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people who get RSUs in California pay about 50% (state plus federal) tax on it. Where is that tax break again?

My read was that the _companies_ get the tax break. The employees get taxed to shit, but it's still better than not getting the RSUs.

I don't think that's true, other than the value of the RSUs being counted as an expense against earnings (like Salary would be).

I wouldn't be surprised if RSUs were not included in payroll taxes.