

Help Ron Conway Abolish Stock Option Taxes in SF - throwawayact

Ron Conway is pushing an effort to abolish stock option taxes in San Francisco and I thought I'd enlist the support of Hacker News.<p>Dislaimer. Ron Conway has invested in my company. I'm using a throwaway HN account because we have not announced our investors.<p>Here's an excerpt from the email he sent to his portfolio companies:
"As you know, we are facing an uphill battle at City Hall in San Francisco, and need your help!! Right now, San Francisco is the only major city in the United States that taxes stock options, and there are two competing bills at City Hall to address the issue. One (sponsored by Supervisor Mark Farrell) would permanently stop this tax - private companies will not pay anything going forward, and existing public companies would be capped at their current levels. Another (sponsored by Supervisor Ross Mirkarimi) would only create a 6-year trial period, where public companies will still be subject to the tax, and private companies will still have to pay up to $750,000 a year once they go public.<p>We need to support Supervisor Mark Farrell's legislation --- this is VERY important to the technology community in San Francisco."<p>If you'd like to help:
1. Email the letter below to Board.of.Supervisors@sfgov.org; mayoredwinlee@sfgov.org &#38; BCC sfstartups@votizen.com (Votizens is keeping a tally of supporters).
2. If you're not a voter or live outside of the city, you can tweet your support with the #sfstartups hashtag.<p>---------<p>Dear Mayor Lee and Supervisors,<p>We are excited that City Hall is focusing on creating a solution to the stock options issue as a member of the technology community in San Francisco, I strongly urge you to support Supervisor Mark Farrell's stock option legislation!<p>We support Supervisor Farrell's proposal for a number of reasons:<p>1. City Hall has to create a permanent solution to the problem, or tech companies (and the jobs they create) will continue to evaluate leaving San Francisco. A temporary solution sends the message that San Francisco is not interested in creating long-term solutions for the local economy. I assume that after 6 years San Francisco won't start taxing stock options again, so why not create a permanent solution?<p>2. Private and public companies should both be treated equally - it is the only common-sense solution. Supervisor Farrell's legislation ensures that both private and public companies benefit - not only are private companies thinking about leaving San Francisco, but larger, public companies (which employ thousands of San Franciscans) are growing their employees outside of San Francisco. I want these jobs to stay in San Francisco – and Supervisor Farrell’s legislation will do just that.<p>3. Supervisor Farrell's legislation Insures that San Francisco's general fund will not face any additional budget deficit. City Hall won't collect more taxes on stock options, but his legislation is designed so that current levels of tax revenue from stock options will stay constant.<p>Supervisor Farrell's legislation strikes the right balance in creating incentives to keep tech companies in San Francisco, while protecting the City from adverse budget impacts. Our local economy is at stake - please focus on the long-term, and support Supervisor Farrell's legislation!!<p>Sincerely,
[Insert name]
[Insert company]
[Insert company address]
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jeffreymcmanus
I'd be much more interested in helping Ron Conway restore the one week of
instruction per year that's been cut because of lack of funding to SF schools,
assuming Ron Conway cares about such things. Which, you know, he should, since
schools are responsible for producing raw materials (educated young people)
for the startups he invests in.

The mindless drive to cut taxes (particularly taxes for the wealthy) is
degrading American society. It's time to set aside "tax cut" as the universal
solution to every conceivable business problem.

~~~
drusenko
This is not a tax cut. San Francisco is the only major city in the US that
taxes the _company_ for an employee's personal gain on stock options.

This is eliminating a tax that was very, very poorly thought out as it
effectively precludes any company from going public in the city of San
Francisco. A company doing an $100M IPO might effectively be required to pay
all $100M raised to the city of San Francisco as tax on the stock options
gains of employees.

Discuss the merits of tax cuts elsewhere -- this is an obvious situation where
this tax never should have been in the first place, and will be doing a
considerable amount of harm to San Francisco if it is not repealed.

~~~
jeffreymcmanus
If you're advocating the removal of a tax, then yes, it's a tax cut. Whether
it does harm to San Francisco or not is absolutely worth discussing. Let's
start by asking where the city will make up the revenues it loses from
removing this tax. Or is your solution to lay off more teachers?

~~~
drusenko
San Francisco does not currently enforce this tax, and it does not currently
collect any revenues from it, so there is no revenue to be made up. No one was
even aware of it until it was discovered recently.

~~~
jeffreymcmanus
Which makes its repeal a priority why, then?

~~~
drusenko
Because a lot of SF-based startups are looking to go public in the next few
years. This has not been the case before.

~~~
jeffreymcmanus
So this is a tax cut for millionaires, then. Got it.

~~~
drusenko
If you want to blindly support any tax because it's a tax, and blindly hate
any company that makes money because it's "an evil corporation", you are free
to do so.

But it's abundantly clear by the facts in this situation that this is a net
positive for San Francisco.

~~~
tptacek
If you want to alienate people from your point of view, caricature their own
views. The person you're responding to doesn't seem to support taxation for
taxation's sake, and doesn't seem to believe companies that make money are
"evil".

~~~
drusenko
I agree, that response was out of line on my part. There were many better ways
to phrase that.

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alexg0
I would think much more effective approach would be to vote with your feet.
Move your office out of the city, and let the distributionists in the city
hole make their own decisions. Maybe send them a letter informing them you
moved and why.

