Wouldn't you pay income tax on the RSUs based on the notional initial value, and only pay tax on the options if you exercised them?

Not really. RSU’s don’t have a “notional initial value” for public companies; if you get them, you pay tax on the number of RSU’s you got times the stock price at the time you get them. Your vesting schedule will just say, “X units of ABC on 5/1/20” with no dollar figure.

Brokerages will typically set things up so you can automatically sell enough shares to cover your tax liability as soon as they vest.

Typically you have to amend your cost basis on your tax return for this to actually work, for some stupid bureaucratic reason. Probably a conspiracy to make people who get equity compensation buy the more expensive version of TurboTax.

(Under US law,) You pay income tax on RSUs only when they are both vested and released. (These typically happen on the same day, but in the future, not on the grant date.)

At my employer they withhold taxes from the RSUs themselves as they vest (taxes are withheld at the bonus tax rate using integer multiplication, I believe).

E.g.: you'll get Math.floor(x * (1-bonus_tax_rate)) shares and will owe no income tax (unless your marginal tax rate is over the bonus tax rate). After that point, you'll only owe taxes on possible capital gains from price at the time of vest to the time you sell.

Well, yeah, that's Boeing, but if I'm going to work at a startup I want options, I want lots of them, and I want a good strike price. After all, if it's not going to do damned well next year why am I even going there?

RSUs, as structured at companies I've been at, always have upside: you can sell them for the stock price, which is a least $0. At the worst, you make nothing. Tax is paid upon acquiring them by selling a number of the acquired RSUs to pay for the tax.

Options, however, can have downside: tax can't be paid with the excerised option itself, because you can't sell the exercised option. So you have to pay the tax out of pocket. Meanwhile, the company can go under, and render the options worthless: you've lost the tax amount. If the company's valuation increases significantly, the taxes can be fairly significant. But you also can't just wait to see if the company succeeds, either: every company I've been at forces you to exercise within a certain amount of time if you leave the company.