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Don’t Tax Options and RSUs Upon Vesting

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Re: Don’t Tax Options and RSUs Upon Vesting

#161

Post by austenallred »

pascalxus wrote: post #142
austenallred wrote: post #30

Earlier quoted context omitted.

That’s simply incorrect. I founded a company that raised a mammoth seed round in Silicon Valley (not $8m but more than $3m), and we do pay some high salaries, but Apple and Facebook still pay salaries that are much, much higher. Critical employees have joined us while taking $100,000/yr pay cuts, despite. Having a salary in the six figures. To think that startups can play that game of “equity doesn’t matter” is just…

I don't think so. Why should employees make up such a large percentage of the money invested in the company? When you take a salary cut of 50K, it's like taking that money an investing it right then and there. Why should an employee be investing 50K of their own money into the company every single year? It's bad enough that someone would invest 50K in a single company: one that picked them, not the other way around,…

Maybe an employee believes in the company and wants to take part, deeming the risk is worth it for them? Clearly that's what's happening.

It's certainly rational in some cases to take the risk of owning a portion of a company instead of taking the same amount of cash and putting it in the S&P 500. You're always investing your time and money, it's just a matter of where.

And for what it's worth, if you're getting paid $250k at Apple, you can probably go back at almost any time.

Re: Don’t Tax Options and RSUs Upon Vesting

#162

Post by kolbe »

t_fatus wrote: post #117
kolbe wrote: post #102

Earlier quoted context omitted.

If they don't have any value, then you shouldn't have any problem with them going away. You obviously consider them valuable, or else you wouldn't be defending them.

Indeed the right to buy a stock is valuable, but as an employee / the state you should postpone the taxation to when the value is actually retrieved by the person you tax. It's a bit like saying 'You're house is worth X, you should be taxed regarding this price, even if you don't have yet made any profit'

You literally described property taxes just now.

Re: Don’t Tax Options and RSUs Upon Vesting

#163

Post by scarmig »

Gargoyle wrote: post #148
ydt wrote: post #111

Earlier quoted context omitted.

Why would you be shocked? There's all sorts of nasty things in these tax proposals for the less than wealthy. They are looking everywhere they can to find offsets to make the tax cuts for the donor class work under the budget rules.

If you're getting options and RSUs, you're going to be upper middle class at least, and thus wealthy by the definitions of most Americans.

Not by the definition of this bill, though, which is what matters.

The majority of HN readers are going to see a net increase in taxation, to fund giveaways to the GOP's donor class.

Re: Don’t Tax Options and RSUs Upon Vesting

#164

Post by maerF0x0 »

eldavido wrote: post #16

I think the way we do options in startups needs a more fundamental rethink. I wouldn't be too sad if the current system falls on its face. I like Buffett's proposal from a few years ago. They don't grant stock, they simply pay cash (bonuses) and if employees want to buy in, it's their money, after all. What's really needed is a way some group of insiders in a company can transfer shares among themselves or outsiders.…

>What's really needed is a way some group of insiders in a company can transfer shares among themselves or outsiders. This would probably take a big change in securities laws to create rules around how unaudited equities could be traded.

Most option/stock agreements give the company right of refusal and they can block sales

>They don't grant stock, they simply pay cash (bonuses) and if employees want to buy in, it's their money

Doesnt work for private companies, there's no market to buy them in

> Maybe the solution is for companies to become public earlier and have investors operate

I've recently been thinking about the ramifications of more and more of our economy being privately traded. It means that many groups of people are unable to use that slice of the economy to back things like retirement funds. Also can technically lead to a run on equity where folks are trying to save but are just competing over the same limited pool of assets. Articles like [1] are indicating that the number of IPOs per year are dwindling. Maybe a law that says companies valued over $THRESHOLD must be public?

[1]: http://fortune.com/2017/01/20/public-companies-ipo-financial...

Re: Don’t Tax Options and RSUs Upon Vesting

#165

Post by briandear »

nsxwolf wrote: post #113
briandear wrote: post #23

Earlier quoted context omitted.

State tax write offs are fundamentally unfair. The US government effectively subsidized high tax states. A guy making $100k in Texas ought to have the same exact tax federal burden of a guy making $100k in New Jersey. As it stands now, those two guys pay a different amount to the federal government. That is unfair. A state can raise state taxes will little impact on residents however it results in lower tax revenue t…

Don't you have to do more work to make a claim about who is subsidizing who? How much does each state receive in federal grants and aid? And the guy in Texas has more money in his pocket than the guy in New Jersey no matter what. It's a weird thing to get hung up on. Nobody ever talked about the fairness of this deduction before. This was cooked up as a GOP talking point in some smoke filled room somewhere. Class env…

Federal grants and aid is a seaparate issue. I’m Ron Swanson when it comes to that. I want a smaller federal government period. State and local governments should have the power.

Re: Don’t Tax Options and RSUs Upon Vesting

#166

Post by pc86 »

logfromblammo wrote: post #144
austenallred wrote: post #53

Earlier quoted context omitted.

In this instance the exchange you would have to make would be crippling startups and small businesses, which is where the vast majority of the growth of the economy happens. As an aside, how many companies do you see actually building Snapchat for Etsy-linked tumblr posts? I see that criticism of Silicon Valley all the time, yet despite being in the heart of it I rarely see that kind of company. I’d guess an order of…

That's just it. Where I am, I don't see new companies building anything . YC isn't here . I'd love to work for a startup with a like-brand-X-but-for-Y or a word-salad elevator pitch, that also offered a compensation package as good as any found in Silicon Valley. But I don't get options or RSUs, or even cash bonuses. I get billed to a customer at $200-$400/hr and get maybe $50-$60 of that in total compensation. It's…

> I'd love to work for a startup with a like-brand-X-but-for-Y or a word-salad elevator pitch

Why? I'd much rather actually deliver something to the client, even if...

> I get billed to a customer at $200-$400/hr and get maybe $50-$60 of that in total compensation.

Then it sounds like everything else around what you deliver is worth at least $140-350/hr. If it's really so easy I'm sure you could offer your services for $100/hr, take a nice big raise and save your clients hundreds of thousands a year.

> it seems the culture has an unnatural aversion to spreading itself somewhere else

Because even for a culture that bitches and moans about how old school business ways are out dated, they still insist you be within a 2 hour drive of your investors, so that when Ashton Kutcher gets mad at someone he can yell at them in person instead of over ~~email~~ ~~hipchat~~ Slack.

> It will take my money, but won't give it back by spending it in somewhere in my neighborhood.

Stop buying shit from startups

Re: Don’t Tax Options and RSUs Upon Vesting

#167

Post by pc86 »

s73ver_ wrote: post #123
3pt14159 wrote: post #62

Earlier quoted context omitted.

The other problem is cryptocurrencies have created a ton of new companies that are paying big for talent. I actually think this is a good thing. Too many people were working on dumb startups back then. I want more engineers at Tesla.

Are they paying in cash, or in their cryptocurrency?

ICO tokens obv

Re: Don’t Tax Options and RSUs Upon Vesting

#170

Post by nsxwolf »

briandear wrote: post #165
nsxwolf wrote: post #113

Earlier quoted context omitted.

Don't you have to do more work to make a claim about who is subsidizing who? How much does each state receive in federal grants and aid? And the guy in Texas has more money in his pocket than the guy in New Jersey no matter what. It's a weird thing to get hung up on. Nobody ever talked about the fairness of this deduction before. This was cooked up as a GOP talking point in some smoke filled room somewhere. Class env…

Federal grants and aid is a seaparate issue. I’m Ron Swanson when it comes to that. I want a smaller federal government period. State and local governments should have the power.

It's not a separate issue if someone is making the charge that he (a taxpayer from a state with no taxes) is subsidizing me (a taxpayer from a state with taxes) - when it could very well be the case that I'm actually still subsidizing him.
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