I would be OK with such a law if it only applies going forward, to companies that are headquartered in SF and formed only on this date or later.
But to pass an IPO tax after hard-working employees have put in literally years of longer/more-stressful hours at reduced compensation levels (relative to working at established companies) to get to this payoff is unfair and unjust. Those employees have entered this arena (the startup game) with certain expectations and rules in mind, which made taking on risk and deferring gratification worthy to them. Pulling the rug out last minute to shore up the city's own finances is punitive and unreasonable, especially when the law is targeted so narrowly. And no, the fact that some of those employees will get large sums of money out of this does not make it less unfair or less unjust.
Agree completely, although I'd frame it differently. I'm not sure how much sympathy anyone has for the Uber folks specifically, but this would certainly be food for thought for anyone thinking of starting a company in SF, or contemplating shifting their headquarters.
Congress actually did something similar in 1980 when they passed a Windfall Profit Tax on oil to capture "unfair" profits in the wake of the OPEC oil embargo. It was wrong then, and it's wrong now.
They’re changing the tax rate from 0.38% to 1.5%. That’s not going to make a noticeable difference to these employees. Small fluctuations in the stock price will affect them far more.
The startup/IPO game is already incredibly unfair. How many people put in that same hard work only to be left broke at the end of it because their startup failed? Someone losing out on 1.12% of their IPO riches is pretty irrelevant by comparison.
It would actually be interesting if there was at least some reform that made exercising ISOs not have tax implications traded for a larger tax rate in the case of an IPO.
But to pass an IPO tax after hard-working employees have put in literally years of longer/more-stressful hours at reduced compensation levels (relative to working at established companies) to get to this payoff is unfair and unjust. Those employees have entered this arena (the startup game) with certain expectations and rules in mind, which made taking on risk and deferring gratification worthy to them. Pulling the rug out last minute to shore up the city's own finances is punitive and unreasonable, especially when the law is targeted so narrowly. And no, the fact that some of those employees will get large sums of money out of this does not make it less unfair or less unjust.