Parker Conrad

Rippling payroll & HRIS admin, CEO.

Nothing here should be construed as investment advice nor used in any investment decisions related to Rippling.

[Parker Conrad @parkerconrad]

The point is that like many founders, I am a "paper" billionaire. I have theoretical wealth, but it's not "real": I can't pay bills with private co stock. This bill treats it like it's real, and forces me to pay a tax bill that is 4X larger than my entire life savings. So I am not just ruined, I need to borrow massively.

[Parker Conrad @parkerconrad]

The reason is that this tax is on assets that are not liquid, and which I cannot sell. I have a certain amount of liquid assets - stuff in a checking account, in stocks. I will owe about 4 times my entire liquid assets and life savings under this tax. So, it wipes me out and I then I still owe more.

[Parker Conrad @parkerconrad]

@grantbelden @RoKhanna Private co fundraising tends to be all or nothing - either you raise an up round or there is literally no available capital at all. And even if you sell at a discount - the bill says you owe taxes based on the *highest* valuation in the last two years. Does that seem fair?

[Parker Conrad @parkerconrad]

@itnevermatterz @grantbelden @RoKhanna That is often difficult and sometimes impossible to do.

[Matthew Lilley @MattGLilley]

In Zucman's world, if you wave your hands and say something is one-off, people won't adapt their behaviour. "Rational expectations!"

This has curious implications. If it's rational to do the tax once, by symmetry, it's rational to do it again.

A second, "one-off" surprise.

🧵

[Parker Conrad @parkerconrad]

@MattF_inspire @christopherrufo @RoKhanna Ro is lying to you about what this bill does and how it works.

[Parker Conrad @parkerconrad]

@MattF_inspire @christopherrufo @RoKhanna This tax literally confiscates 100% of every dollar that I have. I'm told the government will leave me an allowance to live on (unclear how much). I will have a lot of illiquid stock -- and still owe more in taxes.

[Parker Conrad @parkerconrad]

@grantbelden @RoKhanna You assume that it's possible to do. That's not always the case.

And at min you should not pretend that this is a "5% tax" that will not be noticed -- it is a confiscation of 100% of the liquid assets of private company founders in almost all cases.

[Parker Conrad @parkerconrad]

@grok @ChaseMighell @RoKhanna The legal advice I've gotten is that to access deferral accounts I first need to pay *all* of my liquid wealth to the government, minus an "allowance" the govt allows me to keep for living expenses. Ro is lying about how these deferral accounts work b/c he doesn't care.

[Sylvain Catherine @sc_cath]

Imagine this logic applied to public debt.

California defaults on its debt, just this once, and promises never to do it again. Proponents say it will keep borrowing at the same rate as before.

Rauh would say: "No. Lenders won't believe you, so you'll pay a higher rate on everything you borrow from now on. That will cost us dearly in the long run."

Zucman would reply: "Fallacy. Why would lenders charge more unless you default again? And if you default again, you save money again... by virtue of, well, defaulting."

[Parker Conrad @parkerconrad]

@LillywhiteRay @christinacaci 1. As token prices fall, there will be pressure to cut costs. If your product isn't good enough to get margin, why would you have pricing power when costs fall?

2. It has never been my experience in B2B that charging less makes it easier to grow fast.

[Parker Conrad @parkerconrad]

With respect, this is terrible advice. You need to prove -- to yourself more so than to investors -- that intelligence is more valuable inside your product, than on top.

If tokens *aren't* worth 4X inside your product, what are you even doing? You're just reselling the labs. 1/

[Patrick OShaughnessy @patrick_oshag]

Christina Cacioppo on why Vanta is eating its token costs:

"If you try to charge people based on tokens, they are very quick to say, 'Oh, you've just marked up a Claude token 4X. Are you 4X as good as Claude?'

You actually put yourselves in a competitive position against the models that probably no application really wants to do.

We're eating the token cost right now. We're taking lower margin.

This is a usage phase and a deployment phase of this technology, and just go nail that, and you can figure out commercialization after."

[Stan Veuger @stanveuger]

Very good explanation from one of the smartest French economists of why Mélenchon can cancel all French sovereign debt that was outstanding as of July 1st this year without any negative consequences, as long as he promises it’s a one-time default.

[Parker Conrad @parkerconrad]

@catpoopburglar @ModeledBehavior @scottlincicome I don't think so. Not in my case, not in the case of friends who are subject to this tax. My home is in CA, my kids are in school here. But this tax will bankrupt me; if I have to flee the state, I will.

[Parker Conrad @parkerconrad]

@gabriel_zucman We aren't stupid. We know that you are already working on the next "one time" wealth tax for 2028. It may be too late to move to avoid this one but no one will stick around for the next one, if this one passes.

[Parker Conrad @parkerconrad]

@gabriel_zucman You call this "one time" but unions are already preparing the next one for 2028. An annual wealth tax will generate $0 b/c not one person will stay -- every single billionaire will flee the state. Almost everyone who has not left, is planning to leave ahead of the next one.

[Parker Conrad @parkerconrad]

@catpoopburglar @ModeledBehavior @scottlincicome Many people have not yet left. But *no one* believes this is "one time" (in fact - the unions are already prepping a second "one time" wealth tax in 2028) and if this passes, most people still here -- including me -- will flee before the next one.

[Parker Conrad @parkerconrad]

This is completely wrong. First, the tax is on all assets of anyone with $1B or more in wealth, not just wealth over $1B. I can tell you, having looked pretty hard, it is far more difficult to access cash than your hand-waving suggests. Public co? Great. Private illiquid company? Depends. For a small handful of them it will be easy, for the rest, very hard to impossible. And there are so many punitive elements to this legislation that overvalue these illiquid assets — if you have supervening shares, they are valued at 10X which means you owe 50% not 5%. Valuation firms face *personal* penalties if the govt decides they under-valued assets — which means most firms are REFUSING to conduct valuations, and if they will do them, have extreme incentives to err on the side of overvaluing the company.

[Parker Conrad @parkerconrad]

One example in my case is that I will owe several times more, in taxes, than I have in liquid assets. I’m told the govt will confiscate every dollar of my liquid assets, leaving me an indeterminate allowance to live on — and a bunch of illiquid stock. Apparently unions are already prepping the next “one time” wealth tax for two years from now. Even if it’s too late to avoid this one, how could I possibly not flee the state in anticipation of the next one?

[Parker Conrad @parkerconrad]

@ABCFlowe Nope, we have a great MCP: https://t.co/Y6XardJ6X0