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02 July 2018


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In your article above on Wisconsin v. U.S. you state:

"While initially it appears that the application of the decision is narrow and applies only to employee stock options (also perhaps RSUs and other types of stock compensation) at railroad companies, the implications are broader."

Do you mean that in present equity compensation plans recently created by companies that are not Railroad Companies, the exercise of ESOs is not a taxable event"?

Nice commentary, Bruce. Technical cases like this don't usually result in SCOTUS splits along ideological lines, so this one is, as you say, a prime example of the difference in approach between two philosophies of jurisprudence. Gorsuch certainly had the better textual and rhetorical points, and there was certainly no facial ambiguity in the statutes, but Breyer is presenting what used to be the consensus view that the idiots in Congress couldn't possibly have meant the two statutes to be treated differently, so it's up to the courts to fix their mistakes.

John, the decision makes no change in the taxation of stock options for those not "working on the railroad." Even for those that do, it just concerns the equivalent of the Social Security and Medicare taxes (FICA), which is the RRTA tax for those in the railroad industry. What I mean by the "implications are broader" is that the decision highlights the divide in the Supreme Court over how to interpret statutes and also shows what the justices know about stock options.

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