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San Francisco Doing Everything It Can To Drive Zynga And Twitter Away

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Re: San Francisco Doing Everything It Can To Drive Zynga And Twitter Away

#31

Post by kscaldef »

binspace wrote: post #26
cloudwalking wrote: post #24

I appreciate it when people pay taxes because I like public transportation, fire safety, paved roads, bridges, public schools, police officers, health inspectors, safety inspectors, public parks, libraries, clean air, (relatively) fair corporations, airports, hospitals, court systems, electricity, vehicle regulation, elections, veteran associations, child support, public television... San Francisco is a pretty nice p…

I don't appreciate the extravagant waste and the entitlement of the state to impose it's will on the people. With our taxes, we also support bailouts, wars, and other profiteering of those in control. Also, these institutions are basically monopolies, where the people in charge are not really accountable to run them efficiently or effectively. Does giving the government more money make the government more effective?

I wasn't aware of the wars or bailouts the city of San Francisco has run. Could you elaborate?

Re: San Francisco Doing Everything It Can To Drive Zynga And Twitter Away

#32

Post by impendia »

The SF Chronicle has long been playing it the other way: the city government has been tripping over itself to brown-nose Twitter and other companies.

Being able to work in the city is a huge draw. Just ask the many people who live in SF and commute down to Stanford, Google, or elsewhere in the South Bay.

Re: San Francisco Doing Everything It Can To Drive Zynga And Twitter Away

#34

Post by esmevane »

meterplech wrote: post #25
esmevane wrote: post #23

I'm sorry, but I didn't read the article. I'm just posting right now because I clicked on it accidentally for the exact same reason that I decided to quit reading Tech Crunch: there is little to no substance there, but there are tremendous amounts of gamey, overblown, linkbaiting article titles. I'm really frustrated right now, for several reasons. One, I know that a portion of the articles I'm scouting around for ar…

Commenting doesn't help. If you don't think it's appropriate, flag the story.

If you're aware of a better place to discuss my dissatisfaction with a recurring news source, here, I think that, itself, would be more newsworthy than this article.

Re: San Francisco Doing Everything It Can To Drive Zynga And Twitter Away

#35

Post by impendia »

latch wrote: post #14
guywithabike wrote: post #3

What makes Twitter and Zynga more deserving of tax breaks than any other company in the city? Honest question.

I think it has more to do with the timing...in that, these are two companies that are going to be seriously affected by SF policies in the short term. Why Twitter and Zynga might be more deserving than a non tech company is because of the relatively high salaries of their staff. This extra disposable income flows up and down to the rest of the city. Look at it this way. You run a dry cleaning business. These are your…

So, in other words, because Twitter and Zynga's staff get paid more, we should give them tax breaks.

Re: San Francisco Doing Everything It Can To Drive Zynga And Twitter Away

#36

Post by bgentry »

sbov wrote: post #7

> Tech startups aren’t just driving some job growth in the city, they’re driving absolutely all of it. I assume theres a source for this somewhere?

Not sure if he has a study to prove this.. But can you think of any other industries in SF that have generated huge job growth during the past 10 years?

I can't. That doesn't mean Arrington is right, but I can't think of a reason to doubt that statement.

And I know I've heard that many of the financial companies have moved out of the city or downsized operations here during that span in order to avoid the high cost of living and tax rates.

Re: San Francisco Doing Everything It Can To Drive Zynga And Twitter Away

#37

Post by fleitz »

cloudwalking wrote: post #24

I appreciate it when people pay taxes because I like public transportation, fire safety, paved roads, bridges, public schools, police officers, health inspectors, safety inspectors, public parks, libraries, clean air, (relatively) fair corporations, airports, hospitals, court systems, electricity, vehicle regulation, elections, veteran associations, child support, public television... San Francisco is a pretty nice p…

public transportation? I live in Vancouver and recently flew in to SFO. Being from Vancouver I thought I know I'll save time and money and just take the subway in. BART is fucking disgusting and I couldn't sit down on the train for fear of picking up god knows what. In Vancouver if you start a startup and hire someone under 30 with a degree the gov't will pay you the first $15/hour of their salary, the rest you can avoid paying all taxes on if you make a SRED claim. All that AND we have public transportation you can sit down on, and even inside the tunnels you still have 3G connections. All that AND 'free' health care, and there is no f'ing way the city would ever levy a 1.5% payroll tax, let alone on stock options. In Vancouver we live in the best city on earth and pay less tax to the city than in SF.

Re: San Francisco Doing Everything It Can To Drive Zynga And Twitter Away

#38

Post by anigbrowl »

Twitter is almost certainly not going to pay this tax. The finance committee supervisors (who will consider it tomorrow) are fiscally conservative and Avalos and Mar are the only major opposition to the tax break when it comes before the full board next week. Mar will roll over in the (unlikely) event that the board is split.

This is not really about the tax, though. The city is not so much fixated on taxing anyone's options, as it is using the exemption to make it worth Twitter's while to stay in the city. Taxes are lower in Brisbane, but rents are higher because the building on offer there is newer. Over 6 years, Twitter stands to save ~$15 million by staying in the SF Mart building, notwithstanding the higher initial refurbishment costs.

Re: San Francisco Doing Everything It Can To Drive Zynga And Twitter Away

#39

Post by crux_ »

pg wrote: post #12
guywithabike wrote: post #3

What makes Twitter and Zynga more deserving of tax breaks than any other company in the city? Honest question.

As it says in the article, the problem is that the law covers not just salary but employees' stock gains as well. Twitter and Zynga uncomplainingly pay payroll tax on salaries like other companies, but the growth in their valuation combined with the fact that lots of employees get stock means that if the law were enforced, Twitter and Zynga would be hit with huge extra bills that other companies aren't.

This is probably because other companies either aren't in SF, or aren't winning the Startup Lottery. You yourself have long advocated that the former greatly increases your chances of the latter.

Now, it's late, so correct me if I'm wrong in my thinking here:

If twitter magically gained $3 billion in additional valuation, and all employees cashed in all their options, all at once, it would result in a "huge" tax bill of .... $13 million or so. Compare to the ~$270 million in capital gains taxes the employees would have racked up when they exercised their options.

Yeah, I think that Twitter could live just fine with that. Making a large and loud public fuss is cheaper, of course.

In light of all that, I think "huge" is a misleading word to use.

(Assumptions: a full 30% of the company as employee options; directly translating a higher valuation into the strike-vs-share price spread that's actually taxed.)

Re: San Francisco Doing Everything It Can To Drive Zynga And Twitter Away

#40

Post by niketdesai »

cloudwalking wrote: post #24

I appreciate it when people pay taxes because I like public transportation, fire safety, paved roads, bridges, public schools, police officers, health inspectors, safety inspectors, public parks, libraries, clean air, (relatively) fair corporations, airports, hospitals, court systems, electricity, vehicle regulation, elections, veteran associations, child support, public television... San Francisco is a pretty nice p…

It's up to SF to manage their city accordingly. If anything the city has been blessed by the types of organizations that keep it afloat. They can definitely tax, but they should look to make it competitive. For instance...the projected number of 3000 Twitter employees in 2013 at a rent rate of 1000 dollars per employee per month equates to 172M dollars in rent a year in the city of SF. Of course, not everyone will live IN SF, and perhaps the average will be lower -- but that's still an enormous amount of money moving out of the city (to pay for all those nice things you mention).

Furthermore, and I'm still figuring out the numbers on this one, I am curious to see what the sales tax losses (among others) will be when major companies like these move away from the city.

And really, it puts entrepreneurs in an awkward position of being forced to go to SF (because that's where all the talent want to be) and having to find a way to survive as well. San Francisco is definitely right to earn taxes on the many wealthy individuals that live in its borders, but I do think there is a more symbiotic relationship to be had.

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