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San Francisco voters approve taxes on highly paid CEOs, big businesses

latimes.com

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Re: San Francisco voters approve taxes on highly paid CEOs, big businesses

#181

Post by shuckles »

colordrops wrote: post #144
cody3222 wrote: post #121

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 i…

CEOs are all just going to move out of San Francisco.

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.

Re: San Francisco voters approve taxes on highly paid CEOs, big businesses

#182

Post by csomar »

jedberg wrote: post #133
csomar wrote: post #119

Earlier quoted context omitted.

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.

> 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.

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.

Re: San Francisco voters approve taxes on highly paid CEOs, big businesses

#184

Post by sna1l »

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.

Re: San Francisco voters approve taxes on highly paid CEOs, big businesses

#185

Post by volume »

cheriot wrote: post #138
kmtrowbr wrote: post #70

Earlier quoted context omitted.

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 o…

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 lac…

> 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.

Re: San Francisco voters approve taxes on highly paid CEOs, big businesses

#186

Post by dragonwriter »

dtech wrote: post #174
colordrops wrote: post #144

Earlier quoted context omitted.

CEOs are all just going to move out of San Francisco.

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?

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.

Re: San Francisco voters approve taxes on highly paid CEOs, big businesses

#187

Post by shuckles »

kmtrowbr wrote: post #70
umeshunni wrote: post #5

Earlier quoted context omitted.

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.

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 o…

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.

Re: San Francisco voters approve taxes on highly paid CEOs, big businesses

#188

Post by kinkrtyavimoodh »

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.

Re: San Francisco voters approve taxes on highly paid CEOs, big businesses

#189

Post by diebeforei485 »

colordrops wrote: post #144
cody3222 wrote: post #121

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 i…

CEOs are all just going to move out of San Francisco.

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.

Re: San Francisco voters approve taxes on highly paid CEOs, big businesses

#190

Post by thorwasdfasdf »

Alupis wrote: post #153
colordrops wrote: post #144

Earlier quoted context omitted.

CEOs are all just going to move out of San Francisco.

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.

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.
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