San Francisco City Government May Impose Payroll Tax

San Francisco officials propose payroll tax aimed solely at tech companies

san francisco housing crisis tech tax street — Morenovel / Shutterstock

In an attempt to help alleviate the housing “affordability crisis” in San Francisco, city officials have proposed a 1.5 percent payroll tax just for tech companies, according to the New York Times. Supporters of the effort attribute the high — and rising — cost of housing in San Francisco to the heavy presence of tech companies, and the tax would be used solely for programs related to housing.

San Francisco’s chief economist Ted Egan has stated the average salary for tech company employees is around $150,000 to $200,000. Those employees are more able to afford San Francisco’s rising housing costs.

“Billions of dollars of venture capital have poured into the city and pushed our people out,” said Maria Poblet, the executive director of Causa Justa/Just Cause, a San Francisco nonprofit that helps Latino residents who are facing eviction. “You have a CEO who cares about kids in Ghana one week or dolphins the next week. Those are important. But the people impacted by displacement in San Francisco are a worthy cause, too.”

Three members of the San Francisco Board of Supervisors are backing the proposal. To pass, the proposal needs a majority, or at least six of the 11 board members, to get on the election ballot in November. If the tech tax gets that far, a two-thirds majority of people who vote on the issue will be needed for the law to pass.

Eric Mar, the supervisor who made the proposal, believes a tech tax would make up for what proponents see as the negative effects of the tech boom in the city. Mar said that tech companies are “a tremendous benefit to the city in many ways,” Mr. Mar said. “But I don’t think they’ve been paying their fair share.”

Scott Wiener, a supervisor who is against the tech tax, said: “This tax on technology jobs will not help our housing crisis. It won’t make housing less expensive. It won’t reduce the number of homeless people. What it will do is chase away good-paying jobs and erode our tax base.”

Assessing a payroll tax just on tech companies could be an administrative tangle for the city. It would have to determine how the thousands of companies in the city should be categorized. Adding to the potential fiscal confusion, Mayor Edwin M. Lee is proposing a sales tax increase to help balance the budget, and for transit and housing costs.

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