> It could keep it (disallow voting shares by law) and spend the dividends.
And if the stock doesn't yield dividends?
And if the stock doesn't yield dividends?
The best part is this works for private companies too. If you work at a startup and get options, now you don't have to pay taxes (as cash) for options you exercise which later turn out to be worthless. You can just hand the government some of your shares. Later down the line, the government either shares in your windfall or misses out along with you. Very fair.
Odd that you refer to your efforts in a startup as delivering a windfall, as if you didn't earn/expect it, as if it's a lottery ticket.
Should we tax lottery earnings? Sure, why not, since we tax everything else.
But a startup is not a lottery ticket, and we are harming it, at least indirectly and likely directly, by taxing it before it even exists. Even just the paperwork to handle all of this is needless friction.
If you want real $$ work at a public company.
You're correct that taxing exercised options at a private company is harmful. It happens today. I'm suggesting a fairer alternative.