Also IIUC startup equity value (for tax purposes) is typically based on the startup's 409(a) price, which I think is pretty different from investor valuations, since investors get preferred stock (among other differences)
Yes.
> At this point, wouldn't your business have hundreds of employees?
Also yes. Why does this imply you'd be making more than $150k?
In most places outside of SV, $150k is enough to qualify as "Affluent".
You're right, an owner of $160M paper money might not have 2m/year liquid, but I am sure there will be many banks willing to provide equity secured debt (perhaps no payment needed until exit!) to pay for the taxes. Also, if this pushes startups to profitability/IPO earlier, I think that's probably a good thing.
Also IIUC This seems to be a number that need paid (19MM per Billion?) every year - is that right? About a 2% tax.
When the news came out this week the Uber dropped in price it was naturally accepted it was because the lock out for employee stock sales ended.
Imagine you're a startup founder who has a high-flying startup. You own 20%. It just got valued at $800,000,000. Now you're worth $160,000,000 ON PAPER. That's awesome. But it's not the same is being rich.
Imagine your salary is $150,000. With the Warren plan you now owe $2,200,000 PER YEAR in taxes from cash you don't actually have. So you now what, sell your company? Try to secondary? Congrats you just got taxed real money on fantasy paper gains that you never realized.