Today's "no brainer" - reduced tax on employee stock options
If you have a good idea but no money, how do you get skilled and in-demand talent to develop that idea into something of value?
One way is to promise them a share of future value. In the US, the employee stock option tax rate is 15 percent. In Sweden (if successful, including social security contributions) - 68(!) percent.
Perhaps it is not so strange that we have an internationally low proportion of venture capital in small, start-up companies? In total, an entrepreneurial option tax reduction is estimated to have a marginal impact on Swedish government finances. Especially as a tax relief will only be relevant for those who actually succeed, which is estimated to be about 25 percent of all entrepreneurial ventures. All according to research findings presented by Tino Sanadaji at the Swedish Institute for Business Research during a parliamentary seminar organized by IT&Telekomföretagen, Swedish Medtech, Entreprenör and the Green Party yesterday on the theme.
In other words, sensibly taxed employee stock options cost little. They help create jobs, they increase employees' commitment to the company, they create conditions for risk capital to meet and enter into agreements with entrepreneurs (something we lack in Sweden), they promote increased value creation of good ideas and they help to increase Swedish competitiveness.
Counter arguments anyone?