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by jerf
5554 days ago
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It seems to me that it is more accurate to say that Twitter is seeking to not be specially treated with an extra-special tax that appears to exist nearly nowhere else in the US. The article says "Going public from San Francisco could cost companies like Twitter, Zynga and Yelp as much as half of the IPO proceeds in taxes." I can't back this and would be interested in anybody who has more details about whether this is true, but if it is true, this isn't a company that is asking for special tax breaks that nobody else gets. This is a company that literally can not go public under a regime like that as it is, as the article says, an immediate failure to honor their fiduciary duties. They literally can not continue to function and grow normally and must leave. (However that number seems high to me, even assuming it's 50% of what's left after everybody else gets their taxes. I have no inside information but my BS detector is twitching.) |
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Yeah, that part is total BS. The tax is 1.5% on payroll, and treats stock option gains like payroll. So if Twitter IPOed at $12 billion, and employees owned 1/4 of the shares via options, it could cost...$40-50 million. It would only be half in relation to the nominal value of the share options at time of issue, rather than post-IPO. Having said that, though, nobody is strenuously supporting the 'IPO tax' - not even the unions or the reflexively anti-corporate Bay Guardian. Almost everyone sees the point that share options are a carrot to attract talent to a startup business that could otherwise afford to go elsewhere, and the gains are the just reward for risk + economic growth, so any taxes should be on the low value of the share options at time issue.
The objections I've been hearing are towards other aspects of the plan, like the payroll exemptions for existing businesses and the expansion of the area to include properties owned by large commercial landlords, and less about Twitter than the headlines suggest.