This past April, the state of California had a record month for income tax receipts. The reason? Google's top executives and directors sold a bunch of Google's stock last year...and paid their capital gains tax last month.
California took in $11.3 billion in tax receipts in April of 2006...$4.3 billion more than in the same month in 2005. It is believed that much of this gain came from the capital gains tax on stock sales by Google employees. Last year, the search engine's 14 top executives and directors sold $4.4 billion worth of stock, including $2.6 billion in stock sold by founders Sergey Brin and Larry Page. Assuming the insiders acquired the stock at very low cost, and that they all are in the state's top bracket of 10.3%, this group would owe the state a cool $450 million in capital gains tax.
This does not include the legions of middle-manager Google employees, who do not have to publicly disclose their stock sales. Presumably, many of these folks were sellers too...pushing the state's take to well above the $450 million amount.
California says: We (heart) Sergey and Larry!
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