[FoRK] so is it for real now?

J. Andrew Rogers andrew at ceruleansystems.com
Mon Oct 13 22:00:29 PDT 2008


On Oct 13, 2008, at 8:54 PM, Lucas Gonze wrote:
> On Mon, Oct 13, 2008 at 8:12 PM, J. Andrew Rogers said:
>> Unless one is in the business of investing in small companies, it  
>> seems that
>> hardly anyone knows that these types of capital gains deferrals  
>> exist. The
>> rules are pretty liberal and flexible for the most part as I  
>> recall; the
>> venture capital community had their hand in tweaking them.
>
> James, here is my question for you.  Can *anyone else* here explain
> what it is that you're talking about?


Here, let me help you with a nice introductory guide from Wilson  
Sonsini Goodrich & Rosati targeted at venture capitalists:

"Tax-Free Rollovers of Qualified Small Business Stock: Federal and  
California Issues for Venture Capitalists"

http://www.wsgr.com/PDFSearch/1365820.pdf


I even gave you a nice reference directly to the tax code that a  
cursory bit of clicking would suggest that there was something to  
this.  Are you surprised that there things in the encyclopedic  
regulations that govern business that you are not familiar with?


> If hardly anybody -- including the many hardened entrepreneurs on FoRK
> -- knows about these rules, why it would it be gross malfeasance on
> the order of, say, tossing out habeas corpus to tweak them?


Two points:

First, there are a great many things under the heavens that people  
should know and do not.  There are even more things that people should  
leave to expert counsel, which is where I learned this way back in the  
1990s. On some level I am surprised at the number of people in the  
tech business who are not familiar with this, but on another level I  
am not when I consider how many *other* things most people do not know  
that are germane to whatever it is they do.  Ignorance of the law, or  
your legally exercisable tax avoidance options under the tax code, is  
not an excuse though understandable.


Second, on what basis would you replace a relatively mature and  
reasonable piece of regulation with a transparently inferior version  
that is not only a step backward in terms of the stated goal but rife  
with potential for abuse that is not in the existing version?  Do you  
think it is a good idea to let junior coders with sloppy style rewrite  
sections of operating system kernels that currently have no real  
defects?



It *is* gross malfeasance to replace existing simple regulations that  
require no significant oversight and achieve the goal pretty well with  
a political bureaucratic apparatus that empowers similar decisions to  
be made in an arbitrary and capricious manner, granting all manner of  
unnecessary power to the government in order to nominally accomplish  
what is already being accomplished in fact.  You are replacing  
(relatively) elegant engineering with a steaming pile of crap with  
obvious flaws, and you don't have a problem with it?

If the goals of the proposed policy are what is stated, we are either  
faced with 1) ignorance of the policy being discussed since they  
apparently do not know it has already been implemented, or 2) an  
intent to subvert the existing regulatory framework by restructuring  
it to make it easily exploitable for purposes of influence peddling  
and corruption.  Given these facts, and the fact that apparently some  
people have no problem with these facts, it is no wonder that the  
country is such a bloody mess.  Whether ignorance combined with  
inferior policy or backdoor attempts at malfeasance, it is an  
embarrassment.  If Bush had proposed such a thing, Democrats would  
have had a field day with it.


I might give the really shoddy design of the proposal a pass if it did  
not already exist given how many other shoddy regulations exist, but  
we can do an A-B comparison in this case, and you would have to have  
some really low standards to accept the New and Improved! version.  It  
is either evil or stupid.  Or both.  Take your pick.  I know, I know,  
it does not matter because we have been promised Endless Happy Fun  
Time(tm). Feh.

I won't take a bite of a turd sandwich simply because it has the  
Democrat or Republican imprimatur. Apparently I have unacceptably high  
standards.

Cheers,

J. Andrew Rogers





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