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Venture Capital

The Bay Area Should Levy a 5% Equity Tax on Startups

There are a lot of new tax ideas circulating in conversations. With aging infrastructure, growing inequality, and an expectation of less federal support in the future, conversations among state and local politicians about raising more regional revenue through things like a wealth tax or adding high-earner income taxes abound.

I have a counterproposal that I think would serve the Bay Area well and is consistent with the ethos of the region. All new tech startups should be required to give 5% of the founder’s equity in new ventures to a state or regional fund.

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A 5% equity tax would be an enormous and instantly valuable asset for the community even if liquidity events and returns were far in the future.