Taken from Axios Pro Rata Newsletter
Excerpts that stick out to me:
BEGIN QUOTE:
This only applies to employees more than $130,000 per year and vesting more than $100,000 worth of stock per year.
Imagine you make $130,000 per year at a privately-held company and have $200,000 worth of annual options vesting. You obviously are required to pay regular taxes on your $130,000 income, but now also must pay taxes on $100,000 worth of stock options (again, the first $100k is excluded). Or, put another way, you make $130,000 but are paying taxes on $230,000. Not only might you not have the cash, but there's also the possibility that the stock will later go to zero or liquidate lower than your strike price — but the bill includes no claw-back mechanism. So you've now paid taxes on money you never saw. [Emphasis mine]
The bottom line: This isn't how much people pay in taxes. It's about when they pay it. It would make more sense for the timing to match the receipt.
END QUOTE
I don't work at a startup and am not paid by stock options, so this won't even affect me, but this just seems outrageous to me. Am I overreacting to be pissed off by this?
Yes.
That said, it shouldn't be a surprise that Bernie doesn't care about the collateral damage from his "tax CEOs into oblivion" strategy because he's an ideologue, not a reasonable left-wing politician. Vote against him in the primary.
Elaborate, I'm overreacting because it won't affect me, because it probably won't pass, or because you believe the bill isn't outrageous?
Because you said it won't impact you and it is unlikely to pass, but also because you said it pissed you off and your instinct was to post it to WSO.
Instead of starting today's Bernie Sanders thread, call and write the offices of Senators Sanders and Van Hollen. Call and write your own Senators with your objections to the collateral damage this bill could cause. Make sure you show up to vote in your respective state, in the primary if you're allowed based on your state and affiliation, and in the general for sure. Participate in the process.
Or if you like the general idea of his policy, support the supporting politicians who will push for certain amendments rather than wholesale against the entire thing.
In addition to what CRE said up above, I am doubtful Bernie is dumb and doesn’t understand consequences. I may be wrong. But I think it’s a nice sound bite to get more voters for him.
The average voter doesn’t understand stock options (I would say the vast majority barley understand what a stock is). Most people haven’t heard of vesting. But these greedy CEOs get relatively low salaries and a ton of stocks. No wonder they’re super rich and I’m in an apartment! Tax them. This is unfair.
Sounds nice and simple for people who understand the entirety of the world’s problems and how to cure cancer and homelessness. That was sarcasm. People don’t understand that this could impact other people and that, as OP noted, someone could owe taxes for money they really don’t have right now. I’d imagine Silicon Valley could be majorly screwed. A lot of people get most of their income in stocks.
Exactly ... raising the tax rate is one thing, but paying prior to realization of income is outrageous.
Bernie doesn't understand economics, finance, business, and how the real world operates. He is a lifelong socialist who supported mass nationalization of industries and praised communist regimes. Why would you trust that Bernie would make good policies?
I don’t trust him. I’m far from a Bernie supporter. I think it’s absolutely stupid we may have him and Trump running. Maybe Bernie is stupid. It’s possible that he just wants to implement things for votes, not because he actually believes in it. Maybe I’m wrong. I think stupidity and/ or amorality are both horrible traits for a presidential candidate. I’m not a supporter of Bernie. I hope Bloomberg takes it. But am doubtful
I am not sure if you can vote in the primary. If you can, you might want to consider voting for Bloomberg who has more moderate views.
A vote for Bloomberg at this point is a waste. He isn't winning and he currently doesn't have any ads booked beyond Super Tuesday.
The anti-Bernie vote is Biden.
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