VFX Before and After: Star Wars: The Force Awakens - <AUTHOR> https://www.youtube.com/watch?v=AlWiq84epH4 <comment><USER2> Video is inaccessible for me.</comment>


Why Data Structures Matter: left, right folds, btrees  - <AUTHOR> http://joelneely.wordpress.com/2011/03/05/why-data-structures-matter/ <comment><USER2> Guy Steele's talk: How to Think about Parallel Programming: Not!

[http://www.infoq.com/presentations/Thinking-Parallel- Program...](http://www.infoq.com/presentations/Thinking-Parallel-Programming)

<comment><USER3> More Guy Steele, more on topic. It's a much more in-depth investigation of the topic of this article:

<http://vimeo.com/6624203>

<comment><USER4> This talk is the most interesting material I've seen in years. I first saw it some time ago and it has stayed on my mind. I believe Steele is entirely on the right track.

</comment></comment></comment><comment><USER5> I highly value "Programming Pearls" by Jon Bentley in this regard. He proposes a problem and then solves it in naive way followed by the right way/ways. I realized the importance of choosing correct data structure for a particular problem from that book.

</comment><comment> cgrand-net In the same vein, albeit more on the implementation-side, there was a nice talk by David Liebke at last Clojure Conj: <http://blip.tv/file/4645227></comment>


Obama campaign hiring frontend devs - <AUTHOR> http://careers.stackoverflow.com/jobs/12950/frontend-web-developer-obama-america

<comment><USER2> They also posted in the who's hiring thread this month.</comment>


Universe is expanding up to 9% faster than we thought, say scientists - <AUTHOR> https://www.theguardian.com/science/2016/jun/03/universe-is-expanding-up-to-9-faster-than-we-thought-say-scientists <comment><USER2> Anyone with more background in astrophysics than I know if this is primarily attributable to uncertainties in our estimates of \Lambda or something more fundamental?</comment>


Ask HN: What is the best device for reading technical e-books? - <AUTHOR> I love the way how iPad works with PDFs,epubs etc. It is a glorified reader but works perfectly. I wish something like kindle would match the experience. <comment><USER2> If you don't mind shelling $$$ there's the Sony Digital Paper: [http://pro.sony.com/bbsc/ssr/show- digitalpaper/resource.solu...](http://pro.sony.com/bbsc/ssr/show- digitalpaper/resource.solutions.bbsccms-assets-show-digitalpaper- digitalpaper.shtml?PID=I:digitalpaper:digitalpaper)

<comment><USER3> Just so people have a idea what 'shelling $$$' means, pricing available here: [https://goo.gl/GYeMsH](https://goo.gl/GYeMsH)

</comment></comment><comment><USER4> I have both the new Kindle Paperwhite and the old Kobo mini e-reader, and I like the Kobo much better. Kobo's UI is far superior, and it connects with Pocket, so you can catch up on your articles too.

<comment><USER5> I also love the Kobo.

They have hidden internal MicroSD cards. A few screws and you can upgrade your device pretty easily.

I disliked the "activation" process of setting up an account stuff and needing to connect to the Internet, but there are workarounds for that. [http://uscoffings.net/clc/tech/embedded/kobo- touch/](http://uscoffings.net/clc/tech/embedded/kobo-touch/)

</comment></comment><comment><USER6> I have the Sony Digital Paper and I can't say enough good things about it. It has been a gamechanger. I have thousands of papers/books on it, and I find myself reading more papers and making notes on them where ever I am.

Pros: 1\. Native pdf reader. It is not an epub reader, but epubs can be converted to pdfs easily (the difference between epub and pdf is that the latter is formatted to a particular page size)

2\. A-4/Letter sized documents can be read as is. I don't want to scroll.

3\. The advantages of an e-ink display. (i) Good contrast. My eyes don't hurt the way they do when I stare at a lit screen. (ii) I don't use the built-in wifi, and I think I charge it once a month.

4\. Supports handwritten annotations. The stylus is responsive, the resolution is high, the lag is small, and the friction is just right ... it feels like writing on paper. I use the device to write lengthy notes (tens of pages).

5\. Multiple tabs openable on the same document. I keep separate tabs open on the bibliography and on important figures to be referenced.

6\. Touch screen - standard gestures for zooming, scrolling and panning.

7\. Extensible memory (SDCard) - I have tons of documents, but haven't come anywhere close to filling up the internal 4G mem.

Cons:

1\. Price. $850 could buy a whole lotta other things.

2\. The disadvantages of an e-ink display: While it is snappier than the kindle, there's plenty of room for improvement. I was beside myself with excitement when I had first heard of Mirasol. where are they now?

\</comment><comment>-

And if anyone from Sony's reading this, I'd like to be able to select pieces of a drawing and drag them around. I'd like to be able to reorganize my notes. It would be so trivial for you to add this feature.

<comment> alok-g How easy/quick is it to transfer files to it (without going through the Internet)?

Where and how are the annotations saved? Can you bring them back out of the device and see them on the PDF still?

Thanks

<comment><USER6> It comes with a micro-usb connection, and looks like a regular flash drive to the computer, and just as fast.

The annotations are saved on the pdf file itself. I write all my notes that way.

</comment></comment></comment><comment><USER7> Thinking of buying an iPad just for this use case. Most of my technical books are in PDF form, converting them to any other format ruins the readability, and the PDF on the kindle is terrible to navigate.

<comment><AUTHOR> Yes. Thousand times yes. If i could just justify spending so much money on ipad to use it just for reading.And anyway i would want the latest device which has not been released yet (october?).

I would still be worried about battery life (as it requires much more effort to keep an eye on than on an e-ink reader).

And do not forget about the screen differences. It's still more pleasant to look at an e-ink than on the traditional display.

<comment><USER7> I've managed to read on my iPhone and my Mac, I've found it easier on the phone due to portability and the touch screen. But the i've found I can't sustain long periods on either.

</comment></comment></comment><comment><USER8> I recently got a Samsung S 8.4" tablet primarily for reading and I'm very happy. Super fast, good battery life and with an excellent screen but a little pricey.

Previously I used the original Nexus 7 but found it to be too slow and too small.

</comment><comment><USER9> I have a 1st gen Google Nexus 7, 32GB RAM. For technical books requiring scaling, color and illustrations it is pretty good with Manatano Reader.

</comment><comment> Larx-3 I just ordered a Kobo Aura H20, on which I intend to install KOReader (Kindle/Kobo Open Reader) for an improved PDF reading experience.

</comment><comment><USER10> Desktop with a big monitor. Unless it needs to be portable.

</comment><comment><USER11> Kindle DX

<comment><USER12> i have a DX, its a wonderful device... except for PDFs. just to slow to flip back and forth. Especially for technical information.</comment></comment>


Don't Tax Options and RSUs Upon Vesting - <AUTHOR> http://avc.com/2017/11/dont-tax-options-and-rsus-upon-vesting/ <comment><USER4> I'm going to say something that may be unpopular. Hopefully my karma can handle it.

The latest analysis I saw of this from Fenwick says that this is only applying to non-qualified stock options. Employees get NSOs when you vest too much to get ISOs in a calendar year, based on the vesting schedule and value at the time of grant, not fair market value at time of vesting of the option. That limit is $100K, for people who didn't know.

[edit: clarified the issue of cap calculation since my original post was in error. The point doesn't change.]

Who else gets NSOs? Non-employees, like directors, for instance.

This tax bill is pretty awful. However, it's not obvious to me that it destroys startup compensation -- ISOs will still be given to most employees, until you are getting too big for them, when you get RSUs, just like today. If anything your average tech employee will potentially do better -- I had to sell a ton of stock simply to pay AMT on the rest of the stock I exercised at my last startup. AMT goes away in this plan, so people won't have to deal with that issue.

<comment><USER5> It is _not_ the strike price or the exercise price. It is more-or-less the fair market value of the options when they vest, but if you need to compute your taxes, consult an accountant. (Yes, this rule is terrible for planning, because you don't know what fraction of your shares are ISOs until they vest).

Today, ISO's are commonly given to engineers at pre-IPO startups. Nothing says they have to go to execs. Those engineers end up holding them for years before they can exercise, so $100K is a small fraction of a normal Silicon Valley startup, when you divide it out. Many startups take 6-10 years to IPO these days.

Source on $100K cap: stock plan admins at work, and also this article: [http://help.capshare.com/knowledge-base/what-is-an- iso-100k-...](http://help.capshare.com/knowledge-base/what-is-an- iso-100k-violation/)

Please do not comment on technical nuances of the tax code you do not understand. Misunderstandings around this stuff bankrupts people all the time. (especially the type of people that hang out here!)

<comment><USER6> "It is not the strike price or the exercise price. It is more-or-less the fair market value of the options when they vest, but if you need to compute your taxes, consult an accountant"

This is not correct. The $100k threshold is calculated based on the fair market value of the option _at the time of grant_ , which by definition is the exercise price. So you calculate how many shares you will vest in each year, multiplied by your exercise price, and as long as that is under $100k you are not over the limit and your option remains an ISO. If you're over, then the portion that exceeds $100k is treated as an NSO, but you can still get ISO treatment on the other part.

I'm a startup lawyer and having worked with 100+ companies on their options, it's really not that common to get tripped up on this.

<comment><USER7> What reasons might an early stage company (founders + 3 employees, say) have for giving the employees NSOs instead of ISOs? I was once in this situation and everyone I spoke to about it thought it was a flat-out mistake on the company's part, but I've always wondered if there was another reason.

<comment><USER6> Only a couple or reasons they'd deliverately do that. Most common is if the employee is outside the U.S. and not a U.S. taxpayer, making the distinction irrelevant.

Or, if you plan to early exercise immediately upon receipt, you actually are better off with an NSO (due a shorter holding period for long-term capital gains treatment and there being no spread between exercise price and fair market value at the time of exercise), so sometimes you will see that too.

Or, if you want a longer than 3 months exercise period post-termination, you'll do an NSO instead of an ISO.

But otherwise, yeah, maybe just a mistake.

<comment><USER8> My employer has issued _all_ option grants as NQSOs (with "normal" 4 year vesting, but also with 90 day exercise or forfeiture, with FMV clawback right, with rather tepid spread between preferred and common after seed). I'll be charitable and suppose the big old law firm wrote this out of startup inexperience and a very strong dose of CYA. Any suggestions on what to do about this?

<comment><USER6> Sounds pretty unfriendly, but no, no suggestions really - it's up to the company what they want to give you and some companies are just stingy like that. Wish I had something more for you.

</comment></comment></comment></comment></comment></comment></comment><comment><USER9> The importance of this change can't be understated; this effectively kills compensation at startups in the form of equity, and would make startups completely unable to compete with incumbents.

Anyone that has options at a company that grows quickly would be paying tens or hundreds of thousands in taxes to keep their equity, which is still effectively a very risky bet that a company will end up huge.

No one would want options anymore, which would make it impossible for startups to compete with large, cash-rich incumbents. That should be the last thing you want if your goal is for an economy to grow.

<comment><USER10> > No one would want options anymore, which would make it impossible for > startups to compete with large, cash-rich incumbents.

You're right; nobody would want options. So we have to start paying people in actual shares if we want to give equity. Which means you have to give employees way more of the company than deep-pocketed investment bankers who will still invest -- despite their temper tantrums to the contrary -- because there are very few companies that can absorb a nine-to-ten figure investment and do something productive with it.

Just because the system as it exists right now would be destroyed doesn't make this a bad change. The system right now is overly complicated, leads to workers abandoning in-the-money options or staying at a job they hate, and is heavily slanted towards early employees.

But the current model of venture financing is largely dead regardless of whether this change goes through. It's already being replaced by cryptocurrencies / ICOs, which seem like a far more sensible method of issuing restricted stock in excess of the SEC's limitations (since the right crypto / wallet scheme for something like this would not be anonymous). I think ultimately, cryptocurrencies are going to replace RSUs, but the cryptocurrencies that replace RSUs will probably have many of the same governance restrictions as RSUs.

How we treat them for tax purposes is a different problem, but it should make the RSU liquidity problem less troublesome (e.g. you can sell some of your crypto-RSUs back to the company in exchange for ETH/BTC, then convert back to USD and pay your taxes).

<comment><USER11> > So we have to start paying people in actual shares if we want to give > equity.

People wouldn't want that either; they'd still have to pay tax on shares that were, for practical purposes, worthless at time of issue (and time tax due) and would statistically probably always be worthless.

Under this system, you'd really have to abandon compensation with stock of any sort for non-publicly traded entities.

<comment><USER10> I think the key here is that the valuations would change and likely be far more realistic. We certainly haven't seen the whole story on cryptocurrencies to know what regulation needs to apply, so I'll withhold any speculation there. But I have a feeling that with the amount of data a blockchain-based security gives you, the need to restrict non-publicly traded entities somewhat goes away (since you can always audit after-the-fact if the ledger is distributed).

In any case, the market would be far more liquid. I'm not a huge fan of cryptocurrencies for personal use, but I absolutely think they're going to take over the world when it comes to the money used in investment finance (which is ~99% of the money on Earth).

<comment><USER9> Why would valuations change and be more realistic if you tax illiquid stock people can't afford to pay taxes on the gains of?

Valuations would be artificially low if that were the case.

<comment><USER10> Not artificially low; the idea is to increase liquidity by tying said currencies to semi-liquid ETC/BTC (or whatever).

Right now, most post-money valuations are artificially high, which has its own set of problems. These companies are being valued as if they had already accomplished their objectives, and it's solely because the lack of liquidity allows (and after several rounds of funding, requires) VCs to obfuscate reality and get big valuations that drive big headlines which become self- reinforcing.

In any case, it's all speculative now, but in 2 years I bet we have this all figured out; and the regulators will probably catch up a few years after Trump is gone. Cryptocurrency has hit the critical inflection point where big banks are building platforms around blockchain. It's not like this stuff isn't already core business for Goldman et al.

<comment><USER12> I fail to see how cryptocurrencies help here at all. The only thing they do is take stuff that could be done by trusted accountants and lawyers and move it to computers. This is useful in the case where you're in a lawless wild west jurisdictionless hacker internet, or if you can't pay lawyer or accountant fees. But these startups can afford accountants and lawyers to set up contracts, and they are in the US jurisdiction so they can sue if the contracts aren't followed.

So what real change do cryptocurrencies bring here?

<comment><USER13> I'm with you. The post you're replying to seems like hype word salad to me. E.g., the big-bank experimentation with blockchains I've seen has nothing to do with cryptocurrency; they're just looking at reliable distributed recordkeeping.

Making stocks more liquid early on is the last things startups want; if they effectively become publicly traded, the SEC is going to push for a great deal of transparency that will be at least expensive and possibly harmful.

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER14> I think the way we do options in startups needs a more fundamental rethink. I wouldn't be too sad if the current system falls on its face.

I like Buffett's proposal from a few years ago. They don't grant stock, they simply pay cash (bonuses) and if employees want to buy in, it's their money, after all.

What's really needed is a way some group of insiders in a company can transfer shares among themselves or outsiders. This would probably take a big change in securities laws to create rules around how unaudited equities could be traded. But I keep seeing these stories about AMT, employees leaving who never vest, golden handcuffs, etc., it makes me think we need to make private company stock work more like public company stock, somehow.

Another thought: Zuckerberg has said a few times he doesn't think going public was as bad as people said it would be. Maybe the solution is for companies to become public earlier and have investors operate more like PIPE shops or activists who just hold big chunks of company stock?

<comment><USER9> That's the point of options though - most of the time that "cash" doesn't exist to be paid out in bonuses. Options are a bet that it will exist in the future.

Why do startups pay lower salaries than Facebook? Because Facebook throws around $200-300k salaries and doesn't care. Startups can't do that, so it promises a piece of the pie if the company becomes big and successful instead.

<comment><USER15> At this point, unless you're C-suite, most startups are a really bad bet compared to the BigCos paying out anywhere from $250K-$1M annually depending on your skill set and experience.

What's happening now IMO is that the hot talent has figured this out and they have accepted positions at Tesla, Salesforce, Google, Facebook, Apple, or Amazon. That said, I know someone who walked away from a $10M package over 4 years to be the CTO of his startup. I wouldn't have, but everyone has to follow their path, right?

<comment><USER9> It all depends. It's certainly hard to compete with a $500k/yr sure thing, but personally I'd rather have a $150k/yr salary with a chance to retire if the company does well than a sure $200k/yr. It just all depends.

Risk-adjusted, the best way to get returns is probably to take an equity-heavy stake at a post-series-B startup with obvious growth and product market fit.

<comment><USER16> I used to feel that way too until I tried it multiple times. All of the startups I've been involved with have been buried or purchased with deals that made my options worthless or effectively worthless (i.e. needing to come up with enough capital to execute the options for such a meager gains that it was hardly worth the effort).

<comment><USER9> On the other hand I know hundreds of people that this kind of equity made millionaires.

</comment></comment></comment></comment></comment></comment><comment><USER17> So we need to split this issue between companies that are public (or otherwise have liquid equity) and those that don't.

For the big companies it's pretty easy. They're largely RSU based. Shares are vested/released. Many companies allow full autosale. Easy. Even in the case of selling enough shares to cover withholding your still left with something very liquid.

Options in public companies are in basically the same boat.

The tricky one is early stages startups.

If you have options that have an exercise price at or over market value then you can take a Rule 83(b) election to defer your entire tax liability til exercise.

If the exercise price is below market then that would mean paying tax on the entire grant even though you may never receive it. Easier option for founders than employees.

Either way it doesn't cover grants along the way.

I do think it's a reasonable complaint to get taxed on something you can't liquidate.

So two things jump out at me:

1\. Issuing RSUs in a non-public company send like a bad idea. Does anyone actually do this?

2\. The vast majority of tax revenue would come from FAMGA shares which are already taxed so what's actually going to be gained by this? Or is executive compensation (ie ISOs) able to get favorable treatment already? This reason sooner makes it seem like a bad idea.

EDIT: an answer to my own question (emphasis added):

[https://www.recode.net/2017/11/12/16640530/uber-peace- deal-r...](https://www.recode.net/2017/11/12/16640530/uber-peace-deal-ready- softbank-tender-offer-proceed-board-billion-dollar-travis-kalanick)

> Under terms of the deal agreed on, those eligible employees with stock > options are capped at selling half their holdings ( _and those with > restricted stock units cannot sell in this round_ ).

So apparently some Uber employees have RSUs and Uber obiously public or liquid.

<comment><USER18> > I do think it's a reasonable complaint to get taxed on something you can't > liquidate.

One way to sidestep this would be to force the taxing authority to take some of the options as payment, rather than cash. You've been granted 100 options at a value of $x each and the tax rate is 20%? Just give them 20 options. That way it doesn't matter what x is or whether the market is liquid!

<comment><USER19> But who would manage this federal portfolio?

<comment><USER18> The IRS would just immediately liquidate the options on the open market. Oh, there is no liquid market! So if the IRS can't do it why should individual startup employees be required to do it?

If the IRS are going to say that 100 options are worth $100x and charge tax based on that then they should be willing to accept 20 options in lieu of $20x.

<comment><USER20> So much this! If they seize a boat for non tax payments, they can auction it; it would be interesting if there were a secondary market of buying shares in startups at an IRS auction.

The fair market value of something is whatever you can sell it for, not what someone says it's worth. Taxing something that can't be converted to tangible value is just wrong. They are basically taxing potential and not reality. They are taxing the egg based on what the resulting chicken might be worth.

</comment></comment></comment></comment></comment><comment><USER21> "The current draft of the Senate Tax Reform Bill would tax stock options and RSUs upon vesting."

Ok. I wouldn't panic here. Calm down.

How shares are vested is up to the board. So, if this were to pass I would just walk into the CEO's office with a few employees and ask to change how shares vest to: "Upon the vesting schedule AND a written letter from the employee requesting vesting. If the letter isn't submitted the shares are not vested." So, if I don't send a letter to the board the shares do not vest. If I want to vest 12 months and leave, I would just submit the letter. Problem solved. How shares are vested is totally made up. You could have them vest when you wear a purple shirt on tuesdays.

<comment><USER22> I doubt that it's that simple. For tax rules, it's likely more about the notion of when the employee has the effective right to it. If the employee has the right to it, via being able to write a letter requesting it, then it's already vested from the perspective of the IRS, regardless of what word games you play.

<comment><USER21> [deleted]

<comment><USER23> I think the law has language about how it's vested unless a substantial amount of additional work required of the employee (e.g. continued employment).

It's like if a company receives a bill for something they bought in 2016, but don't technically pay it until 2017, the bill would still show up in their 2016 reports.

<comment><USER24>
        if a company receives a bill for something they bought
        in 2016, but don't technically pay it until 2017, the
        bill would still show up in their 2016 reports.

Yes if you're using accrual basis, but not if you're using cash basis: [https://en.wikipedia.org/wiki/Basis_of_accounting](https://en.wikipedia.org/wiki/Basis_of_accounting)

(Any big company will be using accrual basis, though.)

</comment></comment></comment></comment></comment><comment><USER25> I don't think I'd ever accept RSUs that I could not instruct my broker to liquidate to cover taxes immediately for. I'd either turn down the offer or require more cash salary instead. I've never worked in a place where RSUs weren't released simultaneously with vesting so that the broker could liquidate them for taxes on the gains realized by the value-at-vesting of the stock (the proceeds of the sale are also taxed).

As that's only applicable to publicly traded companies, I don't think this bill is a good idea. I think the start-up world's use of options and equity is not healthy, but there's a big difference between a person whose options/equity grants are a relatively small fraction of his compensation and true stakeholders/executives who have a significant fraction (often the majority of it) of their compensation in the form of equities. The tax code shouldn't treat these workers the same.

</comment><comment><USER26> This is awful. Now, if your founder/lawyer was kind, you CONVERT the ISO stock to NSO upon leaving the business and increase the excursive window, so they are not NSOs till the employee leaves the business. (NSO tax per vest, ISO tax on exercise)

The way it works in my business is: you have regular ISOs, you vest, you leave, we convert to NSO and give you 8 years to buy them. You're not vesting anymore, so you sidestep the vesting tax associated with NSO, and you pay the cap gain in 8 years. This is the most employee friendly way to structure things as not everyone has liquidity to deal with what they have earned (both buying the grants and the tax associated with buying the grants).

Under the new plan, the rule around NSOs being taxed per vest (remember when you leave you're not vesting anymore) will be applied to all types of employee stock option compensation. That's madness. Personal opinion: On the plus side, maybe salaries will go up and stock grants will go down (imo unhealthy). It will also push more 409a. :\

(Edit- My COO says: julie [11:57 AM] that provision is already being softened in the latest amendment btw)

<comment><USER7> I can suggest another employee-friendly way, which my previous company did for me as a one-time thing, but I would like other companies to learn from and make more common: They allowed me to exercise my options and then, so I could cover the taxes, arranged a sale between me and one of their other investors for a small portion of my shares. It worked out beautifully.

</comment></comment><comment><USER27> I remember reading about a nightmare scenario of earlier Uber employees having to give up hundreds of thousands (or possibly millions) of dollars because of how their options were taxed. It has since changed, I believe, but it used to be that:

Upon leaving the company, they would have 90 days to exercise options. If they'd been there for a couple years during the fast growth phase, it's possible they had (e.g.) $500k in options with a strike price at $10k. Uber prohibited secondary market sales, so if you exercised your options, you had to hold on to them until IPO. However, you;d have to pay taxes on the gains on those vested options _despite being unable to sell them_. Suddenly you were on the hook for $171,500 in taxes ($490k * 35%) plus the $10k to vest as you quit your job -- or else lose out on $318,500 in value on those options. It led to a real golden-handcuffs situation where engineers couldn't really leave without walking away from fortunes.

<comment><USER28> > Upon leaving the company, they would have 90 days to exercise options. If > they'd been there for a couple years during the fast growth phase, it's > possible they had (e.g.) $500k in options with a strike price at $10k. Uber > prohibited secondary market sales, so if you exercised your options, you had > to hold on to them until IPO. However, you;d have to pay taxes on the gains > on those vested options despite being unable to sell them

Unfortunately, this applies to every successful startup that issues options (instead of RSUs). It's not just Uber.

<comment><USER27> The difference is that in most situations you can sell vested options on a secondary market, Uber made it a contractual requirement on vesting that they could not be sold on any secondary market (they could only be sold back to Uber for the strike price).

<comment><USER28> > The difference is that in most situations you can sell vested options on a > secondary market, Uber made it a contractual requirement on vesting that > they could not be sold on any secondary market (they could only be sold back > to Uber for the strike price).

After Facebook learned this lesson the "hard" way[0], that's actually pretty standard. Every startup started within the last 5+ years has this same provision in their options, if you read the fine print, and older companies all amended their option terms for new grants.

[0] hard way for Facebook, not for the employees.

</comment></comment></comment></comment><comment><USER29> This is pretty awful. It would kill the ability for startups to compete with large companies for top talent. There is no way startups can afford the salaries that Google, Facebook, etc. can offer.

It would also break the machine that mints new angel investors. A huge percentage of angel investors are people who got rich off options/stocks in growth companies.

This really seems explicitly anti-entrepreneurship and pro incumbent mega- corp.

Of course it also might have another (possibly unintended and not all bad) side effect: to drive startups out of Silicon Valley and other high salary high cost of living enclaves. A startup _can_ offer very competitive salaries in many other places. Put a startup in Ohio or Michigan and $80-$100k can get you the best talent available on the local market... especially if you also offer much more interesting problems to work on than the enterprise salt mines that tend to dominate IT employment in those places.

<comment><USER30> _It would kill the ability for startups to compete with large companies for top talent._

Not to go on too much of a tangent, but: the fact that companies think they're competing with Facebook and Google for the same tiny pool of people, and that that tiny pool of people is the "top talent", is one of the big problems in our industry.

See things like this article:

[https://danluu.com/programmer-moneyball/](https://danluu.com/programmer- moneyball/)

Or this comment:

[https://news.ycombinator.com/item?id=11290662](https://news.ycombinator.com/item?id=11290662)

</comment></comment><comment><USER31> Idea: the tax code should simply tax startup equity as normal income, at the time of sale, as much as possible. Tax the difference between value at grant time and value at the time of liquidity as ordinary income. Then tax the difference between that price and actual sale price as capital gains, to avoid penalizing employees from holding liquid stock.

Equity in a startup is effectively deferred cash compensation, in practice. It would be good to eliminate the complexities of option valuation, exercise concerns, and taxation issues from the list of worries of regular employees.

<comment><USER32> When does the clock for long-term capital gains start?

Better solution: the US tax code should eliminate the short-term/long-term capital gains distinction and just copy the model used in Canada (and elsewhere, I'm sure): capital gains are taxed as ordinary income at a rate of 50¢ on the dollar. So $2 capital gain is equivalent to $1 of ordinary income. The usual rules apply for day traders and such where their "capital gains" are active rather than passive income. The rate doesn't have to be 50 cents - <USER2> can be 40 or 60.

<comment><USER31> I'd start the clock either at grant time or vest time. After all, that part of your comp is locked up and you're investing your sweat equity in the company.

</comment></comment></comment><comment><USER33> > That should be a clear enough example to the lawmakers that vesting should > not be a taxable event.

Vesting has the unique property that before it occurs the shares are not yours and after it occurs, they clearly are (and can't be clawed back).

If you don't tax vesting, are you going to instead wait until the shares are sold to tax them? That would be _very_ easy to abuse.

> If this provision becomes law, startup and growth tech companies will not be > able to offer equity compensation to their employees.

Nothing stops you from offering it. It's up to the potential employee to accept it, weighing the possible tax liability.

> We will see equity compensation replaced with cash compensation and the > ability to share in the wealth creation at your employer will be taken away.

In the vast majority of cases startup equity isn't worth the paper it's printed on. Paying their employee bonuses with cash would be a net win for their employees. The "losers" in this situation are established companies that arguably are already in a good position to pay out bonuses in cash (or at least include a cash component to cover taxes).

> This has profound implications for those who work in tech companies and > equally profound implications for the competitiveness of the US tech sector.

I really doubt that. The talent pool, networks, and legal infrastructure in the USA are second to none. That's not going to suddenly shift because of minute changes to tax law.

<comment><USER34> > I really doubt that. The talent pool, networks, and legal infrastructure in > the USA are second to none. That's not going to suddenly shift because of > minute changes to tax law.

Working for a startup is already immensely risky. If there was a practically guaranteed bankruptcy risk as a result of appreciating stock options, no sane employee would work for a startup anymore-- they would all go work for the big companies offering liquid stock. That, to me, is a very profound impact on our industry.

<comment><USER35> Or startups could pay, you know, salary + bonus like the rest of the world?

<comment><USER36> That's not the point one of the reasons for Woking at a start up its to make FU money - and big companies also offer stock options not very few FTSE 100 companies don't have share schemes for their employees for example.

<comment><USER32> Actually curious: Why are you talking about British companies in a thread about American taxes?

Or do you happen to be British so you use FTSE 100 as a shorthand for what most Americans would use the S&P 500 for?

<comment><USER36> I was contrasting the experience of share schemes in the UK which are a no brainer with effectively zero tax implications rather than the currently broken system the US has

</comment></comment></comment></comment></comment></comment><comment><USER37> Here's the statement I plan to read to my representatives:

I live in Greenpoint, Brooklyn. I work for a small startup of less than 30 employees.

Three years ago I left a large, publicly traded tech company to take this job, because of the potential I saw in the work the startup was doing.

I took a significant pay cut when I joined the startup, a decision that was justifiable only because of the distant future value of the incentive stock options that the startup promised me.

It is my understanding that the current tax bills on the floors of the house and the senate would tax these options when they first vest, long before I could possibly sell them to cover my tax bill.

If I am wrong about this, I would appreciate any clarification you can provide, ideally written into the text of the bills themselves.

If my understanding is correct, I honestly don't know how my startup, or other small companies like it, will be able to compete with wealthy public tech companies as we try to hire new employees in an already extremely competitive market.

I struggle to understand how draining talent from the most innovative small tech companies can possibly be construed as a good thing for our economy.

Thank you for your time.

<comment><USER38> It may be an interesting exercise to think of how this can be turned "against" you. If you wanted to play armchair politics, you could spin this:

\- Highly paid engineer walked away from a 6 figure salary

\- Takes a job at a small company where he gets equity that could potentially be worth millions.

\- Complains that he may have to pay taxes on a significant portion of his compensation.

Put those together, and you have someone probably still making more than double the national median wage complaining that his favorite tax loophole is being closed. Meanwhile the local plumber / school teacher / single mom is struggling to make ends meet; why shouldn't you pay your fair share so that they can get a tax break?

FWIW, this is just an exercise, I'm not saying this is true. Just something to keep in mind though, that many (most?) of the people on HN are being paid significantly higher than most Americans, and complaining that their stock is being taxed differently isn't going to garner much support.

<comment><USER39> I think the "easy" rebuttal to your third point/counterargument is that's not what's actually happening: you're being forced to pay taxes on vapor. No one is objecting to paying tax when stock is sold; that's normal and reasonable. It's just crazy to expect people to pay taxes on something that cannot be sold.

</comment></comment></comment><comment><USER40> The text of the bill specifically says that it is not intended to apply to statutory options (ISOs).

From page 123:

"However, it is intended that statutory options are not considered nonqualified deferred compensation for purposes of the proposal. An exception is provided for that portion of a plan consisting of a transfer of property described in section 83 (other than nonstatutory stock options), or a trust to which section 402(b) applies, or relating to statutory options under section 422 or 423 for which there is no disqualifying disposition."

<comment><USER41> Do you have a link to the actual bill?

<comment><USER40> Link to the bill with before / after descriptions. Starts at page 116:

[https://www.finance.senate.gov/imo/media/doc/11.9.17%20Chair...](https://www.finance.senate.gov/imo/media/doc/11.9.17%20Chairman's%20Mark.pdf)

</comment></comment></comment><comment><USER34> I'm 90% certain that "taxing stock options upon vest" only refers to non- qualified stock options. ISOs, which the majority of startup tech employees with incentive options get, would not be taxed upon vest.

RSUs and NQOs would fall under the new definition, and holders would be screwed. I just want to make sure we all have our definitions straight.

<comment><USER39> This doesn't really affect RSU vesting much for publicly-traded companies. Under the current regime, RSUs are taxed on delivery; for a publicly-traded company RSUs are usually delivered at vest time.

I don't object to taxing NSOs at vest time all that much; for rank-and-file employees ISOs are the norm, and NSOs are usually for highly-compensated execs whose grants easily pass the ISO per-year vesting cap. They're the kinds of people who are likely to be able to afford these taxes without liquidity, and who are probably able to take advantage of a bunch of other tax loopholes anyway.

The downside there is for companies that give employees more than 90 days after termination to exercise their ISOs (which by law must be converted to NSOs after 90 days)... I imagine that conversion might trigger a taxable event under these new laws.

</comment></comment><comment><USER42> "But, sadly, I don't think this is really about what makes sense. It is about politics."

Clearly this proposal is targeted directly at private SV and tech companies.

And the mortgage deduction and state tax write off proposals are targeted at California / NY.

Outside of just a big FU from the Republicans to largely Democratic states what is the end game?

E.g. - what are the Republicans actually negotiating for, assuming points like the RSUs are proposed as leverage vs real reform?

<comment><USER20> State tax write offs are fundamentally unfair. The US government effectively subsidized high tax states.

A guy making $100k in Texas ought to have the same exact tax federal burden of a guy making $100k in New Jersey. As it stands now, those two guys pay a different amount to the federal government. That is unfair. A state can raise state taxes will little impact on residents however it results in lower tax revenue to the US government and more revenue to the specific state.

High tax states hate giving up that deduction because they would effectively be giving up a subsidy.

<comment><USER43> Don't you have to do more work to make a claim about who is subsidizing who? How much does each state receive in federal grants and aid?

And the guy in Texas has more money in his pocket than the guy in New Jersey no matter what. It's a weird thing to get hung up on. Nobody ever talked about the fairness of this deduction before. This was cooked up as a GOP talking point in some smoke filled room somewhere. Class envy as a Republican tactic is a curious development.

<comment><USER20> Federal grants and aid is a seaparate issue. I'm Ron Swanson when it comes to that. I want a smaller federal government period. State and local governments should have the power.

<comment><USER43> It's not a separate issue if someone is making the charge that he (a taxpayer from a state with no taxes) is subsidizing me (a taxpayer from a state with taxes) - when it could very well be the case that I'm actually still subsidizing him.

</comment></comment></comment></comment></comment><comment><USER23> The problem is taxing illiquid gains. If they are liquid, vesting time is the logical time to tax them.

Conversely, taxing at exercise time doesn't really make sense for illiquid gains and more than vesting time does. People have problems with this now.

The real challenge would be to fix this without creating an incentive to keep gains illiquid when they could be liquid.

</comment><comment><USER44> Is there any chance companies could fairly easily adapt to this? For instance, grant 30% more equity per year than they otherwise would and buy back that 30% as it vests to cover taxes.

Edit: Now that I think about it those numbers don't work because it's an extra cost for the company to buy back your stock. So you end up with fewer shares with this scheme, but the company has also effectively paid off your "golden handcuffs". So in some cases it should even out in the end (you don't pay those taxes in a liquidity event) and in other cases it's actually better for the employee (you can afford to keep more of your equity if you leave before a liquidity event).

</comment><comment><USER45> Republicans don't cut deals with the commons. Their constituents can fit in a moderately sized ball room. Look to who will benefit by these changes and you will find the reason why they are planned.

Incumbents write PAC checks.

</comment><comment><USER46> >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.

I'm not sure what he means with regards to RSUs.

When my RSUs vest, I am taxed on them currently. _And_ I can do whatever I want with them. My employer gives me RSUs with a 4 year vesting period - <USER3> quarter vests every year. And every year a quarter of those stocks are given to me to do whatever I want with them.

Perhaps he was referring to something other than RSUs? Or it is only relevant for private companies (which all startups are)?

<comment><USER47> You can do everything with them if they are publicly traded, if not what are you going to do ? If you're working in a early stage company which can see its valuation goes north (probably one of the reasons you work there instead of google btw) you could try to convince someone to buy some of your stock each month to pay for these vested shares you just get ?

</comment></comment><comment><USER48> I've had a similar tax issue which caused a few 100k in taxes on unrealized gains. That was not a happy day and I could barely pay the tax bill. In my case the issue involved moving from The Netherlands to the US. As far as I know the US is one of the only countries which taxes unrealized gains. In The Netherlands you only get taxed once you actually make the money. The VC industry is world class here in the US, but some of these tax rules are so backwards that they do real damage to startups and the economy as a whole.

<comment><USER49> There is a provision in the House version of the tax bill to not tax the exercising of options until there is a liquidity event. In that case you wouldn't be taxed on the unrealized gain until you could sell the stock.

I still think with options it should be as you've pointed out a tax-free event until you actually sell the equity for cash.

</comment></comment><comment><USER50> A friendly reminder that it's VC's like Fred Wilson who insist on provisions in option grants that require exercise within 90 days of leaving a company.

<comment><USER28> > A friendly reminder that it's VC's like Fred Wilson who insist on provisions > in option grants that require exercise within 90 days of leaving a company.

Well, except that the IRS also has a say in this as well. The IRS won't let companies issue ISOs with no expiration date like that; if the company tries, they'll be treated as NSOs for tax reasons, which defeats the whole point.

There was actually a bill last year that would have fixed this specific situation (taxation of ISOs for startup employees in a way that doesn't expire 3 months after termination), but the Senate _Democrats_ blocked it, because they branded it as a "tax cut for the wealthy".

<comment><USER39> > if the company tries, they'll be treated as NSOs for tax reasons, which > defeats the whole point.

How does that defeat the whole point? The entire point of ISOs is that you can exercise without being taxed immediately. After leaving a company, I would much rather have NSOs that I can hold onto, unexercised, until after a liquidity event when the alternative is having nothing.

(I mean, really, though, overall the need for ISOs is ridiculous: the US is insane for taxing unrealized gains in the first place.)

<comment><USER28> > How does that defeat the whole point? The entire point of ISOs is that you > can exercise without being taxed immediately.

Not exactly - you're still taxed, but only via AMT, not regular income tax.

> After leaving a company, I would much rather have NSOs that I can hold onto, > unexercised, until after a liquidity event when the alternative is having > nothing.

Sure, but that's not really an option either. NSOs _also_ expire (and again, the requirement for having an expiration comes from the IRS). So if the liquidity event takes too long to happen, you might still end up with nothing. There are a number of companies that are already bumping against this problem.

> (I mean, really, though, overall the need for ISOs is ridiculous: the US is > insane for taxing unrealized gains in the first place.)

That's not what's happening. ISOs exist in order to allow companies to provide shares to employees _below_ market rate at the day they vest. The difference between market rate and the actual rate paid is taxable, because that _does_ represent a gain realized.

This is only a problem for companies that expect to grow rapidly (ie: startups). If the growth rate is low, the spread isn't large enough to hit the thresholds to be taxed - or, if it is, not large enough for those taxes to be burdensome. But since startups plan to grow very rapidly, everyone (from founders and early employees to late-stage-but-pre-IPO employees) get the short end of the stick.

<comment><USER39> > Not exactly - you're still taxed, but only via AMT, not regular income tax.

Well, sure, but that's not always the case, and I don't consider that regular taxation. (I'm well aware of AMT rules, having been subject to paying AMT the past two years due to this exact issue.)

> NSOs also expire (and again, the requirement for having an expiration comes > from the IRS).

So what? I'd rather have an NSO that expires many years down the line (a figure I see from a lot of companies that do that conversion is 7 years, which is usually plenty) than nothing.

> That's not what's happening. ISOs exist in order to allow companies to > provide shares to employees below market rate at the day they vest. The > difference between market rate and the actual rate paid is taxable, because > that does represent a gain realized.

Not sure what you mean. NSOs behave in the same way wrt to what the company can offer, and as to what's taxable; ISOs just allow you to defer that taxation until sale (aside from the aforementioned AMT annoyance), and also (assuming you make a qualified disposition) treat the entirety of the gain from the strike price as a long-term capital gain. (See [https://www.theventurealley.com/2016/10/isos-vs- nsos/](https://www.theventurealley.com/2016/10/isos-vs-nsos/))

</comment></comment></comment></comment></comment><comment><USER51> One thing I don't get though is how eventually it has "profound implications for the competitiveness of the US tech sector". If the employees now wouldn't want to be compensated with options because of the tax, can't they be compensated in some other form, e.g. cash? Eventually isn't it still the company and the employee that negotiate the compensation scheme, and essentially the company's decision how much to pay?

The most obvious thing that I can currently think of is just that maybe the startup just doesn't have that much cash in the initial stage, so raising wages to even higher would just bankrupt it, while options is something that would only cost the company money if ever it actually succeeds, thus it can afford to give options away. If one thinks of it in that way then maybe it would make slightly more sense?

</comment><comment><USER52> Can someone explain how the taxable amount would be calculated if the company isn't listed on the stock market. My options are for value x per share. I would expect to pay taxes for y - x with y being the market value. How does the actual market value get established? Will that number just come from what was used when someone invested previously?

<comment><USER53> Fair Market Value determined by a 409a valuation.

<comment><USER54> Interesting side note. This proposed legislation actually completely removes section 409A from the tax code and replaces some parts of it. I'm not sure if the rules around company valuation will change dramatically but it seems that they won't be called 409A valuations anymore if this passes:

[http://bakerxchange.com/rv/ff0034eed7a7d447f644f491d94caddcb...](http://bakerxchange.com/rv/ff0034eed7a7d447f644f491d94caddcbfd115c7)

</comment></comment></comment><comment><USER55> "And that would be the end of equity compensation in startups as we know it."

Good. This entire industry is a lottery. We all laughed at the slot machines in the hospital in the movie "Idiocracy". "You could win free health-care!" And yet we're all hoping to win a life of luxury on the start-up lottery.

</comment><comment><USER54> Here is a more detailed analysis of these parts of the proposed tax bill: [http://bakerxchange.com/rv/ff0034eed7a7d447f644f491d94caddcb...](http://bakerxchange.com/rv/ff0034eed7a7d447f644f491d94caddcbfd115c7)

</comment><comment><USER56> Startup Options are already broken-- no liquidity, terrible employee hostile terms (eg: 1 year cliff, losing 90 days after leaving unless you come up with $xx,xxx to exercise options for a stock that won'e be liquid for 5 or more years, etc.) and on top of that the distribution is usually highly weighted towards MBAs to the detriment of the engineers who actually build the product.

So a new model has emerged: cryptocurrency tokens. While ICOs are often scammy, for startups whose business model fits in the form of a currency, this is a better way to reward employees. Liquidity and actual ownership rights... and "vesting" is easy-- just issue them a fixed number per month.

</comment><comment><USER57> Surely if you have options or stock in an illiquid company where you can't sell it - they are worth zero on a mark-to-market basis, so you dont need to pay tax on it?

If you can easily sell them for a price it makes sense that you pay tax on it.

<comment><USER58> If only life were that logical. Under the rules as they are today, there are many scenarios where illiquid options/stock have a taxable event. People's finances have been ruined by this. I had a friend lose a house when he sold his company for stock.

</comment></comment><comment><USER59> I don't quite follow how this is different. When I got rsu's at my former company they sold a bunch at every vest date to pay for taxes. Isn't that the same as what they're talking about here?

<comment><USER34> Was your company publicly traded? The OP is referring to issues when the stock is illiquid.

</comment></comment><comment><USER60> What happens when your vesting options are underwater?

Do you get to claim them against your taxes?

If so, given the rate of startup _failures_ , this may be of net benefit to most startup employees.

<comment><USER39> It's fairly uncommon that your options will be under water when they _vest_ , even in a startup that eventually fails. The more common -- and more crappy scenario should this law pass -- is getting taxed on a paper gain, and then _later_ the price drops below the tax basis due to a down-round or something else bad.

</comment></comment><comment><USER61> Fortunately I am tax resident in a country where I will pay taxes on my stock (options) no sooner (actually up to a year later) than when I make money off them with a simple CGT tax. Taxing options before they are exercised and before people made actual dollars off them is just crazy. Unless you are a founder, stock options is just a nice lottery ticket on top of your salary.

</comment><comment><USER62> Fenwick also had some more information about the bill: [https://www.fenwick.com/publications/Pages/Proposed-Tax- Refo...](https://www.fenwick.com/publications/Pages/Proposed-Tax-Reform-Bill- Stands-to-Significantly-Impact-Equity-and-Performance-Based-Compensation.aspx)

</comment><comment><USER63> Lol. if this bill passes I am resigning from the current startup and joining Google or Facebook. This is idiotic.

<comment><USER48> Yes, as a startup founder I'm quite worried about that exact effect.

</comment></comment><comment><USER64> I'm a little confused about the mechanism here because the author doesn't explain what's going on or how, or cite any sources. I thought RSUs were already taxable immediately upon vesting. But admittedly I'm not deep into Valley compensation culture. What's changing here?

</comment><comment><USER65> Serious question here. My impression is that Silicon Valley leans heavily liberal, and as such most people there believe in a progressive tax structure and generally lean towards wanting the government to receive more revenue than conservatives. If my impression is wrong, then please correct me.

With this in-mind, why is there such outrage about taxing option and RSU income? It's still income. And the current situation could not be described as anything but a tax break for the "wealthy," at least insofar as Obama liked to define people as wealthy. It's an asset that you receive in connection with your labor. It's income. And you don't have to pay income tax on it (iirc, it's mostly cap gains when exercised). And it's mostly given to people who already make $150k+ a year anyway.

I cannot reconcile this outrage over still having a tax dodge (but not as good of one) with the political leanings of SV.

<comment><USER66> It's not income if you never exercise the option.

Imagine starting as a senior-level manager at a company that's a few years into its life. They provide you with a salary of $150k/year and 100,000 options at $1 with a standard four-year vesting schedule. In the first year, the company's fair market value increases to $2/share. Your tax liability just increased as though you made an extra $25k, so you'll need to come up with ~$8k to cover.

If the company sees its value increase 2x per year for all four years, you'll be on the hook for taxes on $675k having only made $600k in actual dollars. Good luck scraping together taxes to cover adjusted income of $525k in year 4 if the company doesn't go public.

If the fair market value falls after you vest but before a liquidity event, you never saw a penny of extra liquid assets but still had to pay tens or hundreds of thousands in taxes.

This will bankrupt people.

<comment><USER65> That sounds no less fair than someone who bought a home for $100k in 1980 who's seen its value appreciate to $5mm, and now has to pay $50k a year in property tax.

That sounds no less fair than a family liquidating its estate because they can't afford the estate taxes.

That sounds no less fair than a health-conscious person taking care to never drink or do drugs paying 10x more for socialized healthcare to pay for the ailments of an obese alcoholic.

I doubt I need to go on, but the point is that taxation sucks. And it's completely hypocritical of someone to want to levy these burdens onto someone else while they themselves become indignant over a tax loophole of theirs being tightened (not even closed). It's even worse that the people who are getting indignant over it are some of the wealthiest in the United States, while at the same time, you want to stick a guy who earns $50k a year with an extra $3k with the ACA.

I do admit that the story you provided sounds like it sucks more than average, but in reality, a bank will just give you a loan to cover the taxes. No one is going bankrupt. And if the shares end up going to zero, you get to have capital carryover losses just like everyone else whose investments lost money.

But the point is that taxes, when you actually have to get down to it, suck. And if you're being truly democratic, you should try to empathize with all taxpayers in the same way that you think about your own taxes.

<comment><USER67> You can sell a home to cover property taxes, or even reverse mortgage to get the cash flow. You can't sell private company stock, you can't even encumber it with a lien.

</comment></comment></comment></comment><comment><USER68> There are various ways of getting around this tax even if the plan passes:

\- Provide compensation through LLC membership units which vest but have no value at the time of grant. \- Allow early exercise of options when the spread is zero.

</comment><comment><USER69> This should be dead simple. You put 30% of the options in an IRS account. The IRS either sells them at auction or lets you buy them back at cash value when you exercise the options.

There should be no liquidity crunch.

</comment><comment><USER70> All a bit moot since companies aren't going public anymore, no? ;)

</comment><comment><USER71> My RSUs have always been taxed on vest -- what am I missing?

<comment><USER34> Is your company publicly traded? The OP is referring to issues when the stock is illiquid.

<comment><USER71> Yes it is publicly traded. So, how does it work with privately traded companies. Talking about RSUs, not options. What is the difference between "release of the underlying shares" and "vest" ?

<comment><USER34> The proposal is that the employee will have to pay tax on RSUs upon vest, even though the underlying assets cannot be sold. For example:

Employee A has 40,000 shares of stock granted upon hire, vesting 25% per year. So on year 1, they vest and have to pay taxes on 10,000 shares. Say those shares are valued at $25 per share. In a public company, you could just sell $25 of those shares and be left with 7,500 shares. At the private company, under the new rules, you'll have 10,000 shares that you cannot sell, but still be liable for paying tax on $250,000.

Those shares may never be liquid, and this rule can and will bankrupt people.

</comment></comment></comment></comment><comment><USER72> Just used ResistBot.io (full disclosure, a friend's business) to message my representatives about this.

May not be as effective as calling - but certainly quick/easy.

</comment><comment><USER73> Isn't this a change that makes the tax code fairer? It seems like options and RSUs have value associated with them. At the very least, the person who is receiving them considers them to have value. Stock options are traded on markets, and priced some how.

Part of the new tax plan seems to be trying to lower the tax brackets, in exchange for preventing people from avoiding taxes. That's why it seems to be doing things like taxing these options and the free food some companies supply their employees.

It isn't clear why income shouldn't be taxed just because it's supplied in a different way.

<comment><USER47> Options and RSUs gain value the day you pay for the underlying stocks, not the day you're allowed to buy a stock which could later in time become worthless. don't forget they're aimed at employees so they can share the value created by the company they work within, and that these employees will pay taxes in time when they extract any value from their companies

<comment><USER65> If they don't have any value, then you shouldn't have any problem with them going away. You obviously consider them valuable, or else you wouldn't be defending them.

<comment><USER47> Indeed the right to buy a stock is valuable, but as an employee / the state you should postpone the taxation to when the value is actually retrieved by the person you tax. It's a bit like saying 'You're house is worth X, you should be taxed regarding this price, even if you don't have yet made any profit'

<comment><USER65> You literally described property taxes just now.

</comment></comment></comment></comment></comment><comment><USER74> What does it mean for an RSU to "vest"? My understanding of RSUs is that it means the company will give you some shares if you still work there at some specified date. Vesting is a stock option concept - the time at which you can choose whether or not to sell some of the granted shares. Which means that you can sell some shares to pay your taxes when the shares vest.

Is the current proposal meant to tax the RSUs when you are told you will be getting them?

<comment><USER75> My RSUs vest at the latter of the time-based condition (schedule) and performance-based condition (company liquidity event). The proposal is to make this taxable income purely at the time-based condition, when they may still be illiquid.

</comment></comment><comment><USER76> Wasn't part of the original tax reform to repeal AMT? Was that lost in the Congressional aisle?

<comment><USER39> A potential AMT repeal is orthogonal to this change.

</comment></comment><comment><USER43> Anyone know exactly what "Performance Units" are, and if they would fall under this?

</comment><comment><USER12> Aren't RSUs already taxed upon vesting? How does this change anything for RSUs?

<comment><USER77> My reading is, this change won't affect RSUs those can be traded in public market. It will, however, have huge impact on paper money, because you are taxed in advance, and the return might be zero.

<comment><USER12> But my understanding is that RSUs are always taxed in advance (at vest time). So there's no change in behavior whatsoever with regard to RSUs.

</comment></comment></comment><comment><USER78> As a startup employee, I love this rule as this can help CEOs to go public sooner than later. Today VCs are the capitalist who take away all the growth of a tech stock till series's D and then public pays a premium. If this rule leads startups to go public at 100Mish range instead of 2-10b, this could be great.

</comment><comment><USER53> Wow and I thought removing AMT was throwing folks with ISOs a bone.

</comment><comment><USER79> if this passes (doubtful) do you all think we will see a massive surge in secondary market platforms ?</comment>


Trouble with Tesla: Couple sold damaged car but told they can't sue - <AUTHOR> https://chicago.suntimes.com/2019/9/27/20887609/tesla-arbitration-car-damage-repair-consumer-legal-chicago-kansas <comment><USER2> Good article. Mandatory binding arbitration is something that has been long past due for being made illegal. It also shows very clearly the falicy of "if you don't like it go somewhere else". When nearly every company is doing this, their power to shape the market is evident.

While market forces are in place and proactive consumers could help shape this, their influence is asymmetric. They have limited time, do not have resources to dedicate to learning about these issues and pushing for changes or switching to only buying from companies without these clauses. This is where collective resources, taxes, should be spent in looking out for the greater good of the economy and citizens through regulations. Regulations being laws and enforcement of those laws that ensure fairness and minimize fraud.

Making money selling cars that are "new * " ( * now maybe with cosmetic or mechanical damage) is an erosion of quality of goods that benefit companies and not consumers. Over time and in net effects it hurts the economy as you also have less transparency - people now hesitate to buy goods or take longer to buy goods because they're not sure of quality that they might receive. In this example it's a car, but it could also very well be food, drugs or any other more essential item. Their time is spent further evaluating the items they need to buy rather than reading to their kids at night, spending mental energy on taking night classes to gain more skills, or simply contributing to the economy through their work.

</comment><comment><USER3> If you're willing to spend half an hour digging into problems, you'll easily discover that Tesla is inundated with quality issues and people bickering with the company to get warranty work or have the company honour their returns.

Of course, some people are convinced it's all a giant conspiracy against Tesla. Ironic, really.

</comment><comment><USER4> In my view, there is no situation in which binding arbitration should be an enforceable term in any kind of consumer agreement. In fact, I'm struggling to think of any situation where it would be applicable for any other agreement either, outside of international treaties. What's the legitimate case for these terms?

<comment><USER5> Exactly, arbitration can be the starting point but making it the only possible action is just crazy and MUST be illegal

Furthermore, it is bad business to hide behind any clause, period. They could just call them, tell them that there was a minor accident and that they can have the car with 5% discount. I'm pretty sure if they didn't agree there would be plenty more people buying the car with such a discount and a fixed fender bender damage

</comment></comment><comment><USER6> Why is arbitration even a thing? What's the point of laws and regulations if you can opt-out of them by requiring arbitration?</comment>


Sean Parker's Wedding Defense - <AUTHOR> http://mashable.com/2013/06/06/sean-parker-wedding-defense/ <comment><USER2> Is asking the subject of an article for comment _before_ ripping them to shreds just a lost art at this point?

<comment><USER3> I agree it was bad form of the author, but in all fairness the original piece was a very casual editorial and not serious reporting. In objective reporting the standard is to cover all sides of a story, but in editorials it's to spout off your opinion - often with little regard for the truth.

My point is don't trust everything you read, always question the source and intention. A lot of us HNers were also guilty of passing on the blame: <https://news.ycombinator.com/item?id=5824276>

One more thing: we've now heard two sides of the story (an editorial covering the CCC report and Sean Parker). Keep in mind that we don't know what actually happened yet.

<comment><USER4>
        but in all fairness the original piece was a very casual editorial and not serious reporting

Seems like a cop out. Forget journalistic integrity, what about human integrity? If you're going to hold up someone and say "this guy did something wrong!" then you should have your facts straight. If you don't want to be taken seriously, the first line of your article should be "I didn't bother to check all the facts".

I agree that (as a community) we should be more skeptical of stuff posted online. But that doesn't excuse the author and its neither necessary nor wise to defend him/her.

</comment></comment></comment><comment><USER5> This is an excellent defense. Having a $4.5 million dollar wedding may be jerky, but better he spend the money than hoard it; unemployment is high. Sounds like a badly maintained and forgotten site is going to end up improved due to a billionaire's urge to create a magical fairy garden for a day.

Hope this gets upvoted enough to salvage people's views on this incident.

<comment><USER6> The "hoarding" argument has no economic basis. Money that is saved in stocks, bonds, or bank accounts is immediately put to use by companies, banks, or governments.

<comment><USER7> > Money that is saved in stocks, bonds, or bank accounts is immediately put to > use by companies, banks, or governments.

Oh is it? really?

In the real world (not the fantasy land of trickle-down economics), money that is saved in stocks, bonds and bank accounts is NOT immediately put to use by companies, banks or governments.

Banks have done a terrible job putting the money given to them by the government and the Federal Reserve to work. Small business lending dried up and has taken years to recover, despite all the efforts to convince banks to do otherwise.

The government did a notoriously bad job of putting the stimulus spending money to work.

As for businesses, hiring has been slow, wages stagnant and investment weak for years, despite an excess of cash (profits).

Almost nothing has been done to stimulate demand, much has been done to stimulate supply.

So, arguments about "hoarding" have not only economic basis, they have a basis in fact as well.

Granted, on those grounds, Sean Parker should be lauded for putting some of his money to work.

<comment><USER8> >not the fantasy land of trickle-down economics

The war on straw wages on

</comment></comment></comment></comment><comment><USER9> We are reading/talking about Sean Parker's wedding in the tech press and discussion forums.

I guess we can admit we're a fashion industry now.

<comment><USER10> What do you mean by "a fashion industry?"

<comment><USER11> one that's dominated by fads and gossip

larry ellison has an interesting take on this

<http://www.youtube.com/watch?v=0FacYAI6DY0>

<comment><USER10> I don't respect Larry Ellison. Sorry.

</comment></comment></comment></comment><comment><USER12> It would not be the first case where a environment related government agency went overboard when the end result for the area was better than what the same agency had been ignoring for years or simply did not know about. Read more than one wetlands issue where this occurred.

</comment><comment><USER13> Funny how most things that make you mad are less outrageous when you hear both sides of the story.

</comment><comment><USER14> Kudos to the author for giving him a chance to respond and airing his response fairly.

<comment><USER15> I wonder if that hn poster who thought Parker was lucky we don't have the death penalty for his horrific crime against nature will be around to post on this thread.

<comment><USER16> We can't let this end without someone getting the noose. I nominate the hack journalist/blogger making the accusations in the first place. Failing that, we can hang the guy that asked for the death penalty. A little poetic justice would go a long way to making online discussions civil again. :)

<comment><USER17> How about, from now on, nobody ever gets the death penalty and we stop wishing for people to die? I'd like that.

<comment><USER16> No, no, dear sir. The people must have their entertainment. Thank you kindly for volunteering to be the third candidate in our contest. ;)

<comment><USER17> The Hunger Games, bah humbug.

<comment><USER16> I was thinking a bit more Roman Empire but yeah, that works. Bah humbug indeed. :)

<comment><USER18> It's pretty transparently the same thing.

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER19> The author quoted the CCC's report and at first this seems enough. Why would anyone be upset that someone else, specially someone "known" to love the redwoods be upset that he/she spent so much money "fixing" the place for all of us? Idk, this all just seems like drama now.

</comment><comment><USER20> Can we have Erlang day again?

<comment><USER21> Sure, start submitting and upvoting Erlang posts. I just submitted three, they're near the top of /newest now...

</comment></comment><comment><USER22> Wish he spent more time on meaningful work instead of retorting inflammatory web postings.

He could have done two things in far shorter time. 1) Debunked the original article 2) Used the space to evangelize to others (while echoing the original article's author's views).

Too many words for HN over any private wedding. If I wanted ceremony, I'd be writing STL.

</comment><comment><USER23> Is that my [hacking] business?</comment>


Obamacare's impact on our startup and what to do to avoid rate hikes - <AUTHOR> http://www.distilnetworks.com/lesson-learned-obamacares-impact-startup-avoid-rate-hikes/

<comment><USER2> Not to the OP, but if the author or someone from distilnetworks.com reads this: you probably shouldn't have a customer service bot proactively try and chat with people who are just reading your blog.

<comment><USER3> I really appreciate the note. It is an actual person, not a bot that chats with each user but I actually agree with your perspective. It can be seen as intrusive. As the CEO, I'm making the executive decision to take the chat feature off the blog today. Thanks for helping improve our user experience!

<comment><USER4> I'm very glad you're making the executive decision as the CEO to remove the chat feature off the blog as opposed to just doing it.

<comment><USER3> Hah. Its not that simple to just pull off. The js code snippet is part of the theme and so we have to restructure several things to selectively place it on certain pages and not others. As a developer I hate having interrupts come in so I dont do that to my guys. We put it in the queue, it'll get done this week.

</comment></comment></comment></comment><comment><USER5> I was under the impression you were exempt if you have under 50 employees. I don't know how this effects traditional startups.

<comment><USER6> I think staying under 50 employees means you are exempt from being forced to offer insurance to full time employees (those with over 30 hours a week and/or salaried.) However, if you are offering health insurance - and most startups would be, then you are affected by the changes to private insurance.

<comment><USER3> Thats exactly right. ACA doesnt force you to offer insurance, but if you do your rates are likely to go up as a startup.

<comment><USER7> * If you're a startup that mostly employs 20-something males.

It's nothing to do with being a startup and everything to do with demographics.

Additionally, for really small startups that don't have a giant pile of capital or enough people for a group plan, the healthcare exchanges make insurance "possible" instead of "better hope you're married and the spouse can do family plan".

</comment></comment></comment></comment><comment><USER8> Yes, if you are on the younger end of the spectrum, your premiums are likely to go up. If you are on the older end of the spectrum your premiums are likely to go down, or at least, you're now able to afford insurance. If you own a company in an industry that employs people on the younger end of the spectrum, yes, you might be paying a bit more so that your employees can afford healthcare in their later years. Previously your costs were artificially low.

</comment><comment><USER9> "Now, you can still do some of those tricks, but not as extensively." The language in this blog post make it pretty clear that this isn't a company you want to work for. Stop trying to nickel and dime your employees. Provide good affordable health care for everyone from the CEO down to the cleaner. Be a socially responsible entity. Make that one of the pillars of your business. Success without it isn't success at all.

<comment><USER10> I didn't get that at all. I think you're bringing some bias to it - I can't wrap my head around how else you would have come away with that sentiment. Either that or you didn't really read it. Let me do the whole paragraph:

 _In the past, you could sometimes defer some of your healthcare costs by offering only high-deductible plans. You could offer policy choices with higher copays. You could even incentivize employees to drop coverage altogether._

Is any of that untrue, or bad for a company to do? Absolutely not. If I say to an employee, "Which would you rather have - a $70,000 salary with a $5,000 deductible health plan, or a $60,000 salary with a no deductible plan?", which one will they choose? Hell if I know in advance - that's up to each employee. I've offered them the same basic thing and let them choose what fits them the best. I fail to see how that's "bad".

Get off your high horse.

</comment></comment><comment><USER11> After historically being handcuffed with limited options, it's good to see small companies taking a proactive approach to an evolving health insurance marketplace.</comment>


Interactive night walk in Marseille - <AUTHOR> http://promenadenocturne.withgoogle.com/

<comment><USER2> Combine this with the Oculus VR and some scenting technology and you've got 3/5 senses involved in visiting a place. The only remaining senses to be covered will be touch and taste. Boy is it a good time to be alive !</comment>


Ask HN: If YouTube was founded in 2012 instead of 2005, how would it differ? - <AUTHOR>

YouTube has always been notorious as a business for how expensive it was to run the service. Streaming video is extremely bandwidth intensive. That, along with uploading and huge traffic, means that YouTube's costs have always been high, which is most likely something that factored into the decision to sell to Google.
I assume these issues were even worse/more expensive in 2005 when YT was founded. My question is this:
In 2012, there many more services available to developers such as Amazon's S3, EC2, Heroku and Akamai. In an alternate universe where YouTube was founded in 2012, can you give me a prediction of how YouTube as a business would differ? <comment><USER2> Were their costs that high? You might want to see what sort of deal they had with ServerBeach back in the day. Considering that SB didn't even have bandwidth monitoring, never mind billing, at some point, how bad could it have been?

If they were doing it today, there's no way they'd ever find an unmetered pipe to the outside world. People know that video over the web is feasible now, and that means bandwidth is treated differently.

</comment><comment><USER3> Their comments would be full of kindness and mutual respect.

</comment><comment><USER4> It would be much more mobile centric; think a video Instagram.

<comment><USER5> I agree

</comment></comment><comment><USER6> More widespread use of HTML 5.</comment>


No, Dropbox is not stealing your files - <AUTHOR> https://medium.com/@razvanh/no-dropbox-is-not-stealing-your-files-24ecd443b5ac

<comment><USER2> Thank you. Goes to show that even technical people can misunderstand how tech works and assumes the worst. We definitely live in a post-Snowden world.

</comment><comment><USER3> The conclusion should be that it's poor UI/UX design. If it has nothing to say about a file, because it's not under it's management, then it shouldn't have added any visual indicator green or blue.

<comment><AUTHOR> That's exactly how it works. For files which are not part of the Dropbox folder it adds no visual indicator.

</comment></comment><comment><USER4> Nice analysis.</comment>


Mutable Suggestions For Naming A Startup - <AUTHOR> http://onstartups.com/tabid/3339/bid/17702/17-Mutable-Suggestions-For-Naming-A-Startup.aspx

<comment><USER2> Do you think a .com domain is absolutely necessary? I spent hours yesterday trying every possible combination of words to find an available .com with no luck.

Finally I said screw it and registered a one word .io domain that describes my product perfectly, as well as the [word]io.com domain. I hate to be too trendy, do you think users could learn to use a .io domain?

<comment><USER3> The general (US) population does not understand anything other than .com.

<comment><USER2> I feel that unless you snag a .com that's your exact name, you're screwed either way.

I ended up with [word].io, but I was deciding between that and [word][obscure animal].com . I think I made the right choice.

Fortunately, most of the traffic to my site will be from links and not casual mentions/word of mouth, so the tld shouldn't be a big problem.

</comment></comment></comment><comment><USER4> Good ideas! I just grabbed the Twitter account and Facebook page for my latest project. I hadn't thought of those.

Finding a domain that's available at any price seems harder to do these days. Squatters are just sitting now, waiting it out or waiting for a crazy offer they can't refuse.

</comment><comment><USER5> Pretty awesome tips. I don't necessarily agree with the uppercase suggestion, though. If you strip the color from Google's logo the font isn't as identifiable as Twitter or Facebook (both of which are lowercase) so the combination of colors and capitalization of the first letter makes it stand out. Amazon's logo is all lowercase so I don't know if his example is 100% accurate.

The logo I made for Joystickers is all in lowercase precisely because it stands out. Had I used a capital J, it would have looked pretty plain. The lowercase j along with some GIMP magic make it a little more interesting.

<comment><USER6> I was actually not thinking about capitalization in the logo (which I'm fine with either way), but about the actual name as it's used in written form.

Amazon, Google and Facebook all use an upper-case letter to start their "official" name (if you see it in text anywhere).

<comment><USER5> Ahh, I see - good point. I misunderstood.

</comment></comment></comment><comment><USER7> These are mostly good suggestions, but 8-10 seem a little trendy, especially the reasoning behind #10. I really doubt people will even be using Twitter in ten years; picking a shorter name for your company because it'll be easier for people to RT your links just smacks of social media bubble.

<comment><USER6> That's a fair point.

But, there are reasons other than twitter for shorter being better.

</comment></comment><comment><USER8> Great tips! I definitely agree that domain registration is a flawed system and cyber squatting is annoying.

I believe that a name is very important. It is how people identify with your business. If it is difficult to remember your business will have a hard time capturing that very valuable "word of mouth".

I would always suggest putting the money into trademarking your name because then you have a leg to stand on if you want to go after someone sitting on your useful domain.

</comment><comment><USER9> These are good common sense tips. I think that my project Any New Books? (<http://anynewbooks.com>) scores pretty well on most of these points. What do you guys think? The question mark pisses me off at times, for example when it comes to using the site name in possessive form (e.g., Any New Books?' Blog), but overall I think its inclusion adds something to the name of the site.

<comment><USER3> I like ANB :)

</comment></comment><comment><USER10> 'Also, stay away from clever domain names like del.icio.us.'

But, as the author states, the Libyan domain names are in vogue now: bit.ly, letter.ly, etc.

<comment><USER11> Forget the clever domain tricks, even just naming your company "craply" in the first place makes me get a little stabby. -ly, -ify, and any other clever lingual arrangements are going to be out of fashion in short order and you'll be the oh-so-trendy company with the lame name. My only consolation is that these companies will burn out as quickly as they arrive.

OK, that was quite bitter. For some reason I have a perhaps unusual emotional response to certain patterns of syllables, like a useless sort of synesthesia.

<comment><USER6> Absolute.ly :)

</comment></comment></comment><comment><USER12> There are actually 18.... I'm sorry, that was uncalled for.</comment>


'Linux of online learning': edX and Stanford build open source platform - <AUTHOR> http://gigaom.com/2013/04/02/linux-of-online-learning-gets-stronger-edx-and-stanford-team-up-to-build-open-source-platform/

<comment><USER2> I know "X for Y" descriptions can be useful shorthand, but "Linux of online learning"? Really?

I know many HNers groaned at yesterday's Morozov essay, but we might do well for ourselves if we take some of the buzzwords back a notch or two. It would go a long way towards preserving the meaning and significance of important words. If anything that is "open" can be "the Linux of something," then what is Linux?

<comment><USER3> Apart from being very prone to cliche, the problem with "X for Y" is that it's got so much potential to be indulgent.

"Linux of online learning" might convey meaning like "platform," "open," :big ecosystem" and "you can build a brand on top of it." But, it sounds like they are saying "Awesome & incredibly successful platform for learning."

That said, I still don't think it's meaningless, though I don't know how much conviction the people saying it have. Think of the different connotations you get if you replace linux with Windows or iOS.

Like mission statements or any other form of cliche it's bullshit & self indulgent 90% of the time. But if it's done with conviction, it can have (useful) meaning.

<comment><USER2> If you're wrong, what good is conviction? I'd think that's even more dangerous. It's easy to call out the cynics who misappropriate and obfuscate words for their own gain. It's scarier when people earnestly see nothing wrong with _anything_ open being "a Linux."

Morozov bemoaned the overuse of "open." Now we take that a step further. Anything that meets the already-loose standards for being "open" can also be "a Linux." Is there any workable standard with which to limit this indulgence? Hopefully it's somewhere between a "Twilio for photos" and a realtor holding a "Linux house" for prospective home buyers.

</comment></comment></comment><comment><USER4> Has anyone actually seen the source code for edx? They claimed that they would release it. I don't see a repository on Github or anywhere else.

<comment><USER5> There's also this press release talking about the release of XBlock SDK: <https://www.edx.org/press/xblock_announcement>

</comment></comment><comment><USER6> There are a fair number of these open source learning management systems. A small list is here: [http://en.wikipedia.org/wiki/List_of_learning_management_sys...](http://en.wikipedia.org/wiki/List_of_learning_management_systems)

How is this different from any of these?

<comment><USER2> It looks like we have a lot of different "Linuxes for online learning." Perhaps we should peg different open source LMSs to particular distros. Since edX and Stanford's system seems to be destined to be the most popular and user-friendly, we should from now on call it the "Ubuntu for online learning." Further, I suggest Wikipedia be called the "Arch Linux of online learning." Traditional colleges and universities can be called the "Drupal of online learning."

</comment></comment><comment><USER7> Hm, I wonder why they didn't check out instructure.

<https://github.com/instructure/canvas-lms>

It's open source, and there's a paid arm of it for universities to outsource their IT needs.

<comment><USER8> Canvas is way more of an LMS (Learning Management System), than a learning platform. My only experience is with MITx, which has a very different goal than an LMS.

</comment></comment><comment><USER9> This is surely going to screw over Udacity and Coursera.

<comment><USER10> I personally hate the set time-frame of edx and Coursera and much prefer Udacity

</comment></comment><comment><USER3> I'd like to see Joel Spolsky do online learning. One of the startups in this area should get him as an advisor and do a weekly podcast with him.</comment>