I’m not tax or shares expert, but believe there are tax concessions and deductions available which vary greatly based on type of employment. For example, tax free (before tax) salary packaging is available to many staff in Not For Profits, but remains unavailable to staff in other workplaces. Travel to work costs may be deductable for small business owners & partnership type workers (depending on circumstances of course), whereas those same deductions are essentially inaccessible to employees in public companies. No doubt more informed readers could name many other examples.

So as far as I can tell, differences in the availability of tax concessions or allowable deductions are not necessarily unfair over all, but most likely balance out between types of employment. Otherwise, wouldn’t all of the workforce would move to the especially tax advantageous employment type, or try to do so?

I can’t say I’ve ever heard of anyone moving into employment for a public company for share scheme tax advantages (alone) … unless they’re at the stratospheric end of the payscale anyway. Of course, I could be overly naive, and am open to explanation of why my view is plain wrong.

We should only be taxed when we get the benefit - not when the promise is made.

Using the logic of taxing people when a promise is made then any predefined bonus scheme would taxed at the time of making the agreement.

We would tax people up front if they had a contract for employment for the next five years.

We would tax people upfront on the interest on a term deposit.

This approach is unfair and unworkable. Shares should not be taxed until they are realised in one form or other. E.g. the person receives a dividend on them, they sell them, they take out a loan using the shares as security.

Assuming that these schemes are not cancelled wholesale by companies as you suggest it seems unfair that the imposition of a tax regime like this benefits the wealthy executive who can fund the tax payment while those without the resources to make the payment has to opt out of the scheme. The way the tax is being implemented is regressive in that it allows the rich to get richer while the poor (relatively) miss out again.

The thrust of this article ignores one basic fact: All taxpayers hate the lack of symmetry in the tax system, it smacks of unfairness and punishes with one hand but provides no reward from the other. Clearly there is no symmetry in the way this tax has been implemented. On the one hand the government taxes the share or/option grant, the taxpayer pays the tax, presumably with borrowed money. The interest on the tax debt is not deductible as it is a personal expense and not for income producing purposes. On the other hand if the shares/options vest well and good, if they don’t the government refunds the tax but not the interest and it’s never deductible. In situations where the options or shares never vest the government has an interest free loan from the taxpayer while the taxpayer remains out of pocket to a substantial extent.