Facebook Stock Crash Hoses California's Tax Revenue

[Anti Federalist]

Schadenfreude, thy name is Anti-Federalist.



Facebook Stock Crash Hoses California's Tax Revenue

http://www.businessinsider.com/facebook-stock-crash-hoses-californias-tax-revenue-2012-8

Well, the hits from the Facebook stock implosion keep coming.

Now, it's the State of California, which apparently overestimated how much tax revenue it was going to collect from Facebook employees after the IPO.

According to Bloomberg's John Erlichman, California is now saying its "tax revenue is at risk" because it assumed it would get $1.9 billion from newly enriched Facebook employees.

But now those Facebook employees are only going to get about half as rich as they would have if the stock were still trading at the IPO price.

And that means that California--and the Federal government--are likely to collect only about half as much Facebook-related tax revenue as they thought.

[Acala]

Just when you think government must finally have run out of different ways to be incompetent . . .

[devil21]

It's not like practically every other .com IPO has gone the same way as the Facebook IPO has.....who could have predicted the stock would lose half it's initial value in a month? Oh wait...I bet those that bought stock in recent IPOs of Groupon, Zynga, and tons of others could have told you. The only people that make money on IPOs are the underwriters (usually Goldman), the principle investors that sell the moment the bell rings, and the brokers that process the trades. Sorry Cali, your government doesn't fall into one of those groups.

NEVER buy a stock from a recent IPO unless you enjoy losing money.

[tod evans]

Counting chickens before they hatch.....

[Brian4Liberty]

There could hardly be a more incompetent and greedy group of politicians than California has. They are notorious for looking at other people's success as an opportunity to wet their beaks.

[UpperDecker]

I was dumbfounded when I overheard this on the news yesterday. Absolutely absurd.

[VoluntaryAmerican]

FB stock is going to continue to plummet IMO. Posted an article on their weak advertising system the other day.

[WhistlinDave]

Especially ridiculous considering the answer to our budget shortfall is staring us right in the face... All we need to do is legalize the good herb and enact a modest sales tax on it and the problem is solved. Not that I think they should keep spending away; clearly my state government's level of spending is ridiculous and that's the real problem. But until we get that fixed--which will require a major change in the whole mentality of most Californians and that takes time--a good short term improvement would be to tax the herb. Of course then the state government officials would have to grow some balls and stand up to the Feds and draw a line in the sand... I think Colorado and Washington are going to beat us to it though. Glad somebody is about to get the ball rolling on this. About time.

[devil21]

The Feds gotta be bailing out the CA government through some backdoor. That's my bet. They're running huge deficits for years now (as the 6th largest economy in the world) and can't print like the feds can. Are they lying about their budget or are they really kicking the can this long or are they getting backdoor bailouts somehow? Their bonds must be flying off the shelf somehow. Who is buying???

[Lafayette]

Oh noes! Does this mean i won't be riding the high speed train to Sacramento to piss on the doors of the state legislature?

[kathy88]

They admit they were counting on revenue from a gamble and wonder why no one trusts them. Huh.

[specsaregood]

Especially ridiculous considering the answer to our budget shortfall is staring us right in the face... All we need to do is legalize the good herb and enact a modest sales tax on it and the problem is solved. Not that I think they should keep spending away; clearly my state government's level of spending is ridiculous and that's the real problem. But until we get that fixed--which will require a major change in the whole mentality of most Californians and that takes time--a good short term improvement would be to tax the herb. Of course then the state government officials would have to grow some balls and stand up to the Feds and draw a line in the sand... I think Colorado and Washington are going to beat us to it though. Glad somebody is about to get the ball rolling on this. About time.

Really? Because I think an even better answer would be to for CA citizens to stop paying federal taxes. CA is a tax donor state and if the money wasn't going to DC, cali wouldn't be having these budget problems. Yet, you propose new taxes as the "answer"?

[brandon]

THey based their fucking budget on the facebook IPO price? Is this a friggin joke!?

[ShaneEnochs]

Seriously? They were budgeting based on Facebook?

[ronpaulfollower999]

Oh noes! Does this mean i won't be riding the high speed train to Sacramento to piss on the doors of the state legislature?

You'll still be able to, just the announcements will be in Chinese first.

[RonRules]

But now those Facebook employees are only going to get about half as rich as they would have if the stock were still trading at the IPO price.

That's a nice way to put it for the few that gained. What about ALL the people that bought at $40 and lost 50% in a few weeks. That's going to be a lot of write offs.

[VBRonPaulFan]

Seriously? They were budgeting based on Facebook?

lmao, that was my first thought. you know shit is bad when a government plans its fiscal budget around plundering the wealth created from one or two specific businesses.

[WhistlinDave]

Really? Because I think an even better answer would be to for CA citizens to stop paying federal taxes. CA is a tax donor state and if the money wasn't going to DC, cali wouldn't be having these budget problems. Yet, you propose new taxes as the "answer"?

Legal, taxed marijuana is far better than illegal marijuana and Federal raids on California dispensaries that waste who knows how many millions of Federal dollars enforcing an insane prohibition, any day. At least in my opinion. There is sales tax on everything else I buy. Plus, my weed will still be cheaper any way you slice it. Because once it's legal, the cost will drop significantly, even after adding sales tax.

Personally I think that would be better for my health and my family than finding out what happens if I suddenly stop paying my Federal taxes. I don't own enough guns to consider that as an option.

[Anti Federalist]

lmao, that was my first thought. you know shit is bad when a government plans its fiscal budget around plundering the wealth created from one or two specific businesses.

That's being generous, in calling whatever it is FedBook does a "business".

[VBRonPaulFan]

That's being generous, in calling whatever it is FedBook does a "business".

basically what they do, is attract a huge clientele to a specific location, to make it attractive to companies to advertise there. the majority of their revenue is ad revenue, with a little bit coming from credits people buy to play facebook games. it's quite a legitimate business model (the company I work for does basically the same thing. provide content that attracts a ton of users, and charges companies to put their ads on our website).

[muzzled dogg]

Lol there's some good posts on here

[Brian4Liberty]

THey based their fucking budget on the facebook IPO price? Is this a friggin joke!?


Seriously? They were budgeting based on Facebook?

Just the tip of the iceburg around here. There was a single year at the height of the dot-com bubble when the State had a very small current budget surplus. They danced in the corridors of the State Capital and then argued with each other about how to spend that small surplus. Everybody wanted to get their filthy, greedy hands on it.

No talk at all about applying it to outstanding debt or saving it for the future.