[lyncnshare]

The tax only applies to realized gains. As long as they aren't selling their shares they aren't being taxed. They can also sometimes contribute the shares to tax advantaged vehicles (remember Romney having $101 million in his IRA [1]) or set up other structures to minimize their tax burden. That being said, Northern California is a wonderful place and housing and cost of living prices indicate that many people are willing to pay to live there.

[1] http://www.reuters.com/article/us-usa-campaign-romney-ira-id...

[downandout]

>That being said, Northern California is a wonderful place and housing and cost of living prices indicate that many people are willing to pay to live there.

No place is wonderful enough to pay billions of dollars in extra taxes just to live there. If you are a top engineer making $500K/yr, you're only paying ~$65K/yr in CA taxes, and you wouldn't make anywhere close to $500K in other cities. So the decision to live in CA makes perfect financial sense in that scenario. But in the case of a billionaire founder, it simply doesn't make any sense to sell shares while living as a California resident. You're essentially volunteering to pay a ~65% increase in total capital gains taxes over what they would be in a tax-free state.

[sokoloff]

There's the fact that Facebook is headquartered in California, and having to establish and maintain NV residency might be more of a burden than Mark is willing to do. (Imagine that CA will scrutinize that claim carefully.)

If Mark has to stay 183 nights in NV (or stay in NV more nights than anywhere else), that might be more of a personal burden and inconvenience than paying CA tax. And if it harms his ability to lead his company, it might ultimately be more expensive as well...