California To Hit Startup Founders with Big Retroactive Tax Bills • Hacker News Board

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

#271

Post by mindcrime » Tue, Jan 15, 2013, 9:40 PM UTC

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...

> That's sarcasm right?

Nope, not in the slightest. And I'm not saying that Mexico isn't worse in those regards, just pointing out that we have plenty of problems with corrupt and organized crime here anyway. To the point that I don't think it's entirely ridiculous to suggest moving a business to Mexico, depending on other details.

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

#272

Post by clavalle » Tue, Jan 15, 2013, 9:44 PM UTC

techsupporter wrote: post #136

bjcy wrote: post #76

Earlier quoted context omitted.

Texas isn't too shabby either. Plus, fewer natural disasters means less downtime.

Hopefully you aren't fond of electricity[0], water[1], schools[2], or roads[3]. 0 - http://www.ercot.com/news/press_releases/show/26375 1 - http://droughtmonitor.unl.edu/DM_south.htm 2 - http://www.statesman.com/news/news/state-budgets-call-for-cu... 3 - http://www.statesman.com/news/news/state-regional-govt-polit... (Texas is my home state. I left, though I keep close ties to it through family and frequent visits.)

The electricity problems are more or less self inflicted by the generators to loosen up wholesale rules. Texas has /plenty/ of energy.

Water is a problem...a BIG problem. But...we have a large coastline, salinated deep water tables etc, so if it comes down to it we could expensively desalinate. That would be brutal, though.

As far as schools -- the overall decline in public schools is counter-balanced by the rise of good charter schools. If you care about your kids' education there are options.

The road situation is kind-of a pain but here in Austin and Central Texas area at least, we have improving public transportation. And there is the toll option (of which I am not a fan).

But the tax policy is pretty nice. And Austin cannot be beat in terms of livability if you can stand the summer heat. I think we have a $20-25 billion surplus this year so we won't be going broke anytime soon.

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

#273

Post by [deleted] » Tue, Jan 15, 2013, 9:47 PM UTC

brianoverstreet wrote: post #247

dragonwriter wrote: post #231

Earlier quoted context omitted.

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.

[deleted]

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

#274

Post by cpleppert » Tue, Jan 15, 2013, 9:52 PM UTC

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…

I believe you are wrong.

From the law: (1) The term "qualified small business" means any domestic corporation (as defined in Section 7701(a)(4) of the Internal Revenue Code) which is a C corporation if all of the following apply:

Because the act explicitly qualifies that the exemption applies only if ALL conditions are met there is no question of legislative intent or judicial remedy that could be applied. There is no possibility of "revised terms" because that would mean essentially rewriting the statute to make some conditions optional, which was not the intent of the law.

Thus the entire statute(18152.5) is unworkable as explained by the FTB:

https://www.ftb.ca.gov/law/Qualified_Small_Business_Stock_an...

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

#275

Post by [deleted] » Tue, Jan 15, 2013, 9:56 PM UTC

enraged_camel wrote: post #82

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…

High taxes aren't an issue, since healthcare is free and there is a very strong social safety net.

[deleted]

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

#276

Post by KaeseEs » Tue, Jan 15, 2013, 9:56 PM UTC

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…

This is entirely wrong. North Carolina and later Pennsylvania were nailed years ago for similarly unconstitutional schemes favoring in-state companies and had to similarly solve them with retroactive taxes on their own citizens. The only options acceptable to the feds when a state is found to have systematically screwed over the citizens of the other 49 states like this are retroactive correction in one direction or the other - there is no option to stop doing it now and keep the ill-gotten gains from the past.

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

#277

Post by slavak » Tue, Jan 15, 2013, 9:57 PM UTC

preinheimer wrote: post #22

As a business owner this crap terrifies me. Washington State was looking at changing their tax code retroactively to get more money from Microsoft, luckily level heads (and I might presume, extensive lobbying) prevailed. I can't plan today for what yesterday's laws will be tomorrow.

If they're allowed to retroactively change how much they taxed you, can you refile your financial statements?

Yeah, didn't think so...

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

#278

Post by walshemj » Tue, Jan 15, 2013, 10:02 PM UTC

btilly wrote: post #230

chimeracoder wrote: post #176

Earlier quoted context omitted.

> Any programmer who thinks that they should have any right to have "their own time" and "side projects" should leave for a more friendly state. Like California. In New York, you can negotiate a contract to get this clause - it's quite common. The only difference is that contracts without the exemption (ie, total assignments) are considered enforceable, whereas in California, they aren't. That doesn't mean that Calif…

The difference is much larger than you acknowledge. First of all in California it is against the law to fail to inform people of their rights. Thus even in the cases when contracts include those clauses, the impact is severely watered down. Secondly in New York, even contracts without these clauses by default have them implicitly included. Thirdly the "claim we're working on everything" issue is real in California, b…

But can you a force the lawyers to enforce your rights in this case a company with deep pockets can drag out a law case for a long and costly time.

Decades in some cases the long running section A pension case went on for well over a decade in the UK conveniently for the employer that meant that the people effected by the decision started dieing off reducing the cost.

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

#279

Post by redthrowaway » Tue, Jan 15, 2013, 10:05 PM UTC

refurb wrote: post #266

redthrowaway wrote: post #151

Earlier quoted context omitted.

Also, taxes aren't high.

It's all relative, no? Long ago, when I moved to the US from Canada, I figure out what I'd owe in tax in Canada vs. what I was paying in the US. Keep in mind that I owed a home (mortgage interest deduction) and maxed out my 401k (which isn't a % of income like Canada). I was only making $50K/yr, but I was taking home an extra $5K by living in the US and not Canada. 10% more income is pretty good, no?

Depends how long ago you were here, but we've been seeing tax rates fall pretty consistently for a decade.

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

#280

Post by pc86 » Tue, Jan 15, 2013, 10:11 PM UTC

Niten wrote: post #194

pc86 wrote: post #79

Earlier quoted context omitted.

Perhaps defined-benefit retirement plans should not be in the public sector since they haven't been in the vast majority of the private sector for quite some time.

It completely baffles me how any reasonable person could look at the retirement and health benefits situation in our country and come to the conclusion that our problem is being too generous to the working class. Yes, the private sector has been much more effective than the public sector in collectively diminishing workers' wages and benefits in recent years. The logical conclusion is not that the public sector shoul…

It completely baffles me how any person who can add could look at state budgets in our country and come to the conclusion that our problem isn't guaranteeing massive levels of debt for work done decades ago.