[HN Gopher] San Francisco voters approve taxes on highly paid CE...
___________________________________________________________________
San Francisco voters approve taxes on highly paid CEOs, big
businesses
Author : Circumnavigate
Score : 224 points
Date : 2020-11-05 19:34 UTC (3 hours ago)
(HTM) web link (www.latimes.com)
(TXT) w3m dump (www.latimes.com)
| d33lio wrote:
| With policies like this, why would anyone in their right mind (I
| say this as a staunch progressive) start a business in SF or even
| consider traveling to the Bay Area for the benefits of huge
| equity packages? Even if you choose to willingly ignore that CA
| state taxes are also increasing substantially.
|
| I hate to say it, but when you do things like this to Big
| Business TM it DOES have trickle down effects that negatively
| affect small business owners and business services alike.
| bdibs wrote:
| > He dismisses fears that the surcharge will drive companies
| out of the city, saying the tax is modest in comparison to the
| cost of moving a business.
|
| It doesn't seem like they're too worried about new businesses,
| they're just trying to hold the current ones hostage.
| jedberg wrote:
| To everyone saying, "this will kill low wage jobs", most
| companies already outsource their low wage jobs. Their janitors
| and cooks and maintenance people are already via contractors.
| Their lowest paid employees are most likely their admin
| assistants at $50K a year.
|
| So basically this is targeting companies whose CEOs make over
| $50M a year, which is basically Twitter, Pinterest, Google,
| Facebook, Uber and a few others that actually have an office in
| San Francisco.
|
| And I'm sure Google and Facebook et. al will fight them over how
| much money they "make" in San Francisco.
| diebeforei485 wrote:
| Not all of them. Some baristas and cooks were directly employed
| by the company, but certainly there is even less incentive to
| do that now.
| csomar wrote:
| Google and Facebook are in the SF Bay Area and not in SF City.
| Also, Zuckerberg gets a $1 salary. Unless this law targets full
| compensation (stocks included), it's not going to touch him. FB
| is too big to accept a 0.1% or 0.6% gross tax. This law is
| targeting smaller companies (think Stripe and similar).
|
| San Jose is an alternative for the CEO/Headquarters. There
| could be a minor office in the city where tech workers prefer
| to live, or they could commute down instead of up. Imo, SF City
| is overplaying their hand here and might be in a bit of a shock
| for the reality of how business works. The last bubble and good
| times might have distorted their understanding.
| jedberg wrote:
| The law says any company operating in SF, which would include
| FB and Google, who have offices there.
|
| Also the law says all compensation, including stocks and
| bonuses. So Zuck would definitely qualify.
| csomar wrote:
| Thanks for the clarification. But any company operating in
| SF is a bit crazy. So if a bank has a branch/office in SF,
| then it's liable for this tax? For all their gross income
| or just for the income generated within city boundaries?
| jedberg wrote:
| The law says just money they make in the city. But it's
| kind of vague and I'm sure there will be a lot of debate
| between the companies and the city about how much they
| are making in the city.
|
| The medium size businesses that only operate in SF will
| be screwed the worst.
| CountSessine wrote:
| _The law says any company operating in SF, which would
| include FB and Google, who have offices there._
|
| Very interesting, but, does that mean that execs who don't
| personally work in SF are subject to the tax? Ie, will
| Citibank's Michael Corbat, working out of Citigroup's New
| York offices, need to pay the tax because Citibank has bank
| branches in SF?
| jedberg wrote:
| I'm not a lawyer or accountant, but my layman's reading
| of the law says it is a tax on gross receipts for the
| company in San Francisco, not the CEO directly. But
| applies if anyone who works for the company makes more
| than 100x the median.
|
| I'm really not sure how they plan to enforce this at all.
| easde wrote:
| BTW, Stripe has already left San Francisco for South San
| Francisco (which is a different city).
| csomar wrote:
| That was fast. Unless this tax targets all of the bay area,
| the moving cost is not really much and your workers could
| still commute with a WFH option. Imo, San Jose is in prime
| position to build a real city with the possible exodus from
| SF.
| jedberg wrote:
| > San Jose is in prime position to build a real city
|
| San Jose is already 25% bigger than SF. It's the third
| largest city in California after Los Angeles and San
| Diego.
| wow_yes wrote:
| Population essentially doesn't matter - people are
| talking about density here. For example, Phoenix is
| essentially an enormous suburb with giant malls, and you
| never hear of despite its population numbers. Boston is a
| small city with rich urban life that occupies an outsize
| role in the American psyche.
| csomar wrote:
| The suburbs in San Jose are more developed than the city
| itself, where there isn't much action. That's what
| attract people to SF.
| cody3222 wrote:
| Yes, it includes stock options, property, etc. Basically all
| compensation.
|
| Source: https://calmatters.org/california-divide/2020/11/san-
| francis...
| stickfigure wrote:
| Is Facebook still giving Zuck bonuses or new stock issues?
| Isn't Zuckerberg's wealth composed entirely of stock that
| he already owns? So how is this going to affect Facebook?
| jedberg wrote:
| His income in 2020 was listed at $23M, all under "other
| income", mostly for the costs Facebook paid for his
| personal security and personal air travel on the
| corporate jet.
|
| But he wasn't the highest paid exec. Sheryl Sandberg was,
| at $30M. Probably still not high enough to trigger the
| tax.
| gnicholas wrote:
| This appears to just target salaries, not SBC. [1] Considering
| how large a role SBC plays in executive comp, it seems like this
| law will not be as impactful as if it looked at total comp. Am I
| reading this incorrectly?
|
| I would note that it would be difficult to assess the FMV of
| different SBC for the purposes of these calculations. For
| example, engineers might get RSUs, and the CEO might get options
| with a particular strike price, or different amounts of RSUs
| based on hitting revenue/profitability targets. It wouldn't be
| simple to value each of these things a priori, and companies
| wouldn't just accept whatever value the SF govt employees come up
| if it means huge amounts of additional tax.
|
| 1:
| https://ballotpedia.org/San_Francisco,_California,_Propositi...
| WalterBright wrote:
| > He dismisses fears that the surcharge will drive companies out
| of the city, saying the tax is modest in comparison to the cost
| of moving a business.
|
| Perhaps - but it will discourage new businesses from locating
| there, and new businesses are the future.
| bradlys wrote:
| Let me weigh the pros/cons here:
|
| Pros: lots of funding, lots of experienced employees who have
| taken companies from seed to IPO, probably a higher chance than
| some other areas to go from well off to ridiculously rich
|
| Cons: I get taxed more if I start making 200x what the average
| employee in my company makes.
|
| Can you see how no one would care unless they're 100% sure
| they're gonna be making 200x what their average employee makes
| regardless of where they put their business?
| WalterBright wrote:
| They don't need to be 100% sure at all. The whole point of
| the startup is to get ridiculously rich.
| reidjs wrote:
| This reminds me of that episode of South Park where they
| form a band but refuse to play until internet music piracy
| stops. I doubt that someone talented enough to build that
| kind of company is going to factor this into their decision
| to run it from SF.
| conanbatt wrote:
| The alternative is not having the office in SF.
| franklampard wrote:
| SF has so much tax revenue, but where is it spent?
| tmcw wrote:
| https://sfmayor.org/sites/default/files/CSF_Budget_Book_June...
|
| Trains, streets, cops, hospitals, public works, 31k employees,
| and so on.
| newhkusers1 wrote:
| Homeless services takes a big cut.
| tschellenbach wrote:
| City that depends on high paid tech workers to pay for their
| inefficient public sector approves law to encourage those tech
| workers to leave...
| [deleted]
| offtop5 wrote:
| Feels like a great way to encourage companies to leave the state.
|
| I left California many years ago. Every single part of my life is
| much better. Fiscally , romantically, mentally. SF over values
| how essential location is. With Covid it's clear remote work is
| the future, base the company out of Delaware and go full remote
| bambax wrote:
| This is the eternal objection to measures like this. But if
| every city and every state implement this, where will they go?
| And even if not, will they actually move? Will companies move?
| Time will tell but it seems very doubtful.
| forest_dweller wrote:
| > This is the eternal objection to measures like this. But if
| every city and every state implement this, where will they
| go?
|
| To another country. The world is a big place, there are also
| a number of tax havens that are relics of the British Empire,
| there will be other countries which will quite happily have
| large tech business move there.
|
| None of these measures have the intended consequence (usually
| the opposite happens). All it ever does it make it look like
| the politicians are doing something.
| toyg wrote:
| I keep waiting for the tech scene to explode in Grand
| Cayman or something, but it doesn't seem to be happening
| for some reason. It's all just lawyers and scammers.
| forest_dweller wrote:
| Gibraltar has plenty of tech companies for financial and
| gambling. Singapore is the same but I am not sure about
| how the tax works there.
|
| In any event I am not saying companies will move there
| necessarily (it was just an example I took off the top of
| my head) but they will move parts of the business around
| to be tax efficient. I do it with my own tiny business to
| be tax efficient.
|
| As I said the world is a big place and companies will
| just move somewhere else if they deem it to be worth the
| move.
| mrits wrote:
| Most cities are giving incentives to grow. The exact opposite
| of what SF is doing.
| offtop5 wrote:
| Base the company out of a conservative State. The employees
| can work wherever.
|
| The other issue is how much complying with this regulation is
| going to cost. California is already very very anti business
| after all
| dragonwriter wrote:
| > Feels like a great way to encourage companies to leave the
| state.
|
| Well, leave the City and County of San Francisco, maybe. But it
| wasn't that long ago that SF proper wasn't even considered part
| of Silicon Valley and the associated tech hub, anyway, though
| it was close enough that a lot of the conferences, etc., were
| there. And most of the big SV firms _still_ aren 't actually in
| SF.
| tlogan wrote:
| This kind of taxes are easily gamed (outsource low paid
| employees, etc.). It might actually be good for a big business
| because all 'normal' employees will be via temp agencies.
| gotoeleven wrote:
| I'm glad to see San Francisco is deciding which voluntary
| arrangements among private citizens should be penalized. Their
| governance has been consistently Solomonic.
| baggy_trough wrote:
| Otherwise known as the "fire your lowest paid San Francisco
| employees" bill.
| standardUser wrote:
| This is a small tax and should be considered a pilot program for
| an idea that's been around a long time. Are all of the criticism
| on here valid? We'll find out soon enough. Will a tax like this
| actually change behavior in desired ways, or provide a useful
| amount of revenue? We'll find that out, too.
|
| But what this tax will _not_ do is change the very nature of San
| Francisco or dramatically alter its business environment. The tax
| is just too small for that to be the case. It 's a tiny addition
| to a vast and complex and ever-changing web of taxes and
| regulations that large businesses in SF have been successfully
| dealing with for generations.
| echelon wrote:
| > But what this tax will not do is change the very nature of
| San Francisco or dramatically alter its business environment.
|
| Businesses are _already_ leaving SF. If they haven 't seen the
| writing on the wall, they're ignorant.
|
| SF has itself to blame. They squandered revenue, didn't fix
| real issues, and pandered to land owners.
|
| Businesses will move to more business friendly cities, and they
| will become more distributed - it's cheaper and easier to
| negotiate that way.
|
| SF is done.
| standardUser wrote:
| "Businesses are already leaving SF"
|
| San Francisco has been a global epicenter of new business
| creation in the past couple decades. Some of the most massive
| corporations on the planet have come to and expanded in SF in
| that time. Office rents have _skyrocketed_ as a result, as
| has new office construction.
|
| You're entitled to your own opinion, but don't lie.
| Hydraulix989 wrote:
| Don't CEOs only take $1 in salary anyways to keep their income
| taxes as low as possible and optimize for long-term capital gains
| through stock compensation instead?
| knappe wrote:
| Please at least try and read the article before commenting.
|
| "Under the measure, gross receipts and CEO compensation will
| include money made from stock options, bonuses, tax refunds,
| and property, a caveat seen by many as a way to target the tech
| sector where CEOs are often compensated in non-salaried
| bonuses."
| diebeforei485 wrote:
| It's still a valid point that stock-based compensation is not
| easy to compute. RSU's might be, but options are not.
| thrill wrote:
| Yeah, that won't have any unexpected effects. U-Haul is 20x what
| it was 20 years ago. How much higher can it go.
| yboris wrote:
| Could you share a bit more context? What happened with U-Haul?
| macinjosh wrote:
| I am not OP but my take is that hordes have been movin out of
| California to escape from taxes and regulations. Often they
| leave in a U-Haul, making it a booming business.
| thrill wrote:
| In a society that has reasonably established freedom of
| movement, which the US Constitution does fairly well,
| sufficiently onerous policies, where the sufficiently part is
| decided by those who bear the payment burden and not by the
| levier, eventually result in the target actively deciding to
| exercise that right to just leave. It's a big country, and
| there are many nice places in it where a decent life can be
| lived with less burden. U-Haul's stock price increase over
| the last two decades can be viewed as fairly reflecting such
| inter-state movement.
| brigade wrote:
| ...why? The last 4x increase was 2012-2015, then it's been
| pretty stagnant since then. So has inter-state movement
| been stagnant for the last 5 years?
|
| 2006-2011 was the housing crash and recovery; it doesn't
| seem like an outlier from the overall stock market. Before
| that, it collapsed from 2000 to 2003, then gained 5x over
| its previous highs from 2003-2006.
| suyash wrote:
| How do they determine that, does the CEO has to be a SF resident
| or the company's HQ has to be SF based?
| diebeforei485 wrote:
| Neither. It's just the CEO's compensation (no idea how they
| compute this, given global exchange rates and stock options) vs
| the median pay of SF-based employees.
| [deleted]
| GhostVII wrote:
| San Francisco's solution to everything seems to be to just keep
| raising taxes, and throwing money at things which don't work. At
| some point you have to realize that more money isn't always the
| solution, you actually have to fix your beurocracy. It's insane
| to me that the city with so many rich people and incredibly
| valuable companies is such a mess, your telling me that a small
| city with an incredibly wealthy population can't figure out how
| to keep the tenderloin from being full of tents and open drug
| use? Or get some form of functioning public transit? Pretty
| pathetic.
| burlesona wrote:
| It's much harder to repeal laws, remove committees, stop
| wasteful procedures etc. than it is to introduce those things.
|
| This is a big problem at all levels of government, but
| particularly in California where the voters can (and do)
| directly create policies and programs via propositions.
|
| If we were half as good at removing unhelpful laws and programs
| as we were at creating them, we'd all be a lot happier.
| dheera wrote:
| > a small city with an incredibly wealthy population can't
| figure out how to keep the tenderloin from being full of tents
| and open drug use?
|
| The wealthy people avoid walking through the Tenderloin. They
| spend their time in the Battery and the Modernist. They have no
| incentive to fix the situation there. None. Zero.
|
| This isn't Europe where wealthy people enjoy a stroll downtown,
| and have some incentive to want to keep their downtown nice.
| The wealthy people in SF just go to Napa and take their stroll
| in a vineyard over there instead.
|
| > Or get some form of functioning public transit?
|
| The wealthy people don't use public transit, they just drive
| everywhere or Uber everywhere. Again, they have zero incentive.
|
| To be clear, I _really_ want these issues to be fixed, just
| stating the facts of the situation.
| trentnix wrote:
| Government is a beast whose appetite is never satiated. Such is
| the consequence of Pournelle's Iron Law of Bureaucracy:
|
| _First, there will be those who are devoted to the goals of
| the organization. Examples are dedicated classroom teachers in
| an educational bureaucracy, many of the engineers and launch
| technicians and scientists at NASA, even some agricultural
| scientists and advisors in the former Soviet Union collective
| farming administration.
|
| Secondly, there will be those dedicated to the organization
| itself. Examples are many of the administrators in the
| education system, many professors of education, many teachers
| union officials, much of the NASA headquarters staff, etc.
|
| The Iron Law states that in every case the second group will
| gain and keep control of the organization. It will write the
| rules, and control promotions within the organization._
| rcpt wrote:
| Luckily a San Franciscan figured it all out over one hundred
| years ago so we don't have to wonder about this:
|
| > THE GREAT PROBLEM IS SOLVED. We are able to explain social
| phenomena that have appalled philanthropists and perplexed
| statesmen all over the civilized world. We have found the
| reason why wages constantly tend to a minimum, giving but a
| bare living, despite increase in productive power:
|
| > As productive power increases, rent tends to increase even
| more -- constantly forcing down wages.
|
| > Advancing civilization tends to increase the power of human
| labor to satisfy human desires. We should be able to eliminate
| poverty. But workers cannot reap these benefits because they
| are intercepted. Land is necessary to labor. When it has been
| reduced to private ownership, the increased productivity of
| labor only increases rent. Thus, all the advantages of progress
| go to those who own land. Wages do not increase -- wages cannot
| increase. The more labor produces, the more it must pay for the
| opportunity to make anything at all.
|
| A land value tax fixes our problems but Californians went and
| voted in Prop 13 which is about as far from that as you can
| get. http://www.henrygeorge.org/pchp23.htm
| sadfev wrote:
| Honestly this not a bad move. It incentivizes the right behavior
| and the extra levy isn't ludicrous.
|
| I am as libertarian as it comes but this looks like a
| proportionate response to pay disparity and a way to generate
| extra $$.
|
| That being said I am skeptical of it being very successful in
| either of its goals.
| thrill wrote:
| "libertarian as it comes" : "proportionate response" : "pay
| disparity"
|
| Wikipedia: "In modern politics, liberty is the state of being
| free within society from control or oppressive restrictions
| imposed by authority on one's way of life, behavior, or
| political views."
| MattGaiser wrote:
| So lay off all non professional workers and replace them with
| temps and contractors?
| throwaway0a5e wrote:
| Sounds like business will be booming for temp agencies as well as
| janitorial and facilities maintenance contractors.
|
| Whatever the net positive here is wholly negated by the number of
| stable long term jobs that are going to go away and be replaced
| by whoever the body shop chooses to send that day. Working for
| these middle men really sucks compared to working for whoever the
| service is being provided for (and I say that from experience).
| gcheong wrote:
| CEO compensation historically wasn't orders of magnitude
| greater than worker pay like it has ballooned to today and
| there were plenty of long term jobs. This just formalizes the
| idea that there shouldn't be an egregious difference in
| compensation that was commonplace before the idea that a
| corporation's sole purpose is to maximize shareholder value
| became the main driver of CEO compensation.
| rm_-rf_slash wrote:
| I think you missed parent's point, which is that companies
| will have (yet another) incentive to replace their lowest
| paid workers with contractors.
|
| First they came for the janitors, but I did not speak up, for
| I was not a janitor...
| gcheong wrote:
| So how does one "speak up" as a janitor then? I think as
| long as maximizing shareholder value is the dominant
| incentive of corporations, your job will always be at risk
| of being outsourced unless you have either a clear
| competitive advantage or a strong collective bargaining
| ability.
| XorNot wrote:
| I'm completely at a loss as to why they wouldn't have
| already done as much of this as it was conceivably possible
| to do right now - or wouldn't get there eventually.
|
| Companies don't pay you more money because they CEO looks
| at his salary and goes "yeah I think I have enough".
| bluGill wrote:
| Because outsource vs in house is not a simple decision.
| there are many factors each with a set of pros and cons.
|
| Sometimes outsourcing lets "them" focus on efficiency and
| getting the details right and so you are better off.
| Sometimes out sourcing cuts quality to get better costs.
|
| There are many accountants, it is relatively standard
| across industries, and so you can outsource it all easily
| - but most big companies have it in house anyway. (though
| they will hire out some of the grunt work) This is one
| area where messing up will kill your company so you
| better keep a close eye on it. (An accountant can easily
| steel enough money that you can't maintain cash flow -
| you might get the accountant in prison but your great
| company is bankrupt anyway). This is but one example of
| many cases where out sourcing is bad.
|
| On the other side power utilities outsource most tree
| trimming around power lines. The companies that do this
| work give the utility a great deal because the contract
| that keeps their crews busy 3/4ths of the year which is
| important because most of this type of work is right
| after a storm and employees are easier to keep when they
| aren't laid off 3/4ths of the year waiting on the next
| job.
|
| When an out sourcing is borderline not worth it because
| of risks above it, it may become worth it after this
| change.
| another-dave wrote:
| It would be good if they said something like "staff from
| other companies who spend more than 50% of their work week
| at your office will be included in your company average
| wages, even if hired through a subcontractor" -- like
| residency requirements but for employees -- to cover
| catering/security/reception jobs etc. that may get
| outsourced.
| gumby wrote:
| The total amount is so small I have a hard time believing that
| anyone would restructure their operations around it.
| umeshunni wrote:
| More likely, this will just result in businesses continuing to
| leave San Francisco.
|
| The pandemic has given most companies a good reason to do so
| already and my bet is on most of them not returning to their
| overpriced San Francisco headquarters when this is eventually
| over.
| kmtrowbr wrote:
| I have lived in San Francisco since 2005. Over the time I've
| lived here, we've had the opposite problem: lots of highly
| paid tech firms moving into SF. This has changed the nature
| of San Francisco in a way that many dislike, including me. I
| was initially attracted to San Francisco because, it was
| chill, it was beautiful, and it had a lot of eccentric,
| really interesting people. Many of our good friends had to
| leave over the years as SF has becoming more unlivable
| because rents have gone up so much, and also it's just not as
| fun, it's crowded and stressed.
|
| I am aware that I am a part of the problem: my wife and I are
| white, yuppie, dink tech workers. :)
|
| These issues are complex.
|
| I voted yes on Proposition L: the tax is quite small and I
| think the tech firms are unlikely to leave, meanwhile SF can
| get more taxes from them (many of them were historically
| given tax breaks, like Twitter, to move into the mid-market
| area). If they do leave, I don't see that as a bad thing.
|
| Meanwhile socioeconomic disparity is an oozing sore in San
| Francisco, we have billionaires rubbing elbows with homeless
| people every day. Nationally, we've had round after round of
| tax cuts for the wealthiest, if SF wants to tax excessive
| income disparity, I say, fair enough.
| macspoofing wrote:
| >we've had the opposite problem: lots of highly paid tech
| firms moving into SF.
|
| Quite the problem ... the kind of problem that multitudes
| of cities and regions in the world are desperately trying
| to recreate.
|
| >This has changed the nature of San Francisco in a way that
| many dislike, including me.
|
| This is where progressives don't live up to their name. The
| nature of cities is constant change. Meanwhile the
| activists are desperately trying to keep change to a
| minimum so that the character of neighborhoods never
| changes. It's an interesting dichotomy.
|
| >because rents have gone up so much, and also it's just not
| as fun, it's crowded and stressed.
|
| Rents will drop if you increase density ... but that would
| mean building higher density housing and thereby accepting
| that the character of cities and neighborhoods change.
|
| >I am aware that I am a part of the problem: my wife and I
| are white, yuppie, dink tech workers. :)
|
| The fact that you're white and a tech worker isn't the
| problem. It's that you had the opportunity to move to San
| Fransciso for work due to the tech boom, and now you're
| trying to pull the ladder up so others cannot do the same.
| rbranson wrote:
| > The fact that you're white and a tech worker isn't the
| problem. It's that you had the opportunity to move to San
| Fransciso for work due to the tech boom, and now you're
| trying to pull the ladder up so others cannot do the
| same.
|
| This is quite the ad hominem. I may have missed it, but
| I'm not sure where OP said anything about density or
| housing. Is there something wrong with not wanting the
| city that you love to be invaded by the human version of
| a swarm of locusts?
| fuzxi wrote:
| >Is there something wrong with not wanting the city that
| you love to be invaded by the human version of a swarm of
| locusts?
|
| He is, by his own admission, one of those locusts.
| wbl wrote:
| Ah yes, men and women who look at human needs and decide
| to serve them in exchange for compensation on the basis
| of voluntary exchange are just like insects that being
| multitudes into destitution and misery.
| heavyset_go wrote:
| I see nothing in the OP's post that suggests that they're
| against re-zoning, building high density housing, or
| other measures to remove barriers against cheaper
| housing.
| swiley wrote:
| >Rents will drop if you increase density ... but that
| would mean building higher density housing and thereby
| accepting that the character of cities and neighborhoods
| change.
|
| I keep hearing proponents of strict exclusionary zoning
| laws arguing that they don't like the risk of having the
| value of their investment decrease because of this. SF
| will be a great example of how change happens weather you
| like it or not and allowing dense housing is what makes
| the change good or bad. You either sacrifice some of the
| view or sacrifice not having homeless camps.
| kansface wrote:
| > if SF wants to tax excessive income disparity, I say,
| fair enough.
|
| None of the billionaires here made that money from their
| salary. This will not touch them at all.
|
| > If they do leave, I don't see that as a bad thing.
|
| Chasing away jobs and the tax base will not end well. There
| is a decent chance SF enters a financial death spiral from
| its pension obligations. At the very least, massive cuts
| are in order. SF will not be transformed magically back to
| the year 2005, but it could very well wind up back in the
| 70s.
| duhuh wrote:
| That's fine. The SF people think is SF, that used to be
| SF, does really well with 700,000 people and everyone
| with a shitty job.
| singron wrote:
| The text of the measure refers to "compensation", of
| which it gives a specific definition that includes
| commissions, bonuses, and equity (specifically mentioning
| stock options). The $1 salary CEO isn't excluded if they
| also have a huge equity package.
|
| Although it doesn't mention capital gains, so if the CEO
| owns a significant part of their company already and
| doesn't have an additional vesting schedule, then they
| could make personal income from appreciation of the
| business that wouldn't be counted towards this bill.
| kangaroozach wrote:
| Paper gains are not realized gains. So it's all about
| timing. At what point in time do they check to do the
| math?
| drak0n1c wrote:
| Taxes tend to increase price levels, not reduce them. Costs
| are passed through to every level.
| heavyset_go wrote:
| Prices are not determined by costs, but what the market
| will bear.
| gmadsen wrote:
| not 1-1.
|
| a personal wealth tax is not felt or distributed down
| lane. As long as it is not a company tax, it will not be
| directly pointed to the buyer.
| kansface wrote:
| > The tax will levy an extra 0.1% to 0.6% on gross
| receipts made in San Francisco for companies ...
| stale2002 wrote:
| > personal wealth tax is not felt
|
| Yes it would be. A tax on salaries, would force companies
| to have to pay more to attract talent.
|
| And these are additional costs that the company would
| have to pay.
| Retric wrote:
| It's not that simple. You can't pass on taxes on profits.
| If hypothetically charging 57$ maximizes profits then
| raising prices just lowers profits.
|
| Alternatively, if some aspect of your process like sugar
| is taxed then companies seek alternatives like corn
| syrup. That extends to property taxes, executive pay, etc
| where companies seek alternatives to better utilize
| resources. Though in the case of salaries that my end up
| as various executive perks.
| [deleted]
| wpietri wrote:
| Same. I think it's fine if some businesses leave SF, and
| even more fine if their staff spread out. Given all our
| talk of internet-driven disruption and the world-changing
| nature of electronic communication, it's always been
| ridiculous that we had to cram everybody together in 0.01%
| of the US's land area.
| walshemj wrote:
| But they voted to screw low paid uber drivers out of
| employment rights - talk about "presentism"
| thrill wrote:
| If you think white yuppie tech workers are part of the
| problem, then you are indeed part of the problem.
| jseliger wrote:
| _Over the time I 've lived here, we've had the opposite
| problem: lots of highly paid tech firms moving into SF.
| This has changed the nature of San Francisco in a way that
| many dislike,_
|
| San Francisco's huge, number one problem has been and still
| is that it makes building new housing illegal:
| https://techcrunch.com/2014/04/14/sf-housing/.
|
| Increase supply and prices will eventually fall. This is
| not a complicated problem and the relationship between
| supply, demand, and price has been known since the time of
| Adam Smith. https://news.ycombinator.com/item?id=16704501
| shuckles wrote:
| Your comment seems to lack understanding of both the tax
| and San Francisco's problems. The tax would not apply to
| Twitter, and the Mid-Market tax break was tiny at about
| ~$50m over its entire life. In addition, all the inequality
| issues in San Francisco are of its own making: the city
| began pricing out median income households 40 years ago
| while the Federal government was simultaneously subsidizing
| long commutes. Therefore, the only people left are those
| who benefit from proximity to high paying jobs or those who
| benefit from the city's social services more than they
| value moving to lower COL places like, e.g., Phoenix.
| cheriot wrote:
| I've seen people take that position and I see a fundamental
| mistake. Look at rust belt cities. Look at NYC in the 70s.
| When employers leave the people left behind are not better
| off. This doesn't mean we need to kiss big tech ass, but we
| have a city where getting a job is a solved problem. Very
| few places on earth have that.
|
| Rent prices are the underlying problem pushing people out.
| Underlying _that_ problem is a lack of supply. SF zoned for
| and issued permits for a large number of offices, but not
| the corresponding residential structures to house those new
| workers. So they came here and were forced to compete with
| existing residents for a place to live.
|
| The fix is to keep the economic prosperity and build more
| housing.
|
| > Meanwhile socioeconomic disparity is an oozing sore in
| San Francisco
|
| I'd argue that mixed income neighborhoods are the best
| kind. Many of the mechanisms for disadvantaging poor
| communities require geographic segregation. School quality,
| policing practices, etc
| rcpt wrote:
| > Underlying _that_ problem is a lack of supply
|
| And underlying that problem is Prop 13 - the insane multi
| billion dollar tax break that Californians bestowed on
| all land speculators. Until it's gone nothing will
| change.
| cheriot wrote:
| Prop 13 is fucking horrible. We can't blame it for
| everything, though. It doesn't stop SF from zoning for
| more residential units or allowing the existing ones to
| be subdivided. All of those new units pay full freight.
| rcpt wrote:
| Zoning laws aren't laws of physics. People make those up
| to align with what works best for them. Prop 13 strongly
| incentivizes less housing (because it boosts voters asset
| values with no downside to homeowners) and more
| commercial (because cities now rely on sales taxes to
| stay functional).
|
| Until the landowners start to feel some downside from the
| housing disaster don't expect anything to change.
| volume wrote:
| > The fix is to keep the economic prosperity and build
| more housing.
|
| That makes sense to me. I don't keep up with exact SF
| policies but I'm guessing there are zoning and the NIMBY
| factor to deal with.
|
| Underlying this problem is? Money, influence and power? I
| know a soon to be ex-POTUS that might be the perfect man
| for the job! He can come in and cut all deals needed.
| Then SF is saved and then he goes from city to city and
| country to country to redeem himself.
| cheriot wrote:
| Yes, NIMBY zoning and a planning process that makes even
| zoning compliant projects difficult to impossible.
|
| The Board of Supervisors are elected from districts
| instead of city wide. This means they're heavily
| influenced by neighborhood associations with a vested
| interest in maintaining the status quo. Throw in the
| normal, human fear of change and... the result isn't
| pretty.
| dragonwriter wrote:
| > the tech firms are unlikely to leave, meanwhile SF can
| get more taxes from them (many of them were historically
| given tax breaks, like Twitter, to move into the mid-market
| area).
|
| Twitter's highest paid executive looks like they make
| something in the $7M range (Dorsey's total comp is
| approximately zero for several years, as he is counting
| entirely on capital returns on his investment, not
| compensation from the firm); I'm doubting that their median
| SF pay is below ~$70K.
| umeshunni wrote:
| Around 2007, a gentleman named Steve Jobs invented the
| iPhone and unleashed another tech boom, driven primarily by
| the increased adoption and use of the smartphone and apps
| within them.
|
| The spoils from this boom primarily benefited companies and
| people based in and around the Bay Area. People there
| didn't realize that the rest of the country (and much of
| the developed world) were still struggling and haven't
| fully recovered from the 2008-10 recession. The increased
| prosperity and resulting tax base growth papered over the
| fundamental mismanagement and poor governance in that area.
| Some of the highest incomes and highest taxes in the
| country and yet some of the most dilapidated
| infrastructure, highest poverty rates and poorest quality
| of life in the country. "European taxes and third world
| quality of life" is how I describe the area to people.
|
| Yet, people moved here for the jobs and then new jobs
| followed the people.
|
| 14 years (i.e. half a generation) since then and at the
| beginning of what is another major recession and economic
| reset, it's perhaps difficult for most people to imaging
| that the appeal of the area has diminished and that things
| aren't magically going back to 2019. People have moved out,
| companies are hiring elsewhere, the tax base is down >50%
| and budgets are deep in the red. The local governments can
| try and raise taxes to squeeze a few million more here and
| there, but fundamentally, they will have to cut waste and
| cut spending in the next few years to survive.
|
| I'm not saying SF is going to become the next Detroit, but
| I remember NYC in the 70s or Seattle post-Boeing (also,
| early 70s) as an example of what happens to cities when a
| major industry leaves town. It's a death spiral of lower
| tax collection -> poorer services -> more people leaving.
| throwaway0a5e wrote:
| >The increased prosperity and resulting tax base growth
| papered over the fundamental mismanagement and poor
| governance in that area
|
| This applies to sooooo many cities. I think money beyond
| the level required to provide basic services just gets
| wasted and the citizens see nearly nothing from it. It's
| so common it seems like some fundamental law of the
| universe.
| heavyset_go wrote:
| I doubt it. The purported reasons to leave were already on
| the table before the pandemic hit, but they were not enough
| to do so when compared to the reasons for staying. The
| pandemic is relatively temporary, and once it is over, those
| reasons for staying will still be on the table.
| TedDoesntTalk wrote:
| > The pandemic is relatively temporary
|
| Until the next ones comes. That could be in 1 year or 100
| years. No one knows.
|
| Reminds me of the repeated hurricanes that drive people out
| of coastal areas.
| heavyset_go wrote:
| > _Reminds me of the repeated hurricanes that drive
| people out of coastal areas._
|
| People still live in coastal areas, and rich people
| continue to build lavish vacation homes on the coast
| despite the fact that they're washed away by storms every
| couple of decades. Part of being rich is not having to
| worry about money, which is why many rich people live in
| cities, states and countries that tax them more: the
| benefits of doing so outweigh the costs. I think you can
| draw parallels between that and companies choosing to
| remain in cities for similar reasons despite some
| drawbacks existing.
| gmadsen wrote:
| I don't understand why this is said as a negative.
|
| Tech needs to expand to other parts of the country. If SF
| wants high taxes, so be it, let all participate in the
| competition of where to be located.
| rm_-rf_slash wrote:
| Or just move it to a smaller office somewhere else in the Bay
| Area.
| cobookman wrote:
| They said SF, not SF Bay area. I'm certain the city of SF
| will be seeing a loss of jobs as they move to Oakland, East
| Bay, Peninsula and South Bay.
| bluGill wrote:
| Maybe, but is the rest of the Bay area enough better that
| they can trust they won't end up the same way in the near
| future.
| shreyansj wrote:
| Damn! Pretty sure that the rest of the Bay Area isn't a
| dumpster fire either.
| clhodapp wrote:
| Contra Costa is full of open space and I believe that
| many of the cities from Walnut Creek out would bend over
| backwards to pull in these types of jobs.
| umeshunni wrote:
| There's a mini-silicon valley shaping up in the East Bay
| along the 580/680 corridor - towns like Dublin,
| Pleasanton etc are growing rapidly with existing
| companies and new ones - Oracle, Workday, Snowflake etc
| are all there.
|
| It helps that they are also much more new housing
| friendly than SF and SV.
| clhodapp wrote:
| Right! I wasn't thinking about stuff like Bishop Ranch
| being down there. Yeah, it really does seem like most of
| the freeway/transit-connected East Bay towns beyond the
| hills would be very amendable to this type of growth. It
| really seems like the only exception would be the arc
| from Orinda to Danville.
| newhkusers1 wrote:
| Yes, they are better. Also, this isn't the only silly tax
| law that SF has.
| ashtonkem wrote:
| It's hard to determine what'll happen due to pandemic +
| remote work, but historically nearby counties with lower
| taxes have always been the biggest risk for high tax
| municipalities. Think less "I'm leaving NYC to go to
| Michigan" and more "I'll move to New Jersey and commute
| into NYC".
|
| But again, the pandemic and rise of remote work makes this
| hard to predict.
| tlogan wrote:
| Maybe but outsourcing is much easier solution than
| relocating.
|
| Think about hedge funds, bond traders, etc. For example, they
| will be all firing desk support people and replacing them
| with RobertHalf.
| LinuxBender wrote:
| A law firm I use has been in SF for over 20 years. They just
| moved to a rough part of Oakland. The move was challenging
| for them and I know they would not have done it if they
| didn't have to.
| RangerScience wrote:
| Why did they have to move? This new law, or something else?
| LinuxBender wrote:
| This was in the middle of Covid, around the time many
| businesses and renters were leaving SF. They would not
| give me specifics, but I assume it no longer made
| financial sense to be in that expensive high-rise, as all
| the parking was locked down, forcing all the customers to
| take BART. I am not sure what affect this new law will
| have for those that remain.
| momokoko wrote:
| Sounds like you don't live in the Bay Area. Almost every tech
| job that isn't salary, and plenty of salary jobs, already are.
|
| It is standard practice in the Bay Area to use staffing
| agencies for everything but executives and core talent with all
| signs pointing to the practice becoming even more common well
| before this.
| _jal wrote:
| How many SF companies have FT in-house janitorial and
| facilities now?
|
| I've worked for a lot of (admittedly, tech startup) companies,
| and none of them have.
|
| For that matter, companies I've worked for who needed
| telephone-answerers or other low-compensation service workers
| have already spun that off into separate companies, for a
| similar reason - google '401K highly compensated employee' to
| see why.
| 908B64B197 wrote:
| Wait until a commercial robot-vacuum/robot cook provider comes
| along and underbids the temp agency.
|
| You can rent a robotic fry cook for 1'500$ a month from Miso
| Robotics [0]. I know somewhere someone is looking at a
| commercial-grade surface cleaner and trash-picking robot.
|
| [0] https://www.theverge.com/2020/10/6/21503892/miso-robotics-
| fl...
| cody3222 wrote:
| This raises some interesting questions / side effects:
|
| 1) Companies may now have a direct incentive to have their lowest
| income earners be outsourced/contracted out to boost the median
| pay amount.
|
| 2) It was smart of them to include compensation such as stock
| options. However if a city starts to expect this income, it will
| all go away in recessions when CEO's stock options are not
| valuable. ie more money to the city in boom periods and not much
| in bust cycles.
| throwaway2245 wrote:
| > Companies may now have a direct incentive to have their
| lowest income earners be outsourced/contracted
|
| The median was presumably chosen because it's relatively harder
| to shift in this way. Although this depends on the exact pay
| distribution of your company, you'd expect getting rid of
| people from the bottom to change the median person but not
| typically change the median value.
|
| (This is also a mature enough problem that I'd expect other
| provision in the law to prevent this - are we sure it doesn't
| include outsourced workforce pay?)
| cody3222 wrote:
| I bet it's actually easier to change the median. Often you'll
| scale a sales or support team (much lower cost than engineer)
| and these teams can often balloon especially if the company
| has a direct positive margin on their work (generally the
| case in sales). Now, 30% of the company is sales/support and
| there are quite a few options for outsourcing your sales team
| to a "professional sales company."
| thebean11 wrote:
| 2 is true of most forms of taxes though, although I agree this
| will likely add even more volatility to revenues
| xg15 wrote:
| 1) Lowest-income jobs that can easily be outsourced _are_ very
| likely already outsourced. If the company has the option to do
| this, why should it hold off doing so?
| cody3222 wrote:
| Like janitors, yes. However you can still go a level up,
| perhaps to support people. And then another level up, like to
| entry level sales people.
| colordrops wrote:
| CEOs are all just going to move out of San Francisco.
| ljm wrote:
| Maybe not a bad thing really
| rglullis wrote:
| Yeah, let the city collect taxes from all the woke
| millenials who are neck-deep in student debt and the
| homeless...
| ljm wrote:
| Or, move some of the obscene wealth away so the residents
| aren't gentrified out of existence, like they already
| have been? It won't just be CEOs, it'll be all the
| software engineers and the like too.
| dpoochieni wrote:
| How naive to think salaries are not paid out of that
| wealth
| stevehawk wrote:
| and five years from now i get to hear how it is everyone
| else's fault that real estate property prices fell in san
| francisco, which destroyed people's equity and retirement
| plans.
| dtech wrote:
| It's about the business location not the CEO, but the point
| stands. I'm not that familiar with US law, but can't a
| business be incorporated anywhere in the US/California and
| still do basically all its activity in SF?
| dragonwriter wrote:
| The tax is based on entities "engaging in business within
| the City as an administrative office" as defined elsewhere
| in city law (for the payroll tax component) or just plain
| "engaging in business in the City" (for the tax on gross
| receipts attributable to the City portion), not by place of
| incorporation, so, yes, a business can be incorporated
| anywhere else on the planet, and do basically all of its
| activity in San Francisco, but that's not going to limit
| its exposure to the tax.
| shuckles wrote:
| The tax doesn't care about where the CEO lives. It applies to
| any company that does business in San Francisco which has a
| CEO that meets the criteria.
| bradlys wrote:
| And to be clear, it's only on business _that is done in San
| Francisco_. Essentially, it 's going to turn into a sales
| tax for SF.
|
| > The tax will levy an extra 0.1% to 0.6% on gross receipts
| made in San Francisco for companies whose highest paid
| executive makes 100 times or more its median worker's
| salary. The amount levied will increase in 0.1% brackets
| proportionally to the pay ratio. A company whose highest
| paid employee earns 200 times more than its median San
| Francisco worker will get a extra 0.2% charge on its gross
| receipts. For companies whose CEO makes 300 more, the
| charge jumps to 0.3% and son on. The tax caps at 0.6%, and
| only companies with gross receipts over $1.17 million will
| be targeted.
| shuckles wrote:
| The interesting question, in my opinion, is whether
| Stripe's revenue from other San Francisco companies is
| considered gross receipts within the city or someplace in
| Delaware or Ireland.
| bradlys wrote:
| I'm sure they could figure out a way to get that revenue
| to be transferred elsewhere. That said, Stripe doesn't
| likely pay its CEO 100x the average employee wage since
| it's a pre-IPO company. The CEO likely earns a few
| million in raw $$$ and the average salary at Stripe is
| likely past $100k. So, I doubt it's a real issue.
|
| So, for now, it's probably a non-issue... and they have
| time to adjust.
| heavyset_go wrote:
| No they aren't. Part of being rich is not having to worry
| about money, which is why plenty of rich people live in
| cities, states and countries that tax them more: the benefits
| of doing so outweigh the costs.
| diebeforei485 wrote:
| The law doesn't care for the work location of the CEO. It
| could even be outside of the US, where exchange rates and
| different laws around stock based compensation could make
| this a nightmare.
| sethammons wrote:
| or just use hollywood accounting. You have a parent company
| with high paid employees. You have a separate company with
| low paid employees. Or move. Or change title.
| dylan604 wrote:
| I see the headlines now: Darling Startup Raises $20 million
| Series-A As First CEO-less Company
| lotsofpulp wrote:
| There are rules such as Common Ownership or Common Control
| that prevent that kind of avoidance. I'm sure SF can come
| up with something similar.
|
| https://www.law.cornell.edu/cfr/text/26/1.414(c)-4
|
| https://healthcareexchange.com/article/common-ownership-
| what...
|
| http://wkins.com/aca-common-ownership-rules-explained/
| Alupis wrote:
| And/Or move their companies too. Particularly all the "tech
| startups" that think they don't need physical office
| buildings anymore. For a lot of companies, SF is becoming
| difficult to justify.
|
| Well-intended ideas, not fully thought out, leading to
| unintended consequences... nothing really new for SF.
| vmception wrote:
| That's because the "mostest wokest" dont live in SF long
| enough to be bothered by the consequences of their votes.
| dicroce wrote:
| People in San Francisco have long been angry at tech
| workers for driving up prices... Driving them out may be on
| purpose!
| sadfev wrote:
| If that's the goal then I think this is a good
| initiative.
| thorwasdfasdf wrote:
| getting tech out of SF would actually do a lot of people
| good. I've worked at countless software companies and
| always wondered why the companies had to be located in the
| most expensive city in the US.
| vlovich123 wrote:
| Isn't it the most expensive city because of all the tech
| workers? Wherever you get a congregation you'll get that
| effect (as Austin and Colorado are finding out), and
| companies generally start where workers are available
| (that'a why film and entertainment industries are still
| largely is in LA, New York, London even if they film
| around the world)
| bluGill wrote:
| Only partially. You are correct that congregation does
| drive up prices. However congregation drives building
| more housing and other things which drives prices back
| down. SF has done less to drive prices back down than any
| other city and as a result has the most expensive
| housing. Eventually an equilibrium is reached (in
| practice this is false as things are always changing, but
| close enough)
| throwaway2245 wrote:
| I understood this to be the primary intended consequence!
|
| San Francisco is overheated and a majority of residents
| would expect to benefit from CEOs or tech companies
| reducing their pressure on housing and services.
| dpoochieni wrote:
| Then they will realize the majority of landlords already
| don't live there: domestic and foreign investors.
| stlava wrote:
| I doubt the city will see a penny from this. There's nothing in
| place to do an audit to figure out who should be taxed.
| cody3222 wrote:
| This raises some interesting questions / side effects:
|
| 1) Companies may now have a direct incentive to have their lowest
| income earners be outsourced/contracted out to boost the median
| pay amount.
|
| 2) It was smart of them to include compensation such as stock
| options. However if a city starts to expect this income, it will
| all go away in recessions when CEO's stock options are not
| valuable. ie more money to the city in boom periods and not much
| in bust cycles.
| xg15 wrote:
| The lowest income earners that can easily be outsourced are
| very likely already outsourced.
| sna1l wrote:
| The cynical side of me thinks that exec pay packages will just
| change to workaround this tax.
|
| For example, an exec's pay will be capped at 100x median worker
| salary, but just spread out across multiple years. As others have
| mentioned, temp agencies/contractors will also probably be
| utilized.
| jameslk wrote:
| Why do these discussions always revolve around the collection of
| taxes instead of how the taxes will be used? Would anyone be
| complaining if they knew the taxes would be more beneficial?
| Conversely, wouldn't we reject these new taxes if we knew they
| weren't going to be a greater benefit? Does anyone even know how
| the taxes will be used?
| cody3222 wrote:
| This is such a good point. It's as if the argument is that more
| taxes is good no matter what rather than knowing what/why
| you're taxing in the first place.
| jameslk wrote:
| Yes exactly, it's like everyone is arguing past each other
| with different assumptions about how taxes will be used. Take
| this quote from the article:
|
| > "We need the wealth that has been generated in the city to
| be shared more broadly with workers and residents"
|
| This person seems to assume the taxes will be shared with the
| workers and residents. Would they still support these taxes
| if that were not the case?
|
| Others (in this discussion) seem to think the taxes will be
| thrown at things that don't benefit the city. Maybe so? Would
| they be more supportive if they knew it was for something
| they believed in?
| cody3222 wrote:
| I absolutely love the historic example of taxes that
| Benjamin Franklin talks about in his biography: he says he
| went to all his neighbors' houses and asked if they wanted
| to chip in a nickel a week and have one of the neighborhood
| boys sweep the street for everyone's benefit every week.
| Most said yes and paid the fee. This is literally what tax
| is in the most simplistic form (let's pool our money to get
| something we couldn't otherwise have - military, roads,
| other infrastructure).
|
| Unfortunately, now we live in a world where we just talk
| about taxation for the sake of putting money into the pot
| and have no real idea or influence over how that pot of
| money is spent. A government that can move towards this
| Benjamin Franklin kind of simplicity of taxes would make
| its country such a better place.
| CountSessine wrote:
| _Does anyone even know how the taxes will be used?_
|
| To fund currently unfunded pension liabilities? To hire more
| city employees at above-market rates? To build new parks and
| roads? To fund public transportation?
|
| The money will be used for what it always is - some of it will
| be good and some of it won't be very good. Once it's in the
| pot, it gets stirred around and all sorts of people and
| projects get a full bowl. That's not what's interesting about
| this story - taxes get raised all the time by all sorts of
| authorities. What's interesting is that the tax is full of
| perverse incentives and may very well lead to lower, not higher
| tax receipts.
| jameslk wrote:
| > The money will be used for what it always is - some of it
| will be good and some of it won't be very good. Once it's in
| the pot, it gets stirred around and all sorts of people and
| projects get a full bowl. That's not what's interesting about
| this story - taxes get raised all the time by all sorts of
| authorities.
|
| Why is this not interesting to you? Just because it's the
| status quo of how things are done doesn't make it less of an
| issue to me. Maybe if we knew what pot of taxes were used for
| what causes, we could reason about their worthiness better.
| Just raising taxes for the sake of raising taxes seems like a
| meaningless and potentially regressive goal otherwise.
|
| > What's interesting is that the tax is full of perverse
| incentives and may very well lead to lower, not higher tax
| receipts.
|
| These things can both be interesting, which is my point.
| Spinnaker_ wrote:
| Is this just salary or total compensation? If it's just salary
| then it's easy enough to compensate the CEO in one of many other
| possible ways.
|
| I wonder if the median CEO will start making more. The going rate
| will become 99x approximately the SF average salary of 98k, or
| just under 10mm.
| newbie578 wrote:
| Why doesn't anyone want to address the elephant in the room,
| which is affordable housing?
|
| Why not convert vacant offices to apartments?
| 6gvONxR4sf7o wrote:
| In what way is nobody addressing the elephant in the room? That
| was a solid chunk of the propositions this year.
| lhorie wrote:
| That doesn't seem all that relevant to the topic of taxes, and
| even if it did, I don't believe there's a very good correlation
| between increases in CA taxes and improvements in the housing
| situation.
| Rebelgecko wrote:
| The amount of money that this is expected to bring is [?] to
| the size of SF's homelessness budget so it's not the biggest
| stretch to link them (although you could bring up lots of
| other issues to)
| yftsui wrote:
| If offices become vacant, what is the motivation to live in the
| city anyway?
| blackguardx wrote:
| Plenty of people commute in to work in non-tech jobs. Some of
| those folks would love to live in SF if rent was cheaper.
| dmitrygr wrote:
| there are many political reasons. i'll list some logistical
| ones:
|
| fire codes?
|
| not enough bathrooms?
|
| lack of showers?
| djrogers wrote:
| > not enough bathrooms? lack of showers?
|
| Err, plumbers exist, and showers and bathrooms are added to
| commercial buildings all the time. Nobody is suggesting
| simply telling people to live in existing office space as-is
| - converting them would include accounting for these things.
| diebeforei485 wrote:
| It is not easy to do this in most buildings. There are some
| examples (eg. 100 Van Ness) but it takes years and really
| was not as simple as people make it out to be.
| [deleted]
| ajmurmann wrote:
| Why not loosen building restrictions and allow to build new and
| high outside of a narrow downtown area? Why not loosen
| restrictions to build smaller, tenement-style units of there is
| demand?
| pc86 wrote:
| Does anyone have the text of the law, or a detailed description
| of it?
|
| > _Under a newly approved law, any company whose top executive
| earns 100 times more than its average worker will pay an extra
| 0.1% surcharge on its annual business-tax payment. If a CEO makes
| 200 times more than the average employee, the surcharge increases
| to 0.2%, and so on per multiple of 100._
|
| What do they mean by "earns," are bonuses included? Nonmonetary
| compensation like having your car or mortgage paid for directly?
| Increase in stock value that's part of your comp package?
|
| I'm sure folks will try to game this to get around it, I'm just
| curious how.
|
| Also it sounds like this is a surcharge on _taxes paid_ , not
| actually a new tax on revenue. So if you pay $1 million to the
| city of San Francisco in taxes, and your CEO earns exactly 100x
| more than the average worker, you now have to pay... $1,001,000?
| JumpCrisscross wrote:
| > _I 'm sure folks will try to game this to get around it, I'm
| just curious how_
|
| Lay off everyone making less than 200x the top earner. Move to
| remote workers where possible, outside contractors where not.
| ashtonkem wrote:
| Fire low paid workers such as support staff and outsource
| that to staffing agencies. That's the easiest way to game
| this number.
| gojomo wrote:
| Ensure your outsourcing is not in SF. The outsourcing firm
| CEO pays themself whatever damn multiple they like. Voila,
| SF keeps all the cushy jobs they like, makes the working
| poor someone else's problem.
| stevev wrote:
| A great way to push companies out of your state.
| hawkoy wrote:
| From: https://calmatters.org/california-divide/2020/11/san-
| francis...
|
| > The tax will levy an extra 0.1% to 0.6% on gross receipts made
| in San Francisco for companies whose highest paid executive makes
| 100 times or more its median worker's salary. The amount levied
| will increase in 0.1% brackets proportionally to the pay ratio. A
| company whose highest paid employee earns 200 times more than its
| median San Francisco worker will get a extra 0.2% charge on its
| gross receipts. For companies whose CEO makes 300 more, the
| charge jumps to 0.3% and son on. The tax caps at 0.6%, and only
| companies with gross receipts over $1.17 million will be
| targeted.
|
| > Under the measure, gross receipts and CEO compensation will
| include money made from stock options, bonuses, tax refunds, and
| property, a caveat seen by many as a way to target the tech
| sector where CEOs are often compensated in non-salaried bonuses.
| Tech is expected to account for 17% of the tax revenues,
| according to an estimate by the city's chief economist, while
| retail and financial firms are expected to account for 23% of the
| revenues each.
|
| > The CEO tax is expected to generate between $60 million to $140
| million per year.
|
| Doesn't seem that big in comparison to what SF annual budget is.
|
| From (because the article doesn't give exact figures on transfer
| taxes):
| https://sfcontroller.org/sites/default/files/Documents/Econo... ?
|
| > Proposed legislation would raise the Transfer Tax rate on
| properties in the city that sell for more than $10 million. For
| properties selling for between $10 million and $25 million, the
| rate would rise from 2.75% to 5.5%. For properties selling for
| over $25 million, the rate would rise from 3% to 6%.
| leetcrew wrote:
| sounds like a bunch of full-time roles are about to get
| converted to contractor positions.
| ed25519FUUU wrote:
| The bottom of the percentile graph will be outsourced to save
| in taxes for the top percentiles.
| dnautics wrote:
| Seems like the solution is directly compensate your CEOs very
| little and outsource executive services to a third party
| company that aggregates CEO compensation as a "contracted
| entity". This company will mostly be paying CEOs, so its median
| employee salary will be relatively high.
| URSpider94 wrote:
| No board of directors anywhere is going to allow this.
| texasbigdata wrote:
| Also depending on how this is structured, disregarded
| entities still consolidate to the individual so the measure
| could be flipped to be measured at the (trust ignored)
| individual level and it would still work.
| names_are_hard wrote:
| Additionally, tech companies use outsource their low paid
| labor. I don't see how they'll pay this tax.
| alexeichemenda wrote:
| >Doesn't seem that big in comparison to what SF annual budget
| is.
|
| There are no singled-out pockets that you can tap into and make
| up SF annual budget. It's all about cumulating a lot fo long-
| tail small pockets + 1-2 large pockets.
| aeternum wrote:
| I'd also be surprised if it brings in anywhere near the quoted
| amount since the SF supervisors have proven themselves
| incapable of considering second order effects such as companies
| contracting out their low-pay roles or simply leaving SF.
| NormenNomen wrote:
| Do you have a link of what you're referring to? I know some
| of the supervisors personally and that strikes me as an
| extremely distant view of them. I think it's a lot more
| likely that you're projecting strawmen intentions onto
| policies.
| jlmorton wrote:
| Pretty hard to claim this when Visa decided to massively
| expand their Global HQ in San Francisco after Prop C passed.
|
| The pandemic has thrown things in a wrench, but prior to the
| pandemic, San Francisco businesses were constrained only by
| commercial real estate. There was literally no space left to
| put any new businesses.
|
| We've been collecting Prop C revenues since March 2019, and
| they are exactly as forecast.
| aeternum wrote:
| A gross receipt tax is relatively difficult to evade. A
| company generally cannot avoid the SF tax without also
| foregoing the associated SF revenue.
| gmadsen wrote:
| if it was profitable, it would have happened already.
| SpaceRaccoon wrote:
| Two economists walk down a road and they see a twenty
| dollar bill lying on the side-walk. One of them asks "is
| that a twenty dollar bill?" Then the other one answers "It
| can't be, because someone would have picked it up already,"
| and they keep walking.
| MrBuddyCasino wrote:
| > SF supervisors have proven themselves incapable of
| considering second order effects
|
| Correct. SF and its politics cannot be saved, just let them
| slowly eat themselves.
| gmadsen wrote:
| this is a tax on high pay roles, so I don't understand your
| concern. Also I hope and pray that it would cause companies
| to move, that is essentially working towards the same goal.
| zadkey wrote:
| Agreed, this is problematic if the executive is compensated
| primarily in stock options.
| whoisburbansky wrote:
| Why do you think it is problematic? According to my reading
| of OP, the measures includes stock options in calculating
| comp.
| [deleted]
| diebeforei485 wrote:
| It's hard to calculate this accurately. Look at all the
| news articles greatly exaggerating Elon's stock
| compensation plan at Tesla.
|
| Keep in mind they also have to calculate this for certain
| employees.
| room500 wrote:
| I tried to look up the actual bill, but it doesn't provide
| any information on how stock options are valued [0]
|
| I am curious how you would determine what the fair value of
| a stock option is when it is granted. Assume the option's
| strike price is for the current stock price. Theoretically,
| that stock option has a current value of "0" (assuming that
| it is non-transferrable so we don't have to worry about
| market price)
|
| That stock option is expected to increase in value if the
| stock price increases (which then aligns the CEO's salary
| with shareholder value). So in five years, those stock
| options might be worth millions of dollars. But would you
| then say the CEO got paid millions of dollars five years
| ago? But the stock options when they were granted were 0 -
| they increased in value when they were the property of the
| CEO. If the CEO bought artwork 5 years ago and the value
| increased 10x in 5 years, would you also add that to his
| taxable income?
|
| I am sure there are ways to value these options. But I
| can't find the details in this bill. Do you know how it
| might work?
|
| 0: https://sfelections.sfgov.org/sites/default/files/Docume
| nts/...
| whoisburbansky wrote:
| I have no idea how far fetched this is, but there are
| clearly ways to price options given current share price,
| the stock price, expiry, etc. Black-Scholes comes to
| mind, but I am not an expert at this and don't know how
| reasonable of a valuation you could get this way. Just
| pointing out that there exists a mathematical framework
| for option valuation, which is presumably what Wall
| Street uses as the basis for pricing call/puts on the
| open market.
| kinkrtyavimoodh wrote:
| It will work out well fiscally because giant companies will suck
| it up and pay, but it looks like a bad strategy from a forward-
| looking point of view.
|
| You want to incentivize future growth too, and you want to make
| sure that 20 years down the line, you have the new FAANGs of the
| world giving you millions in tax dollars, because history has
| shown that the largest of companies can eventually die out, and
| tech is full of graveyards.
|
| What this does is, it collects money from today's FAANGs while
| disincentivizing future startups from starting here.
|
| This is akin to the boiling frog fable (yes I know it's fake but
| the point of the fable stands), except the city is the one
| putting itself in the cauldron and raising the temperature by
| chipping away bit by bit the things that make the bay area a good
| place to live and invest in.
| strawberrypuree wrote:
| > You want to incentivize future growth too
|
| I would say that SF doesn't want to incentivize future growth.
| That's the source of the inequality, right?
| booboolayla wrote:
| I'd say you're right - they're trying to make everyone equal,
| not to grow further.
| burkaman wrote:
| What makes you think the very slight disincentive to future
| startups outweighs the hundreds of millions in health services
| funding? Remember that healthcare has a compounding positive
| effect, because healthy people have an easier time contributing
| to society, and unhealthy people are more likely to need public
| services.
| cheriot wrote:
| It's dis-incentivizing future growth to make up for people
| and companies that barely pay any tax at all. The only thing
| this subsidizes are long time land owners.
| danans wrote:
| > What this does is, it collects money from today's FAANGs
| while disincentivizing future startups from starting here.
|
| How many startups are there where the executives make 100x to
| 200x the median employee pay? That only happens via stock-based
| compensation at public companies. If that's the case, they're
| not a startup.
| qppo wrote:
| Is the tax assessed on options/grants even if there isn't a
| market to sell them?
| dgoldstein0 wrote:
| It probably depends on how those options and grants vest.
| Earlier stage companies are more likely to set them up so
| that they vest at IPO.
| danans wrote:
| If there is no market, either because it is pre-IPO or
| unvested then the value is unrealized, and therefore not a
| form of compensation, so no. It's just a contract between
| you and the employer.
| TuringNYC wrote:
| >> It will work out well fiscally because giant companies will
| suck it up and pay
|
| I think that if companies do suck it up and pay, it will be
| declared an effective law _and then...the there will be
| proposals to expand it. It might dip down to also include SVPs,
| then VPs, and so on_
| op03 wrote:
| Cities consistently outlast Kings and Empires.
|
| But to build empire you have to be in denial of that fact.
| macinjosh wrote:
| Cities may stick around for millenia but their governments
| don't. Those come and go.
| dragonwriter wrote:
| > What this does is, it collects money from today's FAANGs
| while disincentivizing future startups from starting here.
|
| Does it? Startups probably start out with a fairly small
| Executive Pay Ratio because they start out without a lot of
| low-paid grunts, and its already not common for them to open
| satellite facilities or move HQs for grunt work when they scale
| out to more jobs where they aren't trying to attract locally-
| concentrated elite talent. Because its triggered on the ratio
| between the highest paid managerial employee _anywere_ in the
| firm and the median pay of employees _in the City_ , it really
| just adds further incentives to do low-level gruntwork outside
| of the city, but doesn't seem otherwise to really change the
| structural incentives much for startups.
|
| OTOH, it _does_ make it more expensive for any widespread
| organization whose headquarters and elite labor are elsewhere
| to operate a facility with mostly low-level labor in the City;
| a tech startup headquartered in the City might never be hit by
| it even as they scaled up if they are focussed on automation,
| as they might never have a low-paid workforce. OTOH, retail,
| etc., outlets, hotels, etc., of firms with highly-paid
| executives with their main executive and high-paid labor force
| outside of the city _would_ be hit hard (as far as compared to
| other firms, I don 't think the tax rate is ever high enough to
| really be "hit hard") by it on their operations in the City.
| eloff wrote:
| I agree companies will just suck it up and pay it if they want
| to be in SF.
|
| But I don't think it will disincentive new companies starting
| out. They have a hundred other concerns more important than how
| the CEO will be taxed if they one day become huge and the CEO
| has extremely high compensation. It won't even factor into the
| decision of where to locate the company. Also, you should
| notice most highly compensated CEOs are not founders. Founders
| don't need to compensate themselves that heavily because they
| own a large chunk of the equity. Simple capital gains or
| dividends are the favourite forms of compensation for founders.
|
| Since founders, by definition, are the ones deciding where to
| found the company, they won't care at all about this law.
| AlchemistCamp wrote:
| The bill isn't about how CEOs will be taxed. It's about how
| their entire company will be taxed.
| rattray wrote:
| It's based on CEO pay, which doesn't apply to CEOs who are
| founders and get most of their "pay" in the form of
| appreciation of stock (rather than stock options/grants).
| joshribakoff wrote:
| Would it be different if they liquidated and exchanged
| for an index fund or publicly traded ETF?
|
| On the other hand, the law does cover gross receipts, so
| the act of "paying" the CEO in stocks is subject to
| taxation at the point in time the CEO receives it as part
| of their income.
| filoleg wrote:
| >the act of "paying" the CEO in stocks is subject to
| taxation at the point in time the CEO receives it as part
| of their income
|
| That is technically true, but this is where it gets
| tricky.
|
| If you joined a public company (this will work with
| private too, if you weren't the founder, but let's not
| thing about it for the sake of simplicity for now) as the
| CEO, this will work out perfectly just like you
| described. You got all those shares at joining, you pay
| tax on their value at the time. As you get more shares,
| you get taxed on their value as soon as you receive them.
| If you decide to sell those shares, you don't get taxed
| on the initial value of them (since you already got taxed
| on it when you received the shares), only on the profits
| you made at the moment of sale (or you get your taxable
| income reduced due to losses, in case the share price
| went down between the moment you received the shares and
| the moment you sold them). So far so good.
|
| If you started your own company, you initially hold the
| shares that are worth nothing, so you aren't really taxed
| on them. If you don't continue receiving new shares, but
| instead just hold onto the initial ones, you only get
| taxed on them when you sell them (since when you
| "received" them originally, they were worth nothing).
| Does Zucc receive more shares over time? I don't think
| so, he is just holding onto his original shares (while,
| no doubt, selling some and getting taxed on them), so
| this law will not affect him one bit unless he receives
| more shares.
|
| Not trying to discredit your theory, your overall point
| is correct, I just wanted to add more nuance.
|
| P.S. I am not an expert on this by any means, so if
| someone can correct me (especially on the "starting your
| own company" scenario), please do so. I find this a
| fascinating topic, and I try to answer as accurately as I
| can. But since I didn't experience that scenario myself,
| I can definitely be wrong or missing some details.
| kelnos wrote:
| > _Simple capital gains or dividends are the favourite forms
| of compensation for founders._
|
| The new law includes equity comp in the calculation. Not sure
| how or if they'll amortize founder equity over many years,
| though; they may just consider the value in the year it's
| granted or the year it vests.
| jonny_eh wrote:
| Does founder equity even count as "comp"?
| 2arrs2ells wrote:
| The founder's original equity shouldn't count as
| compensation (it's purchased at time of incorporation at
| fair market value).
| czbond wrote:
| People will attempt to prove the counter with theoretical, I
| have an actual to support your claim.
|
| Years ago, Denver placed a tax on companies that create
| software. By "magic", companies decided to found outside the
| county lines including Boulder. Boulder has an active software
| scene. Denver is getting there, but still not the advanced
| companies Boulder has. I believe Denver recalled the tax, but
| unsure.
| ag56 wrote:
| Also consider the inverse example of Twitter: SF offered tax
| breaks to companies setting up on mid market street, and low
| and behold startups moved in and gentrified the area.
| dragonwriter wrote:
| > What this does is, it collects money from today's FAANGs
|
| I suspect that this would collect a lot more money from today's
| Hiltons and Marriots than FAANGs; its not like FAANGs employ a
| lot of people at bottom-of-the-barrel wages in SF.
| dpoochieni wrote:
| Could this work as a loophole, pay the CEO something nominally
| sane. Give them the rest in stocks held in a trust they are
| beneficiaries of?
| xg15 wrote:
| So they show do nothing about today's inequality because this
| will get them more taxes in 20 years? (Unless someone makes the
| same point 20 years in that they should better wait another 20
| years)
| Consultant32452 wrote:
| One thing I'd like to see them do is radically simplify the
| ability for regular people to start regular businesses. One
| thing we could do is pick some small industry and run
| experiments with it. An example might be food trucks. There's
| a lot of regulations around these today. As a thought
| experiment we could eliminate all sales tax, special
| licensing, etc. for food truck companies under a certain size
| (We don't McDonalds food trucks to count). We could see what
| happened, is there wide spread food poisoning? Are families
| brought out of the lower class?
|
| It doesn't have to be food trucks exactly, that's just an
| industry that people like in a business that's relatively
| simple and imo has low systemic risk.
| pydry wrote:
| Concentration of market power and lack of risk capital, not
| regulation, is the primary inhibitor to normal people
| starting businesses.
| Consultant32452 wrote:
| If you could open up a "food truck" on the weekends with
| a Walmart camp stove and a trip to Costco you'd eliminate
| the concentration fo market power and lack of risk
| capital as problems.
| nhumrich wrote:
| OC didn't claim they should do nothing. He just said that
| this specific way was short-sided.
| read_if_gay_ wrote:
| Maybe a tax like this is not the only way to address
| inequality?
| [deleted]
| [deleted]
| dontreact wrote:
| This assumes that the performance of companies is driven by the
| CEO much more than the employees. If the Bay Area has great
| FANG companies because of talented workforce here, then CEOs
| will gladly take a pay cut to be able to employ the best
| workers.
| core-questions wrote:
| > If the Bay Area has great FANG companies because of
| talented workforce here
|
| The talented workforce is there because of the companies. Why
| would someone deliberately choose to live in San Fran when
| given the choice of many cleaner, nicer cities with a lower
| cost of living?
|
| I guess if you really like fog and hills
| astine wrote:
| San Francisco is a well known culture hub. The startup
| industry started source of it in Silicon Valley but shifted
| north because of the appeal of living in San Francisco.
| bduerst wrote:
| Yep. Founders would likely be on the board and just give
| themselves different titles from CEO if they really cared, so
| it shouldn't impact startups.
| HenryKissinger wrote:
| > just give themselves different titles from CEO
|
| "Lead executor"
|
| "Company Chief"
|
| "Dear Leader"
|
| "Head Director"
|
| "Paramount Leader"
|
| "Viceroy"
|
| "Corporate Emperor"
| JoeAltmaier wrote:
| Lord High Muckety-Muck
|
| Emperor for Life
|
| Grand PoohBah
| PopeDotNinja wrote:
| More like "Advanced Master Individual Contributor LOL"
| dgoldstein0 wrote:
| The measure wasn't to tax based on CEO pay. It was based on
| the highest paid managerial employee. So title doesn't
| matter.
| stainforth wrote:
| Just want to comment that thank god we can actually build
| rules that can't be loopholed.
| jefftk wrote:
| It's "highest paid managerial employee" in the text, not
| CEO: https://sfelections.sfgov.org/sites/default/files/Docu
| ments/...
| ryankupyn wrote:
| Having the pay ratio be relative to the "Median San Francisco
| worker" might have some interesting effects - for financial/tech
| firms who want to avoid the tax they might just shift their ~25%
| lowest paid workers to an office in Oakland (though any corps
| with a mandatory physical presence like retail won't be able to
| do this).
| bitwize wrote:
| In other news, highly paid CEOs and big businesses approve moves
| out of San Francisco.
|
| Did you think it would end any other way?
| sokoloff wrote:
| > hopes the tax will drive companies to reexamine their
| compensation structures
|
| Outsource the lowest paid workers to a subcontractor to raise
| your average employee wage. I'm not sure that has a desirable
| effect, but it seems this law certainly financially encourages
| that.
| briandear wrote:
| Or just leave San Francisco. Stripe left.
|
| Bechtel, McKesson, Petrovich, Jamba Juice, Core-Mark, Houzz,
| Lyft, Xero, Pandora, Robin Hood, and hundreds others have moved
| their HQ to somewhere other than California.
|
| You can pay lower paid workers a higher effective wage in
| pretty much anywhere but California.
| e12e wrote:
| > Outsource the lowest paid workers to a subcontractor
|
| So, then the sub contractor pays the taxes and invoice you with
| mark-up?
|
| Because those companies have ceos too?
|
| I think this is rather fascinating. Assume a de-facto minimum
| wage of 10 dollars an hour, 2000 hours/year for 20k/year lower
| bound. 200 times that is 4M usd/year in compensation for a
| single individual. Does seem wierd to see such a big difference
| in campensation. If nothing else, seems to illustrate a broken
| labour market with horribly skewed bargaining power.
| sokoloff wrote:
| I don't see the reason that the contracting firm CEO would
| likely clear $2M/yr as a low-risk, mostly undifferentiated
| supplier of office services.
|
| But if that does become a problem, split into OfficeServicesA
| and OfficeServicesB corps and let your clients pick which one
| they'd like to hire. Or have your spouse or family member do
| some of the administrative work (for business continuity
| reasons) and split the comp.
| kyleblarson wrote:
| It will do more to force them to reconsider where they domicile
| their businesses than it will force them to reconsider their
| comp structures.
| thursday0987 wrote:
| San Franciso is a city, so I imagine what will happen is that
| companies will move out of the city limits and this new tax will
| be completely ineffective.
|
| Seriously, how hard is it to find a new office in Oakland or San
| Jose?
| quickthrower2 wrote:
| Might be effective in reducing rents though!
| dpoochieni wrote:
| Probably office rents only, not residential
| bitwize wrote:
| When Connecticut hiked its taxes, even long-standing businesses
| headquartered there, like GE, packed up and moved to
| Massachusetts. (You know you're doing something wrong when
| "Taxachusetts" is a relative tax haven compared to your state.)
|
| So even if these changes were implemented statewide, it can be
| an impetus to leave. Laffer's curve is a bitch for the eat-the-
| rich crowd.
| cactus2093 wrote:
| "The tax will levy an extra 0.1% to 0.6% on gross receipts made
| in San Francisco"
|
| What counts as "made in San Francisco"? It doesn't seem like that
| definition would apply to online revenue for e.g. a SAAS company
| or social media site. It would still apply to some tech
| companies, those with a physical presence like Uber or AirBnb are
| more clear.
|
| So is Salesforce in the clear for this tax, or perhaps they are
| only taxed on the revenue that comes from sales to other
| businesses who are themselves in SF? (And what if those
| businesses have multiple offices?). Seems quite complex and
| probably pretty easy to get out of with some accounting tricks. I
| guess this is a progressive SF law that really isn't targeting
| tech companies, for once?
|
| On the other hand, it clearly will apply to every national chain
| retail store, restaurant, etc. And if so, all of their local mom-
| and-pop competitors will get a slight leg up from this in
| addition to raising the revenue from the tax. If I'm
| understanding this right I guess it might not be the worse idea.
| thursday0987 wrote:
| does this target only CEOs? what about COOs, CTOs, and other
| C-level executives? Board members?
| texasbigdata wrote:
| Board member comp should rarely be that high given their part
| time status.
| jefftk wrote:
| _highest paid executive makes 100 times or more its median
| worker's salary_
| [deleted]
| derision wrote:
| 2 months from now: nation's first executiveless company
| stevehawk wrote:
| isn't that what Valve pretends to be?
| mrits wrote:
| The only executive is the CEO's mother making $50K/year
| dragonwriter wrote:
| > does this target only CEOs?
|
| No, "CEO Tax" is a popular term for this style of tax, but its
| not tied to CEOs specifically; its triggered by the pay ratio
| between the "highest paid managerial employee" of the firm and
| the median full-time-equivalent pay of full-time and part-time
| employees based in the City.
| CodesInChaos wrote:
| I'm sure companies will find a way to avoid the tax. Splitting
| the company (low income workers are already rarely employed
| directly), finding compensation forms that don't count,...
|
| The real estate transfer tax sounds rather misguided as well. I
| expect it to distort the already unhealthy real estate market in
| harmful ways.
|
| I'd rather go for higher ground value taxes with reductions for
| high density occupancy or people who live in that building
| themselves.
| lpolovets wrote:
| I wonder how many low margin businesses will leave SF because of
| this. If I understand it right, this is up to a 0.6% tax on gross
| receipts. What if a business runs on very thin margins? I can
| imagine someone like Waste Management ($50b company, $11m in CEO
| comp, median employee probably makes waaaay less than that)
| deciding that operating in SF is no longer worth it.
| chmod600 wrote:
| The financial success of San Francisco has covered for a lot of
| bad policies. I feel like the tech boom is somewhat like a
| "resource curse". Obviously tech has a lot more positive economic
| development associated with it, but a lot of it can just pick up
| and move to the peninsula or south bay.
|
| It seems like a potentially bad mix where a lot of people live in
| SF just for the money, and as soon as a downturn hits amd the bad
| policies start to have consequences it will just hollow out. That
| may be happening now.
| subsubzero wrote:
| There are multiple issues as play with plenty of guilty parties:
|
| The city of SF: Its horribly run to put it mildly, it gets an
| absolute fortune from taxes and the money "disappears". See the
| myriad homeless everywhere, think why doesn't the city spend any
| money on fixing the problem? They do, they spend 300M dollars a
| year on the homeless [1]. Lets talk about their budget, 13.7B[2],
| yes that Billion for a city with 883k residents. Looking
| elsewhere in CA at San Diego with has 1.3M residents, it has a
| budget of 4.3B[3] and although there are homeless in SD its not
| an apocalyptic scene like SF is.
|
| Tech Companies: Having a huge number of offices in SF with
| everyone making 2-4x what an average family makes in a year in
| the US is going to bring in some serious money. While its fine
| they make that much, what is not is having a extreme
| concentration of companies that can run their business anywhere
| in the US or World. With Covid we are seeing record numbers
| leaving the city as they are no longer shackled to the SF
| offices.
|
| Residents: Alot of SF housing owners are extremely resistant to
| building(as more housing supply reduces their home value). There
| is a fierce nimby movement that would like nothing more but to
| halt all development in the city as it changes the 'character' of
| the city[4].
|
| Strict zoning/environment laws: These laws are typically voted in
| by alot of residents but some have been around a long time and
| plague california stifling development and housing. A very long
| read article that goes into depth can be found here -
| https://techcrunch.com/2014/11/02/so-you-want-to-fix-the-hou...
|
| Summary: Add an incompetent local govt. mix in a huge influx of
| wealth and a splash of laws that stifle housing development in a
| city bound by 3 sides by water and you get the disaster that SF
| is.
|
| [1] - https://townhall.com/tipsheet/timothymeads/2019/05/18/san-
| fr...
|
| [2] -
| https://sfmayor.org/sites/default/files/CSF_Proposed_Budget_...
|
| [3] -
| https://www.sandiego.gov/sites/default/files/legacy/iba/pdf/...
|
| [4] - https://reason.com/2018/01/05/nimbyism-in-san-francisco-
| reac...
| moralsupply wrote:
| At this rate in 20 years California will be competing with
| Mississipi for the title of the poorest state in the country
| d33lio wrote:
| The worst case scenario is a democratic super majority where CA
| and it's insanely mis-managed cities are bailed out by the
| federal government. Think GM Auto Bailout, but this time for an
| entire state...
|
| This is coming from someone who's never voted for a single
| republican. Let's remember that [0] SF also just elected a DA
| who's parents were literally complicit in the Weather
| Underground bombings...
|
| [0] - https://californiaglobe.com/section-2/san-francisco-
| voters-e...
| beart wrote:
| As a California outsider, I had a very difficult time making
| it to the end of the article you linked. Maybe Chesa Boudin
| is a terrible person, but that article alone just reads like
| someone's angry rant and told me very little about Boudin
| himself.
| conanbatt wrote:
| "saying the tax is modest in comparison to the cost of moving a
| business."
|
| Basically admitting that the thought process is charging as much
| taxes as you can possible get away with.
| boulos wrote:
| That is the point of optimal tax theory: maximize revenues
| while minimizing downside.
| smolder wrote:
| I agree they shouldn't be seeking to grow their budget
| endlessly. Why do we accept that behavior from businesses? IME,
| they often effectively ruin their own products and do harm to
| society by attempting to extract the maximum benefit from
| market position. It seems that in many people's opinions
| they're just behaving as they should.
| diebeforei485 wrote:
| This is a terrible law. How exactly do you measure the
| compensation of the CEO of Ikea (moving into SF soon at 6th and
| Market), Adidas, DJI, Atlassian, Spotify etc? Exchange rates
| fluctuate a lot and stock based compensation is tricky.
| standardUser wrote:
| You're arguing that modern finance is so complicated that it
| should be exempt from taxation.
| thrill wrote:
| The cost of compliance is never factored into the making of
| law.
| xg15 wrote:
| What would you do instead?
| diebeforei485 wrote:
| I would recognize that taxing pay ratio is a ridiculous
| concept because temp agencies can be used (and already are
| used) for lowest-wage jobs like janitors. These are not
| independent contractors, these are W2 employees of a temp
| firm.
|
| What I would do instead is tax highly paid executives. This
| does not have the side-effect of making companies only use
| temp firms (as described above) if they need a barista or
| receptionist.
| maerF0x0 wrote:
| The politicians have shown their hand by not designing this
| legislation to instead have companies pay their employees more.
| Why do I say that? It's currently cheaper to pay the tax than
| give the raises to your employees. So politicians have shown it's
| just a money grab _For the Government_ more than for the
| employees.
|
| Let's say I make $100 and the mean is $1. I'll pay 0.1% on tax
| payments.
| singron wrote:
| It's a gross receipts tax on the business. E.g. so if you make
| $100, but the business has $1,000,000 in gross receipts, then
| 0.1% would be $1000 in taxes or 10x your total compensation.
| It's got teeth.
| maerF0x0 wrote:
| its a function of number employees and gross receipts. So
| companies with more employees relative to gross receipts will
| have less incentive to increase wages.
|
| also increasing the taxes by an additive 0.1 points (ie not
| multiplied by 1.001) disproportionately targets the lower
| gross receipts companies (such as restaurants, which would
| more than double their GR tax)
|
| Still seems like bad policy
| MR4D wrote:
| If you want to read the actual text of the law, go here [0] and
| scroll down to the letter "L".
|
| [0] - https://sfelections.sfgov.org/measures
| jariel wrote:
| 'Which companies' does this rule apply to? Companies that have HQ
| in SF? That's rather an easy thing to change, no? 'Majority of
| Employees'?
|
| What if the CEO has 'an office' in South Bay but spends their
| time in the city?
|
| This seems like the wrong tranche of government to be flirting
| with such a law.
| shin_lao wrote:
| This is such a smart thing to do in the middle of a pandemic that
| showed that distributed teams can work.
| [deleted]
| zjs wrote:
| There's some thoughtful analysis of the proposition from SPUR:
| https://www.spur.org/voter-guide/san-francisco-2020-11/prop-...
| b20000 wrote:
| they should have approved taxes on landlords charging crazy high
| rents.
| gnicholas wrote:
| Remote work wasn't as big of a thing when this was drafted, but
| it will be interesting to see how it plays out as SF-based tech
| workers relocate to lower cost of living parts of the
| country/world.
|
| Some companies have already said that they will reduce pay of
| employees who relocate, which affect the way that the average pay
| vs CEO pay shakes out.
| mrits wrote:
| With the way tax brackets work couldn't this result in a net loss
| of revenue for the city?
| xyst wrote:
| SF and Cali in general just love to chase businesses out of their
| state.
| mlindner wrote:
| Every CEO will just move out of San Francisco city limits... This
| doesn't really do anything.
| bigbossman wrote:
| I doubt it has the intended effect as SF tech companies are
| already moving to distributed locations. Workers have had the
| past 8 months to enjoy avoiding long commutes and stepping over
| needles and feces.
| cblconfederate wrote:
| Since this is transparently easy to game, i wonder which people
| is it supposed to be pandering to?
| dudul wrote:
| "Average worker" sounds like such an easy metric to game. They
| just should have used "lowest paid worker".
| lizardmancan wrote:
| how low seems more interesting.
| arram wrote:
| For people who point out that this incentivizes companies to
| leave San Francisco, that's probably not a coincidence. Many SF
| politicians see tech as the enemy and would be happy to see
| companies go elsewhere.
| MR4D wrote:
| Based on the article, they hate finance even more (at 23%,
| versus 17% for tech).
|
| Pissing off both of those industries doesn't seem like the
| smartest approach when they have 12 million sq. ft. of unused
| office space [0].
|
| I think SF's pain is only beginning.
|
| [0] -
| https://socketsite.com/archives/2020/10/nearly-12-million-sq...
| notJim wrote:
| This design seems really odd. Why target business and CEOs in
| particular? Why not just have a straightforward high progressive
| tax? It also seems like it will reward the practice of
| outsourcing lower-paid job functions, or discourage employers
| from hiring lower-paid workers generally. The whole thing seems
| designed as a punitive measure, without really thinking about
| what incentives it creates.
| yonran wrote:
| State law prohibits local governments from using progressive
| income taxes <https://leginfo.legislature.ca.gov/faces/codes_di
| splaySectio....>. San Francisco therefore uses a combination of
| gross receipts taxes (whose rates vary depending on business
| NAICS industry code and are graduated), payroll taxes (now
| repealed), real estate transfer taxes, sales taxes, and parcel
| taxes.
|
| In my opinion, the state legislature should amend RTC 17041.5
| to allow local income taxes, but only on rent, imputed rent,
| and capital gains within the city. Rents are the thing that
| local governments can tax without distorting the market.
|
| As for this performative CEO tax, I think that the only
| positive effect that it will have, if any, would be to raise
| awareness of an issue whose solution has to come at the
| national and state level.
| StreamBright wrote:
| You do not want to hurt politician revenues.
| ciarannolan wrote:
| Brings to mind the last paragraph here (see my comment below for
| the ending):
|
| > By the time of Plato's death (347 B.C.) his hostile analysis of
| Athenian democracy was approaching apparent confirmation by
| history. Athens recovered wealth, but this was now commercial
| rather than landed wealth; industrialists, merchants, and bankers
| were at the top of the reshuffled heap. The change produced a
| feverish struggle for money, a pleonexia, as the Greeks called it
| --an appetite for more and more.
|
| > The nouveaux riches (neoplutoi) built gaudy mansions, bedecked
| their women with costly robes and jewelry, spoiled them with
| dozens of servants, rivaled one another in the feasts with which
| they regaled their guests. The gap between the rich and the poor
| widened; Athens was divided, as Plato put it, into "two
| cities:... one the city of the poor, the other of the rich, the
| one at war with the other. The poor schemed to despoil the rich
| by legislation, taxation, and revolution; the rich organized
| themselves for protection against the poor. The members of some
| oligarchic organizations, says Aristotle, took a solemn oath: "I
| will be an adversary of the people" (i.e., the commonalty), "and
| in the Council I will do it all the evil that I can."
|
| > "The rich have become so unsocial," wrote Isocrates about 366
| B.C., "that those who own property had rather throw their
| possessions into the sea than lend aid to the needy, while those
| who are in poorer circumstances would less gladly find a treasure
| than seize the possessions of the rich."
|
| > The poorer citizens captured control of the Assembly, and began
| to vote the money of the rich into the coffers of the state, for
| redistribution among the people through governmental enterprises
| and subsidies. The politicians strained their ingenuity to
| discover new sources of public revenue. In some cities the
| decentralizing of wealth was more direct: the debtors in Mytilene
| massacred their creditors en masse; the democrats of Argos fell
| upon the rich, killed hundreds of them, and confiscated their
| property. The moneyed families of otherwise hostile Greek states
| leagued themselves secretly for mutual aid against popular
| revolts.
|
| [1] Will Durant. "The Lessons of History." p. 58-60
| dpoochieni wrote:
| How did the poor fare in the end?
| ciarannolan wrote:
| Sorry, didn't want to spam, but here is the last paragraph of
| that thought:
|
| > The middle classes, as well as the rich, began to distrust
| democracy as empowered envy, and the poor distrusted it as a
| sham equality of votes nullified by a gaping inequality of
| wealth. The rising bitterness of the class war left Greece
| internally as well as internationally divided when Philip of
| Macedon pounced down upon it in 338 B.C., and many rich
| Greeks welcomed his coming as preferable to revolution.
| Athenian democracy disappeared under Macedonian dictatorship.
|
| TLDR on this whole thing: this never ends well for the poor.
| whakim wrote:
| One thing to keep in mind is that most of our primary sources
| are incredibly hostile towards the merchant class. (For much of
| history, the merchant class had an incredible stigma attached
| to them.)
| titzer wrote:
| Maybe there's a good reason for that? (and not anti-semitism)
| whakim wrote:
| Well, there is _a_ reason for that. The vast majority of
| primary sources were written by members of a nobility who
| inherited their wealth, and the nobility viewed wealth that
| wasn 't inherited as ill-gotten. There's also the fact that
| pre-modern societies didn't have modern economic theories
| to help them understand exactly what value the merchant
| class was providing to society.
|
| I'm not necessarily siding with the nobility here. Simply
| pointing out that when our aristocratic sources write about
| the terrible upheaval that occurred when people outside the
| nobility acquired great wealth, we should be pretty
| skeptical.
| julienb_sea wrote:
| This is a strange bill. It targets companies based on the delta
| between CEO compensation and median worker.
|
| This means companies that have larger workforces - mostly
| determined by industry - are less likely to set up shop in San
| Francisco. Of those that do, they are strongly incentivized to
| use contractors instead of employees to ensure the salary gap is
| within reason.
|
| In other words this just created an arbitrary set of incentives
| for companies to adjust their behavior, likely to the detriment
| of non-high income workers in the city.
| rdiddly wrote:
| _" Critics call the surcharge a blatant attempt at redistribution
| of wealth..."_
|
| Um, yes? "Critics call John Travolta 'blatantly an actor, playing
| parts in movies.'"
| smolder wrote:
| It's funny/sad that people act like "redistribution of wealth"
| is a scary concept. Wealth is constantly being redistributed by
| commerce, and mostly it is being redistributed to the people
| with the biggest piles already. Overpricing products,
| underpaying workers, lotteries, taxes, rents, and
| investor/borrower arrangements are all mechanisms to shift
| wealth around.
| nelsondev wrote:
| A trade between two parties is not a redistribution of wealth
| .
|
| If I buy a car for $10,000, then I now have a car worth
| $10,000, and the seller has $10,000. Wealth was not
| redistributed, we're both where we started.
| spinningslate wrote:
| that was my reaction too. I don't live in the US, so this is an
| honest question. Most of the comments here are disparaging
| about the policy. Is that because:
|
| 1. you agree with the principle of addressing wealth
| polarisation, but don't agree with tax as the mechanism? (in
| general or the proposed model specifically)
|
| 2. you don't agree that increasing wealth polarisation needs to
| be stopped/reversed?
|
| 3. something else?
|
| Thanks.
|
| --
|
| Edit: fixed the numbering, forgot I wasn't writing markdown!
| d33lio wrote:
| Most motivated people with the means to scrape enough cash
| together to even try to start something dislike legislation
| and the idea of "redistribution" because usually these plans
| raise far less money than politicians think, but moreover the
| politicians coming up with these plans have already proven
| they have no clue how to spend taxpayer dollars.
|
| To be frank, as a supporter of capitalism - I generally
| support the notion of high taxes in europe because the
| populations who pay these taxes clearly see HUGE societal
| benefits as a result of half their income evaporating. There
| also seems to be more respect of the people's money from
| these gov'ts regarding how they spend taxpayer money is spent
| and with a clear aim to help the people NOT partisan goals,
| wars etc. I may be incorrect here (open to correction) but it
| seems like US politicians (federally at least) seem entitled
| to taxpayer dollars. Most forget that until WW2 the idea of
| federal witholding simply wasn't a thing and many middle
| class families were flushed with savings.
|
| Unfortunately, both sides are at fault in the US. The only
| way this is going to change for the better is to cease the
| cycle of one political party only pandering to it's base
| instead of motivated and able americans.
| RangerScience wrote:
| > to cease the cycle
|
| sooo ranked choice voting? :D
| stvswn wrote:
| I don't really agree with you characterization of where our
| taxes go -- federally, 64% of the government budget is
| related to mandatory spending, almost all of which is
| social security, medicare, and medicaid.
|
| 15% of the budget goes to the military. That makes the U.S.
| the largest military spender in the world.
|
| 15% of the budget may seem expensive, but it's not fair to
| compare it to Western Europe. NATO is a big reason why
| western europe does not need to spend more on their own
| defense.
|
| I believe that's a good thing - it's in the United States'
| best interest to avoid rearmament in Europe, and Europe has
| never been at (relative) peace for so long as it has been
| since the emergence of the post-WWII consensus -- but they
| do in fact have more money for more non-defense
| discretionary spending than we do as a result. The Euro
| area spends 1.4% of GDP on military spending while being
| protected by an umbrella of security provided by the U.S.,
| which spends 3.7% of GDP on the military.
|
| Again, I think this is good for the U.S., we benefit from
| the liberal world order that we enforce, but I think it has
| to be taken into context when the EU is described as a
| great example of how to spend tax money on wise social
| programs.
| d33lio wrote:
| "mandatory spending" - right
|
| I take a bigger issue with programs like student loan
| debt forgiveness which would be a slap in the face to
| poor people like myself who worked their way through
| college in order to no longer be burdened by loans. Not
| to mention the fact that without a refresh of regulation
| on universities (specifically graduate degrees) loan
| forgiveness would just further embolden universities to
| increase tuition.
|
| The issue with taxes in this country is that the budget
| is expected to always be met WITH excess. That's the
| disgusting part, the assumption that "well we can go over
| and shell out benefits to our beneficiaries (people who
| voted for us) and the american tax payer will foot the
| bill" _is_ atrocious.
|
| Both parties are guilty of this, however I also find it
| ironic that Americans (specifically privileged americans)
| seem to think that "taxing the rich" is a solution, when
| a) rich people already pay an overwhelming majority of
| taxes, b) the rich will always find ways to out-smart the
| government and avoid taxes they deem as unfit and c) even
| if you taxed earners above $400k 95% of their income it
| would only amount to maybe a trillion dollars - so not
| even close to bringing the national deficit down.
| heavyset_go wrote:
| > _I take a bigger issue with programs like student loan
| debt forgiveness which would be a slap in the face to
| poor people like myself who worked their way through
| college in order to no longer be burdened by loans_
|
| This is like saying that a cheap cure for cancer would be
| a slap in the face to people who drained their life
| savings battling cancer, and to the families of those who
| lost.
| vorpalhex wrote:
| In a basic way, all taxes are "wealth redistribution". If you
| tax every taxpayer $0.02 for public roads and non-tax payers
| get to use them, well, that's redistribution - and nobody
| (seriously) has problems with this.
|
| The problem comes with policies of the form "We're going to
| tax [some wealthy group] and redistribute the money to [some
| other group]". There's a few sets of issues:
|
| 1. The money never gets to the downstream group. It gets
| eaten up by fees and processing, etc. Great for the middleman
| but not anyone else. If it does get to the downstream group,
| the total amount is gravely reduced.
|
| 2. You have to make a very strong case for taxing [some
| wealthy group]. Simply having wealth doesn't seem a good
| basis for taxation - "You're successful so we're going to
| charge you more taxes, maybe next time you won't be so
| successful" Obviously there are other arguments that can be
| made - the wealthy stole their money, or gained it illictly,
| etc - but those arguments tend to be individual cases and
| don't allow acting against an entire class of people unless
| you go into weird theoretical territory.
|
| 3. Solving "wealth disparity" isn't a meaningful goal. A
| thousand homeless folks all in the same campground have no
| wealth disparity - that doesn't mean you've improved their
| life. Simply funneling money doesn't solve problems, and
| making the end goal to shift around bits of paper is
| mistaking a process for a goal. If your goal is "We should
| provide a base level of healthcare to those who can't afford
| it" and can name an actual price for that, then that's a
| meaningful goal and you can tax appropriately if voters
| approve it.
| leetcrew wrote:
| I think there are essentially three schools of thought.
|
| 1.) wealth/income inequality is inherently wrong, so
| redistribution is automatically good. private property is
| theft!
|
| 2.) whatever people get paid is theirs, fair and square.
| therefore redistribution is automatically bad. taxation is
| theft!
|
| 3.) some people are genuinely much more productive than
| others, and their pay may reflect that. at the same time,
| people can acquire more than their "fair share" by exploiting
| vulnerabilities in the system.
|
| from the perspective of 3.), redistribution via tax looks
| like a dirty hack to mitigate the consequences of a deeper
| problem. it makes things a little better in the short term,
| but it doesn't address the root question: why are some people
| able to capture outsized compensation for their work? but
| hey, sometimes you have an urgent issue and the quick fix is
| all you have time to implement.
| arrosenberg wrote:
| I think #3 is close, but it's not just that some users
| concentrate a disproportionate amount of wealth. It's also
| the quirk of human society that great hoarding of wealth
| winds up distorting it such that economic worth becomes
| directly tied to human worth. This is undesirable
| generally, and taxes are the main mechanism for the
| government to regulate this tendency.
| danans wrote:
| > from the perspective of 3.), redistribution via tax looks
| like a dirty hack to mitigate the consequences of a deeper
| problem.
|
| Scenarios 1 and 2 don't exist in the real world. They are
| just theoretical models.
|
| Every law is a "dirty" hack, because the deeper problem is
| the nature of humans - which is to hoard privilege, wealth,
| power, and security - and the way that influences their
| societies.
|
| Almost every non natural constraint civilization has
| imposed on humans has been to either support one group's
| hold on power and security (i.e primogeniture in feudal
| societies, taxes imposed on non-believers in the state
| religion) or the opposite: to redistribute power and
| security across the broader population (Magna Carta, The
| New Deal, Social Security / Medicare in the US).
| stvswn wrote:
| I find it interesting that you frame income inequality as
| "wealth polarisation." Are you implying a bimodal
| distribution of some sort?
|
| My personal theory of "inequality" is that it isn't
| necessarily a bad thing. A distribution of income levels will
| always have a long right tail as you cannot make negative
| income but there is no theoretical limit to the maximum
| income. If all wages grow by the same relative amount, you
| would see increased inequality.
|
| I think it is a problem if wages aren't growing for all
| portions of the distribution, but that is precisely because
| of the lack of growth for some and not because of the
| existence of growth for others. So, yes, I do think that
| growing income inequality may be a societal issue, but only
| if it is an effect of wage stagnation for middle and lower
| classes (which it is).
|
| I do not believe that the rich getting richer is the cause of
| the stagnation, though. If anything, automation and
| globalization have been the main reasons for stagnation among
| middle and lower income levels. Automation and globalization
| may also be the cause of the continued growth in the very
| high wages. Even if they share the same underlying cause, one
| didn't cause the other.
|
| I understand, but don't agree with, the argument that
| increased inequality causes social problems on its own.
| According to this theory, as I understand it, you can't have
| the differences among people be too great because it will
| cause too much power imbalance and resentment and eventually
| the masses will rise up and destroy the system from within. I
| don't agree, I think social problems come from the difference
| in reality compared to expectations of how one thought their
| future would go -- in other words, it is much worse for
| someone to see low wage growth in a stagnant economy where
| their standard of living is declining relative to their
| parents than it is to see moderate wage growth in a growing
| economy but there are some other people getting super, super
| rich. I don't think one's life relative to rich people is
| that important compared to one's life relative to personal
| expectations.
|
| So, in that sense, I don't agree with redistribution schemes
| that intend on fixing a symptom of a problem (that rich
| people exist) rather than fixing a cause (wages are
| stagnant).
|
| If the idea isn't to just reduce the inequality, but rather
| to supplement lower incomes -- there is absolutely no version
| of "taxing the mega rich" that we could do which would raise
| enough money to redistribute to the rest of workers such that
| it compensates them for the lack of wage growth at the lower
| end. It can't be done, there's not enough money. Eventually
| you have to tax the (productive) middle class.
|
| From that perspective, I prefer policies that focus on wage
| growth for the lower and middle classes, even if that's a
| harder problem to solve.
| arrosenberg wrote:
| > I do not believe that the rich getting richer is the
| cause of the stagnation, though. If anything, automation
| and globalization have been the main reasons for stagnation
| among middle and lower income levels.
|
| Who disproportionately benefitted financially from
| automation and globalization?
|
| > From that perspective, I prefer policies that focus on
| wage growth for the lower and middle classes, even if
| that's a harder problem to solve.
|
| You need to do both. No one was talking about this 20 years
| ago because most people were participating in the "good
| economy", even if some benefitted far more than others. Now
| people are being told the economy is good (by both major
| polities), but it doesn't match reality, which you noted is
| a major cause of angst.
|
| Additionally, if your goal is to create more jobs and wage
| growth for low and middle income people, the best way to do
| that is to reduce economic concentration and create more
| opportunity for competition and small business. It will be
| less cost efficient, but the economy will be more resilient
| and the wealth would be more broadly distributed, even
| though some people could still achieve obscene wealth.
| spinningslate wrote:
| Thanks for the comment. One point to clarify on my post:
|
| > I find it interesting that you frame income inequality as
| "wealth polarisation." Are you implying a bimodal
| distribution of some sort?
|
| I wasn't intending to equate distribution and polarisation.
| By the latter, I meant the steady shift of wealth to a
| smaller population who have become progressively wealthier.
| While, at the other end, the majority have beome
| comparatively less wealthy compared to equivalent social
| cohorts over time.
|
| Perhaps more succinctly, it's the _change_ in distribution,
| not the _presence_ of a distribution.
|
| I'm no economist and I know there are a variety of opinions
| on distribution, but I understand there's reasonable
| agreement that globalisation has increased polarisation
| [0].
|
| [0]: https://en.wikipedia.org/wiki/Economic_inequality
| conanbatt wrote:
| Well, they could decide to burn the collected tax money while
| achieving this same goal.
| newfriend wrote:
| Taking away from productive people, and giving to unproductive
| people is not a recipe for success.
| dave_aiello wrote:
| Doesn't this type of tax violate the Equal Protection Clause of
| the Fourteenth Amendment to The Constitution,
| https://en.wikipedia.org/wiki/Equal_Protection_Clause?
| RangerScience wrote:
| IMO that's the same question as 'does a progressive tax violate
| the 14th'; here's a Quora: https://www.quora.com/Does-the-
| federal-government-violate-th...
| nicolashahn wrote:
| What happens when other cities want to do the same thing to large
| companies with a national footprint? Is Sundar Pichai going to
| have to pay 0.6% to every city Google operates in who wants in on
| this?
| rattray wrote:
| I actually think things like this might be really good for the
| business culture of San Francisco.
|
| For a while, SF was a popular place to start a new company, but
| all established CA tech firms were down on the peninsula or in
| the south bay.
|
| Some of those startups got big, and some of the big firms opened
| SF offices to compete for talent.
|
| Now, it's hard to compete for talent in SF if you're starting out
| - you have to compete with the Ubers and Airbnb's as well as
| Google and FB.
|
| Taxes like this will push more of "big tech" out of the city (eg
| Stripe moving to South San Francisco) and free up more breathing
| room for young startups.
|
| I guess I take it as a given that this is better for SF, but
| others may disagree or need convincing.
| m0zg wrote:
| Brilliant idea: introduce a city tax in the middle of a pandemic
| which makes everyone work remotely from anywhere they want.
| Couldn't possibly backfire /s.
| jefftk wrote:
| Text of the measure:
| https://sfelections.sfgov.org/sites/default/files/Documents/...
|
| Note that it's "highest paid managerial employee" and not "CEO"
| or "highest paid executive".
| textech wrote:
| San Francisco is the 16th largest city by population and has a
| budget of around 14 billion which is like 6 or 7 times larger
| than many cities with much bigger population. This is just a
| badly run city and throwing more money at their problems isn't
| going to help them.
| toast0 wrote:
| San Francisco is a combined city and county (the only one in
| California), so its budget includes things that would be in
| county budgets for places like Los Angeles and San Jose.
|
| For example, SF MTA is part of the SF budget, but LA MTA is a
| county agency, and isn't part of the LA city budget.
| tomjakubowski wrote:
| Seems like a fair comparison to make would be with NYC, whose
| city government similarly subsumes the counties/boroughs.
| NYC's per capita budget is about 2/3 of SF's; there may be
| economies of scale and other non-linear contributors at play
| with NYC's 10x larger population, or maybe SF is just less
| efficient.
|
| edit: NYC's MTA is funded separately, including huge state
| contributions, so this is a terrible comparison. Let this
| comment be a reminder of the difficulty in comparing
| municipal budgets.
| 6gvONxR4sf7o wrote:
| Even if you don't account for anything else, the high cost of
| living here translates to expensive city employees and
| expensive services. If you account for the "exchange rate"
| between San Francisco dollars and other city dollars, I wonder
| how the per capita spending stacks up. I expect it still
| doesn't look good, but I bet it looks a lot less ridiculous.
| [deleted]
| reducesuffering wrote:
| It is the city's fault the housing is expensive, which is the
| reason for the high cost of living.
| 6gvONxR4sf7o wrote:
| Maybe if San Francisco did things differently, costs might
| look like other cities and counties in the Bay Area. Either
| way, it's going to be much more expensive than your typical
| city.
| reducesuffering wrote:
| > costs might look like other cities and counties in the
| Bay Area
|
| True, but most likely in a way that also reduced the cost
| in other cities and counties, because the high cost of SF
| has pushed people out to lower cost areas in the
| outskirts. If SF wasn't so expensive, more people from
| the surrounding area would live there, having the desire
| if price wasn't the issue, therefore reducing demand and
| thus costs for the outer areas.
| harikb wrote:
| > on gross receipts made in San Francisco
|
| How much does this really apply to SF tech companies?
| okprod wrote:
| A number of those taxed are just being incentivized to move
| elsewhere.
| anon_d wrote:
| Yes. Please move elsewhere.
| 6gvONxR4sf7o wrote:
| What a massive incentive for companies to not classify people who
| do their work as employees. You don't have to pay extra CEO
| taxes, and you don't have to provide benefits!
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