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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts
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To: ajtj99 who wrote (41204)10/28/2021 11:53:14 AM
From: Sun Tzu  Read Replies (1) of 97526
 
>> By taxing the person who was granted the options when they are issued and executed,

No. The tax should be immediate upon issuance. An option has value whether or not it is executed, as any options trader will tell you. The problem is that it is not easy to price those options. Even the BS model under prices them, and importantly can only price for European options. Nobody has been able to come up with a valid model to price American options.

Now I am going to pose the question to you differently. A lot of people work for their companies because they get stock options. IF they were not getting those options, then they would be asking for much higher pay or would not be working for those companies. So clearly the options are benefiting the company. Why do you think the company should not be taxed on this benefit they enjoy? I understand that it is hard to do accounting for this. But that is not a good enough answer. We can change the rules and find a way. In our system, when your receive a benefit below market rate, in this case employee services below what the market would be, you pay taxes on them. So why should the company not be taxed on this ground?
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