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Earl,
Agree with you on all but one thing. Changing the tax law does not affect
the amount of taxes the government will receive. It is a zero sum game.
John
----- Original Message -----
From: "EAdamy" <eadamy@xxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Saturday, June 23, 2001 9:45 AM
Subject: Re: [RT] Tech workers upset that they owe taxes on underwater
options
> With all due respect to all the college educated, high tech workers who
are
> now the holders of under water options, I heartily disagree.
>
> 1) the high tech industry attracted option seeking employees in large
> measure due to the lure of potentially outsized profits on options in lieu
> of wages ... this was a gamble and any educated individual knows gambles
can
> go either way
>
> 2) no one force high tech workers to work for options and most were paid
> rather decent cash wages to boot
>
> 3) these college educated, high tech workers might have seen the bubble
had
> they looked beyond their desire to get rich quick
>
> 4) the rules of the game i.e. the tax laws, were known well in advance and
> it was the responsibility of those trading cash wages for prospective
future
> option profits to know the rules ... certainly one would expect adults to
> have acquired knowledge regarding these trade-offs before accepting paper
in
> lieu of cash
>
> 5) any prudent individual (college educated or otherwise) would have
> recognized the tax liability when incurred and sold enough stock to cover
> the liability or, at the very least, sold enough stock to recognize losses
> sufficient to mitigate the same-year tax liability
>
> 6) high tech workers were not the only exceptionally hard working
employees
> in this country ... younger employees of all professions typically work
long
> days in expectation of building a career ... the options game as played by
> the majority of the high tech companies was widely abused to the detriment
> of shareholders, taxpayers at large, and the economy of this country i.e.
> high tech stock options were a critical leg of the bubble
>
> 7) this whole high tech bubble was a replay of the high tech bubble of the
> late 60's and early 70's - options, IPO's, brokerage analysts run amuck,
and
> absurd stock valuations ... perhaps those who spent 4 years in college and
> additional time in graduate school should sue the schools for not forcing
> them to learn some lessons from economic history
>
> Those who have tax liabilities on losing stock positions acquired via
> options need to sell stock to cover the liabilities or recognize losses to
> mitigate the liability. Those who took the gamble and banked profits are
not
> crying. Those who took the gamble and did not bank profits were in a
> position to insure that the gamble did not turn into a loss. Instead they
> chose hope over prudence and it is not the responsibility of the tax
payers
> to fix the problem. Some of life's lessons cost real money ...
>
>
> Earl
>
>
> ----- Original Message -----
> From: "John Hall" <jrhall@xxxxxxxxxxxx>
> To: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Saturday, June 23, 2001 9:33 AM
> Subject: Re: [RT] Tech workers upset that they owe taxes on underwater
> options
>
>
> > Options are part of the compensation given to an individual for hard
work
> > and success. The companies determine who and how many options an
> individual
> > gets not the individual. Most people who received them worked 12-14
hours
> a
> > day 5-7 days a week. I was one of them. Most people who received
options
> > did not work hard because of the options in front of them, five years
out
> I
> > might add. These are people who for the most part have spent a minimum
of
> 4
> > years in college to get a degree and additional time in training or
> graduate
> > programs. These people are not option babies.
> >
> > The problem is one of greed by our government who want taxes on
> non-existent
> > income. The options are non-quals which are not taxed at time of
> exercise.
> > The options given by most companies now do take out taxes at time of
> > exercise. Once an individual purchases the stock from an options grant
> the
> > taxable is the difference between the grant price and the current value
of
> > the stock on the date of exercise. Once the individual sells the stock
> > gained from options exercised the taxes are adjusted to what the "real"
> > profit or loss is. Most of the options from these companies are either
at
> > the money or under water now. A lot of the people who exercised options
> and
> > did not sell at the height are under water from the exercise price.
> >
> > You should be pointing your finger where the problem lies with the
Federal
> > government, not the individual. Bottom line for me on this issue is a
> > socialist tax system that wants to re-distribute wealth in this country
to
> > those who neither took the risk nor the time to get educated nor worked
to
> > make the money. A congress that is so greedy that they define
un-realized
> > gains as income. What's really interesting is that companies pay taxes
on
> > the options and anyone getting the options pays taxes on that same
money.
> > The governments double dipping.
> >
> > By-the-way Ira, if I follow your logic you should pay taxes each time a
> > trade you are in shows a profit before you have closed out the trade.
> This
> > is regardless of the final outcome of the trade. You can adjust the
taxes
> > after the trade is closed.
> >
> > "One of the option babies who isn't under water."
> > John
> >
> > ----- Original Message -----
> > From: "Ira Tunik" <irat@xxxxxxxxx>
> > To: <realtraders@xxxxxxxxxxxxxxx>
> > Sent: Saturday, June 23, 2001 7:42 AM
> > Subject: Re: [RT] Tech workers upset that they owe taxes on underwater
> > options
> >
> >
> > > They couldn't even sell enough stock to cover the taxes. that is real
> > greed
> > > and now we are supposed to pay.
> > >
> > > Me wrote:
> > >
> > > > Driving the economy into recession and raising living costs to
insane
> > > > levels wasn't enough for the tech industry, now the option babies
are
> > > > upset because their stock options are underwater and they owe big
> > > > taxes. Sheese. I know people who have gotten into this situation
> > > > and it all occurred because they were greedy. They didn't sell
their
> > > > options at exercise time, instead choosing to hold onto the stock so
> > > > they would pay less taxes down the road. Will Congress succumb and
> > > > bail them out like AG has bailed out the big companies that made the
> > > > wrong decisions?
> > > >
> > > > The Valley's Tax Revolt
> > > > By Scott Harris
> > > >
> > > > Tech workers are taking a big tax hit on their stock options. Will
> > > > Congress come to the rescue?
> > > > http://www.thestandard.com/article/0,1902,27355,00.html?nl=int
> > > >
> > > > To unsubscribe from this group, send an email to:
> > > > realtraders-unsubscribe@xxxxxxxxxxxxxxx
> > > >
> > > >
> > > >
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> > >
> > >
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> > >
> > >
> > >
> >
> >
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> >
> >
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> >
> >
>
>
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