Google Fills California Tax Coffers

Get the WebProNews Newsletter:

[ Search]

All of that insider selling by Google insiders like Eric Schmidt, Larry Page, and Sergey Brin helped boost the state’s take in personal income tax. Tax collectors in California must have been shouting the state’s motto when counting up the receipts in April.

Google Fills California Tax Coffers
Google Shares Wealth With California

SFGate.com reported that a record $11.3 billion haul in April beat last April’s collections by $4.3 billion. The article attributed some of that gain to Google insider sales.

SFGate noted how Google insiders sold $4.4 billion in stock in 2005. Most of that came from Brin and Page, who each parted with around $1.3 billion of their shares. All of that selling could have contributed to as much as one-eighth of California’s tax windfall.

The report pegs the low end of the tax bill on those insider sales at $450 million. It doesn’t include sales by other Googlers who do not have to publicly report those transactions, and assumes most or all of the capital gains taxes owed were paid in April instead of during 2005.

Evidently, Silicon Valley denizens, and not just Google, needed some extra time to put all those zeroes in the right places on their tax forms, the article said:

What we do know is that the Franchise Tax Board received a lot of very large checks with extension requests last month, says Brad Williams, director of fiscal forecasting with the state legislative analyst’s office.

“We did get a little information from the Franchise Tax Board about where the biggest payments were coming from, and a lot were coming from Silicon Valley, the San Francisco area. That tends to suggest it is sales of stock, maybe by founders of companies, people with large numbers of shares,” Williams says.

The potential for problems comes from how the state government handles this largesse. They could follow the accounting maxim of “expect losses, assume no gains” and tuck the extra money into a rainy day fund. Or they could assume Google and other companies will keep on pouring billions into the tax office forever and ever, and spend it all in one day.

A third option could be the proper and balanced management of those funds, which would resist the more blatantly abusive cash grabs that could be made by certain legislators. Californians probably have a good idea of whether or not that is likely to happen.

But they should all keep an eye on Google’s stock performance. Since the beginning of 2006, Google’s publicly reported insider sales by its officers already top $2.5 billion.


Add to | DiggThis | Yahoo! My Web | Furl

Bookmark WebProNews:

David Utter is a staff writer for WebProNews covering technology and business.

Google Fills California Tax Coffers
Comments Off on Google Fills California Tax Coffers
Top Rated White Papers and Resources

Comments are closed.

  • Join for Access to Our Exclusive Web Tools
  • Sidebar Top
  • Sidebar Middle
  • Sign Up For The Free Newsletter
  • Sidebar Bottom