> If the goal is not to have people create startups, there you have it.

That only makes sense if you think the only reason anyone ever founds a business is to sell it to someone else...

People found businesses with the idea of making money. At certain points in the growth of the business, you expect you'll weigh whether it's more interesting to continue your work there or whether you should sell it and start from scratch another business. The question is why a government or a society would wish to suppress people who actively start businesses... not to throw shade on anyone who starts a business because they might want to make money by selling it later

Taxing the sale as normal income doesn't prevent you from selling it, it simply closes a loophole that would make selling it more enticing than continuing to run it yourself.

If anything, it means that startups are more likely to stick around and turn into real businesses rather than being bought by salesforce and disappearing into corporate oblivion

Wait, are you suggesting we do not get taxed for what we're selling? Because in the end selling a company is nothing but selling a type of goods.

Also: >Why would a person who founded a startup, and put countless unpaid hours into building it, then have to pay for the sale as if it were employee income?

Is the same as: Why would a person who created his career, and put countless of unpaid hours into building it, then have to pay for the sale of his knowledge and skill?

I think the point of the article is that it doesn't get taxed like other things we are selling (aka capital gains), but rather as income at much higher rates

> Why would a person who founded a startup, and put countless unpaid hours into building it, then have to pay for the sale as if it were employee income? What would be the incentive for them to have done anything more than be someone else's employee?

I would expect the incentive is the massive payout (even after tax).

If a startup founder would be better off as an employee because they have to pay the same amount of tax then it sounds like it was a bad idea to begin with.

Getting your income through a corporation instead of as a salaried employee is not inherently more valuable for society. We don’t want more startups for the sake of having more startups!

I don't know. I think we want some people to take risk. Spending a lot of time building something that you don't have any guarantee of being paid from is a risk, but for every 100 which fail, one will succeed in providing jobs and foreign investment. That is, in fact, the concept behind ycombinator in a nutshell. Not startups for the sake of startups, but startups for the greater good. And that means individuals taking risks.

Saying that working for existing corporations is more valuable to society underestimates the frequent and obvious value to society of the one-in-100 startup which creates new avenues of wealth for whole sectors of society. A dynamic polity should emphasize that and create more incentives for it - not even for the good of the individuals who do it, but for its own survival.

There are competing incentives: on one hand things like creating jobs and driving innovation, and on the other it's the incentive to avoid tax loopholes. I think most people in Europe (I hate generalizing "Europe" but let's say Nordics and Germany) at least would be more upset about the presence of a loophole that for example allowed people to funnel money through a company and lower (what should have been) income tax, than they'd be upset over how much tax policy incentivizes startup creation.

imo quite dubious to see the state only as "facilitator/suppressor" of economic activity and not also as a share/rent seeking entity itself. state capitalism is resurgent within a constellation of rampant international economic competition (especially in tech). taxing / fining US domination in tech is a working business model.

> and put countless unpaid hours into building it

Oh, just don’t mention that to the authorities because they will make you pay for breaching their working hours act. How dare you have a dream and a drive. Get back in line.

Authorities in Germany don’t care. They are the Beamte, the have a special legal status, barely removable from their positions and with a guaranteed high pension. There are two classes of people in Germany: Beamte and everyone else.

I don't think working hours are limited for c-level management.

It depends if you're employed as a managing director, or running your own thing.

No. It doesn't apply to either case ("leitende Angestellte" are exempt).

Jesus, is that true? You can get flagged for putting too many work hours into your startup? Or are you joking?

It's not true. Self-employed workers are exempt.