A Tax Tweak for Silicon Valley Workers Awaiting IPOs

The Senate's tax proposal would disrupt the disrupters: By taxing stock options at the time of vesting, rather than when they're exercised, the change would push startups toward cash compensation. Venture capitalists say that would be expensive and harmful to innovation. But the reality is that changes in Silicon Valley financing culture over the last decade have made equity compensation a bad deal for startup employees, as I can personally attest, so this policy change would probably be good for workers.

The idea of stock option compensation for startup employees is sound: allow risk-taking employees the opportunity to get paid less in cash, in exchange for upside if a company does well. This reduces cash pressure on early-stage companies, and it aligns workers' priorities with the companies'. If the company succeeds, everybody wins -- what could be more American than that?