ISOs are priced at the 409a value, which can be 1/10th of the preferred share price. Generally speaking, the 409a value converges with the preferred price as the company is de-risked and moves closer to IPO.
This will hit companies that are within a few years of IPO particularly hard, since right now, they can use stock incentives as a significant recruitment tool, and large, unknown, multipliers between grant price and vesting prices are the norm.
Put another way, this will cripple the hiring ability of companies attempting to grow from $100M to $1B valuations, and make it much more likely for them to exit via acquisition instead of via IPO.
This significantly reduces the incentives established companies will have to innovate, and is a classic example of regulatory capture.
(Also, other parts of this tax plan will significantly increase taxes for students; especially graduate students, and also people that live in tech hubs like CA and NY. It is an overt attack against startups and other portions of the economy that have created most of the economic growth in the US over the last two decades.)
This policy has a) nothing to do with regulators or a regulatory agency, and b) is not a result of a regulated industry subverting the agent of it's regulation.
Also, the 100k cap you're complaining about already exists. I'm not sure what your rant even means at this point.
My arguments exactly mirror what he/she has said.