It’s good to see that the web is still wild. I happened upon a site called F_ck_dGoogle.com (edited), a site filled with such vitrol for Google (GOOG) it’s an entertaining read. Considering how so many fawn over the company and it’s prospects, it’s nice to see a site filled with contrarian opinion, however unprofessional.
The post that caught my eye linked to an article in Tuesdays San Francisco Chronicle newspaper that detailed the sheer magnitude the Google stock option windfall has had on California state tax receipts.
In 2005, officers, directors and other insiders at the largest 200 publicly held companies in the Bay Area sold a total of $9.6 billion in stock, up from $7 billion in 2004, according to Thomson Financial. Google alone accounted for almost half of the 2005 total.
Assuming this was low basis stock, that’s about $450M in tax receipts from Google Executives alone, and does not include all of the seed investors and VC firms who undoubtably unloaded the majority of their shares to seek diversification, and represented a much larger number.
California has a history of getting hooked on tax revenues.
In the late 1990s, taxes on capital gains and stock options started flooding into the state treasury. In fiscal 2000-01, they reached $17.5 billion, representing 39.3 percent of personal income tax revenues.
Here’s a modest proposal – why don’t Sergey Brin and other big-time Google Execs buy a home on the Nevada side of Lake Tahoe, commute to work four days a week by jet, and save themselves several hundred very-large in taxes? Consider the following:
38,000 California tax returns reported more than $1 million in income. They represented just 0.2 percent of all state-tax returns, yet they accounted for 14 percent of total adjusted gross income and about 30 percent of the total personal tax.
The top 3 percent of the returns, those with incomes exceeding $200,000, paid about 60 percent of all state taxes.
California is a great place to live, but if the government engages in enough progressive taxation to drive those 3 percent of taxpayers to move to another state, the remaining California citizens will be floating in a sea of neo-socialism red ink.