You're splitting hairs. A company whose valuation rises enough for this to become an issue is very rich in a very real sense.
Second, most events that would cause such a huge rise in valuation are accompanied by a huge influx of cash. There may be some tiny edge cases, but a gangbusters IPO ain't one. The bill is due once a year, and imagining a company being without the cash for it stretches my imagination to the breaking point.
Third, "being asked now for money they don't have yet" is the entire reason the company is selling equity in the first place. They can surely budget for an extra 0.015 of an already proportionally tiny amount.
Fourth, they aren't taxed on valuations but on, to coin a term, their employees' realized compensation. This may be based on valuation, but justifiably so, since compensation is compensation.
Hell, a company with bottomless greed and a deep commitment to nickle & diming could probably find a way write the tax bill into their options contracts.
Fifth, the weird part of the law is that it is structured as a payroll tax rather than as an income, capital gains, or wealth tax.
Otherwise it appears to be a very honest attempt to fairly tax different forms of compensation in a non-regressive way.
Second, most events that would cause such a huge rise in valuation are accompanied by a huge influx of cash. There may be some tiny edge cases, but a gangbusters IPO ain't one. The bill is due once a year, and imagining a company being without the cash for it stretches my imagination to the breaking point.
Third, "being asked now for money they don't have yet" is the entire reason the company is selling equity in the first place. They can surely budget for an extra 0.015 of an already proportionally tiny amount.
Fourth, they aren't taxed on valuations but on, to coin a term, their employees' realized compensation. This may be based on valuation, but justifiably so, since compensation is compensation.
Hell, a company with bottomless greed and a deep commitment to nickle & diming could probably find a way write the tax bill into their options contracts.
Fifth, the weird part of the law is that it is structured as a payroll tax rather than as an income, capital gains, or wealth tax.
Otherwise it appears to be a very honest attempt to fairly tax different forms of compensation in a non-regressive way.