via AVC:

What this would mean is every month, when your equity compensation vests a little bit, you will owe taxes on it even though you can’t do anything with that equity compensation.

You can’t spend it, you can’t save it, you can’t invest it. Because you don’t have it yet.

Taxing equity compensation upon vesting makes no sense.

Generally, startups pay less but you’re granted vesting equity that you hope will make you a decent sum of money at some point. Most of these companies never have an exit and therefore those shares are useless so to be taxed on shares that only have a value on paper based on the last round of funding will cause smart people to bow out of the startup life. You can call these people privileged but it will hurt innovation. IBM will get more of the smart people who should have been starting companies.