclusions under revised terms. Yes, that may have cost them some $$$, but probably not as much as you think, and certainly not a…

While you seem to imply that the FTB could simply change the rules, everyone else on this thread seems to think the FTB is not able to alter the rules at all (as that would require the legislative authority they do not have). Are you sure the FTB has the power you ascribe?
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