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Seattle startup founders, investors react to new state capital gains tax
- schemescape 3y agoWorth mentioning that Washington has the most regressive state and local taxes in the country: https://itep.org/whopays-map/ https://itep.org/whopays-map/ I’m curious where Washington will end up on the list if this goes into/stays in effect.
- hedora 3y agoI’d guess they’d be worse off if they look at net worth or five year rolling income of the people paying this. A $250K gain because your startup got acquired or IPO’ed doesn’t exactly translate into a high average salary over the many years it took to gain the windfall. (versus, say, working at Microsoft or Amazon, and getting an extra $50-100K per year.)
- whateveracct 3y agoYou think this tax is mostly going to affect startup employee windfalls? Seriously? It's 7%. So if you make a 1.25M (remember how tax brackets work - it's after the threshold) - you pay WA $70k. I think there's literally no way to argue that's regressive.
- hedora 3y agoSo, you make $150K in salary for 10 years, and $1.25M in one year, for an average of $162K a year. That’s below starting salary at Microsoft. You pay an average of $7K per year, and the Microsoft employees pay zero. It is certainly not a progressive tax. If they time averaged it over ~ five years, it would be. Another way to look at it is that they say it will affect 7000 households statewide. It will affect pretty much all startup windfalls, so either there are only 7000 startup employees in the whole state, or they know this is going to be a windfall tax on people that have low average income.
- whateveracct 3y agoYou also make way more money than that MS employee over those 10 years. So I think paying a little ($7k is not much) more tax is fine. Where are you getting that it only affects startup exits? Is there a source? Guessing?
- HWR_14 3y agoThose people probably qualify for the QSBS exemption of up to $10 million.
- seanmcdirmid 3y agoNot alot of poor people are realizing $250k non-real estate or retirement capital gains in a single year.
- mostertoaster 3y agoYeah I definitely want to leave Washington state if they continue down this road. For a time the state was socially liberal but still pretty business and tax friendly but there are too many greedy people who want to get their hands on that wealth entrepreneurs are creating. And to build schools!? I already private tuition and our school could stand for some improvements, and our teachers deserve a bump in salary, but no we’re going to go tear down some perfectly usable elementary school to make a new more environmentally friendly one. The money from this tax will only fatten the pockets of the bureaucrats, and will do little to nothing for the average person. Washington in a nutshell.
- edmundsauto 3y agoThis comment is perfect. I can’t tell if satire, or not. Thank you!
- operatingthetan 3y agoRight, they value the state being "socially liberal" but the second they have to contribute (as a very fortunate person) then it's a bridge too far and they want to leave. Complaining about paying for public schools and teachers as a person who literally admits to paying for private tutition is unimaginably out of touch. I too hope it's satire but unfortunately people like this exist.
- HopenHeyHi 3y agoYes, people tend to develop different opinions about taxes depending on their financial situation. Perhaps a decade ago this person would have written your comment word for word -- who knows what kind of comments you will be writing as your situation develops. Only time will tell. :)
- operatingthetan 3y ago> people tend to develop different opinions about taxes depending on their financial situation I didn't state that. No need to subvert my point by suggesting even more money could change my opinion.
- 8f2ab37a-ed6c 3y agoCurious how real estate was left out of this.
- doktorhladnjak 3y agoReal estate, timber interests, farming interests, and auto dealers got their industries exempted. Flat out political corruption.
- filoleg 3y agoI think we all know quite well in terms of how and why real estate was left out of this. Willing to bet that the ratio of politicians in Seattle that realize capital gains in excess of $250k/year vs. those that own real estate (especially multiple properties) is heavily favoring the latter group.