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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

#281

Post by techsupporter »

clavalle wrote: post #272
techsupporter wrote: post #136

Earlier quoted context omitted.

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…

I find it amusing that you described Austin, the one big area of Texas that leans dramatically against the rest of the state, as the most liveable and put together. Kind of proves my point relative to the Legislature at large.

For what it's worth, Texas has never had a $25bln surplus. In the 2011 biennium, the budget had to cover a $27bln shortfall. (Note that all Texas budgets are written to cover two years, as the Legislature meets for 140 days on every odd-numbered year.) This biennium's budget will start out with approximately $8bln in unspent revenue (mostly left over from dramatic cuts made in the 2011 two-year budget) and starting out with $5.3bln in "unpaid bills" around the Women's Health Insurance Program and natural disaster spending. (http://www.dallasnews.com/news/politics/texas-legislature/he...)

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

#282

Post by run4yourlives »

illuminate wrote: post #244
run4yourlives wrote: post #88

Earlier quoted context omitted.

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

Sorry, I understood it wrong. It's being referred to as "the next Halo", which is kinda silly.

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

#283

Post by saryant »

austingunter wrote: post #225
saryant wrote: post #184

Earlier quoted context omitted.

I did half of your roundtrip. Grew up in the Bay Area, moved to Texas. Swore I'd end up moving back but seven years later I have absolutely no intention of doing so.

CapitalFactory.com is by far the most up and coming startup community in Austin.

I'm actually in Houston but I've been heavily involved with some of Geekdom's efforts in San Antonio. Great stuff going on there.

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

#284

Post by muzz »

thwest wrote: post #261
brianoverstreet wrote: post #246

Earlier quoted context omitted.

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…

> Yes, that may have cost them some $$$, but probably not as much as you think, Why didn't you report this number?

Don't assume that he knows this number.

In the original article, he didn't even mention the amount of tax breaks given by the code thus far.

I doubt the purpose of the article is to inform, as much as it is to tell you that you should be outraged about something anti-entrepreneurial done by California.

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

#285

Post by jamesaguilar »

bubbleRefuge wrote: post #223
nostromo wrote: post #172

Earlier quoted context omitted.

I also think states and locales should be able to declare bankruptcy and restructure their obligations. Currently there is no clear way to get out from under prior bad governance. Here's a good article about how San Bernardino is trying: http://www.reuters.com/article/2012/11/13/us-bernardino-bank... > a third of the city's 210,000 people live below the poverty line, making it the poorest city of its size in Californ…

Doesn't feel like residents of California are getting a value for the % of tax that we pay overall. If you are self-employed and make say 150K you are going to be paying around 35% fed + 6% SS employee + 6% SS employer side + 9% Califonia. total = 55%. ( Granted the taxes are applied on a graduated basis so the effective tax rate would be less.) In Europe, they pay on the order of 50% with free healthcare and a great…

I'm sorry what? 35% federal income taxes on earnings of 150k? No.

Over $85,650 but not over $178,650 -> $17,442.50 plus 28% of the excess over $85,650

Total federal payment: 17.4 + .28(150-85) = 35.6

35.6 over 150 = .23, and that's before factoring in the deduction you get to take for your California payment, or the standard deduction if you choose not to itemize.

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

#286

Post by refurb »

redthrowaway wrote: post #279
refurb wrote: post #266

Earlier quoted context omitted.

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.

Add it all depends on what state/provinces you're comparing. I would fathom to guess that the lowest in Canada vs. the highest in the US isn't all that different, especially if you don't take advantage of country specific deductions.

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

#287

Post by almost_usual »

dyno12345 wrote: post #265
king_magic wrote: post #213

Earlier quoted context omitted.

The cost of living is brutal here; e.g. $100K in NYC really isn't that great.

Don't forget to factor in the savings from not needing a car.

I live in the Midwest and do not own a vehicle, some cities here have pretty good public transportation!

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

#288

Post by ericd »

sp332 wrote: post #190
pc86 wrote: post #148

Earlier quoted context omitted.

First of all, I don't know about you, but I don't come to HN and try to have a somewhat intelligent conversation just to be called stupid for expressing an opinion. Secondly and to your point, I am only speaking of defined-benefit "If you work here for x years you get y% of your salary." This is to say nothing of the health care (which is generally better than the private sector), the hours (which if you don't work f…

"Perhaps defined-benefit retirement plans should not be in the public sector" - that's not an opinion, that's an idea. Not a good idea, either.

Why is it not a good idea? Given that he and I both don't understand why public sector jobs inherently require defined-benefit retirement plans when the vast majority of workers don't have them, it's apparently not obvious that it's a bad idea.

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

#289

Post by stevenwei »

bubbleRefuge wrote: post #223
nostromo wrote: post #172

Earlier quoted context omitted.

I also think states and locales should be able to declare bankruptcy and restructure their obligations. Currently there is no clear way to get out from under prior bad governance. Here's a good article about how San Bernardino is trying: http://www.reuters.com/article/2012/11/13/us-bernardino-bank... > a third of the city's 210,000 people live below the poverty line, making it the poorest city of its size in Californ…

Doesn't feel like residents of California are getting a value for the % of tax that we pay overall. If you are self-employed and make say 150K you are going to be paying around 35% fed + 6% SS employee + 6% SS employer side + 9% Califonia. total = 55%. ( Granted the taxes are applied on a graduated basis so the effective tax rate would be less.) In Europe, they pay on the order of 50% with free healthcare and a great…

Just crunched the numbers to see what the effective rate actually is. Assuming self-employed and single in California for 2012, with standard deduction and 1 exemption, your taxable income on $150,000 total income is $131,416, and your federal income tax is: $30,257. Your self-employment tax is: $15,468. Your state income tax is: $10,373.

Total effective tax rate is: 37.4%

A bit higher than I thought it would be overall, but not quite close to 55%. Of course, if you're at that level of income you should probably set up an S-corp to save on SE tax and dump some money into a 401(k) to further reduce your taxable income.

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

#290

Post by anigbrowl »

DannyBee wrote: post #89
Aloisius wrote: post #68

Earlier quoted context omitted.

Actually, California's budget is balanced and it expects a surplus in two years. http://www.nytimes.com/2013/01/11/us/california-balances-its...

Only after doing things such as threatening to cut 300 million from education unless folks raised taxes (retroactively as well). If your method of balancing the budget is always asking for more money, you haven't really balanced the budget. What are you going to do in a few years when those tax hikes expire, and you suddenly lose the same amount of revenue? I look forward to a few years when we begin to hear the clai…

What are you going to do in a few years when those tax hikes expire, and you suddenly lose the same amount of revenue?

Assumes economic growth of exactly 0%.

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