Victory

DONE! Startup Employees to Senate: "Don’t Tax Stock Options Upon Vesting"

This petition made change with 430 supporters!


UPDATE:

NOV 16, 2017 — As Axios reported: Sen. Orrin Hatch, chair of the Senate Finance Committee, released markups to the Senate tax plan, and gone was the bit about taxing stock options and restricted stock units at the time of vesting.

Thank you for getting involved. Thanks also to Dan Primack of Axios for first writing about the issue, MJ Coren (QZ) and Dana Severson (Inc Mag) and Josh Constine (Techcrunch) who reported on this matter and linked to this petition.

Share or Re-Tweet to thank them here:
https://twitter.com/thomask/status/931200388321202181

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If you are an employee of a startup and received a stock option or RSU grant, this will potentially have a huge impact on you and this particular provision will be considered by the Senate as soon as TODAY.
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Reach out to your Senators TODAY and let them know that they “must remove Section III(H)(1) from the Senate Tax Cuts And Jobs Act”.

The best way to do that is to call their office and speak to the staffer who handles tax reform for them. 

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The current draft of the Senate Tax Reform Bill would tax stock options and RSUs upon vesting. Currently, stock options are taxed upon exercise and RSUs are taxed upon release of the underlying shares.


What this would mean is every month, when your equity compensation vests a little bit, you will owe taxes on it even though you can’t do anything with that equity compensation: You can’t spend it, you can’t save it, you can’t invest it. Because you don’t have it yet.

Taxing equity compensation upon vesting makes no sense!

 The US Senate, particularly the Republican leadership, needs to hear from you, the employees who will feel the pain of this change, that it is wrong.

Otherwise, this provision could become law. And that would be the end of equity compensation in startups as we know it.

What will happen is this provision becomes law?

  • Startup and growth tech companies will not be able to offer equity compensation to their employees.
  • Equity compensation will be replaced with cash compensation and the ability to share in the wealth creation for employees will be gone.
  • This will have profound implications for the competitiveness of the US tech sector.

So, what can we do about this?

  1. We have to move fast - this may be decided in days, not in weeks.
  2. Reach out to your Senators and let them know that they “must remove Section III(H)(1) from the Senate Tax Cuts And Jobs Act”.
  3. Sign & Share the Petition with your network and inside of your company.
  4. Comment below to show your support and share why this matters to you.

Most of the summary is from Fred Wilson's post, Axios first reported this and Techcrunch's Josh Constine wrote a followup.



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