SAN FRANCISCO (AP) — Addressing financial disparity laid naked by the coronavirus pandemic, San Francisco voters overwhelmingly authorised a number of tax measures concentrating on landlords and large companies whose CEOs earn far increased than their common staff.
Below the brand new regulation, any firm that pays its high govt 100 occasions greater than their common employee pays an additional 0.1% surcharge on its annual enterprise tax cost. If a CEO makes 200 occasions greater than the common worker, the surcharge will increase to 0.2%; 300 occasions will get a 0.3% surcharge and so forth.
Voters additionally agreed to sweeping enterprise tax adjustments that may result in a better tax price for a lot of tech firms, and a better switch tax on property gross sales valued between $10 million and $25 million.
“We’re not gonna shed any tears if penthouse dwellers should cough up,” the San Francisco League of Pissed Off Voters wrote in its voter information.
The outcomes “present that San Franciscans are involved about rising financial inequality,” metropolis Supervisor Matt Haney, the creator of the measure titled the “Overpaid Government Tax,” mentioned Wednesday. “The very rich are gaining increasingly. They’ve gotten a lot richer through the pandemic, whereas everybody else has remained stagnant.”
“We want the wealth that has been generated within the metropolis to be shared extra broadly with staff and residents,” he mentioned.
Critics name the surcharge a blatant try at redistribution of wealth and criticized elevating enterprise taxes in the midst of a recession.
Since March, COVID-19 restrictions have shut down crucial parts of San Francisco’s vibrant economic system. Vacationers are scarce, and legions of staff in tech and within the metropolis’s most important enterprise and monetary districts have left, in a position to work remotely from anyplace. Workplace emptiness charges went up whereas rents within the prohibitively costly metropolis dropped to their lowest in years.
“The center of pandemic-fueled shutdown is the improper time to lift taxes,” mentioned Jim Wunderman, president and CEO of the enterprise advocacy group Bay Space Council. “The drip, drip, drip of recent common taxes goes to erode the already shaky foundations of native economies decimated by the worst downturn in generations.”
The CEO tax is predicted to generate between $60 million to $140 million per 12 months, and Haney mentioned he desires many of the cash directed in the direction of well being companies. He dismisses fears that the surcharge will drive firms out of town, saying the tax is modest compared to the price of shifting a enterprise.
He mentioned he hopes the tax will drive firms to re-examine their compensation construction and can finally be adopted on a nationwide degree.
The tax is considerably just like an executive-pay surcharge handed by town council in Portland, Oregon, practically 4 years in the past. San Francisco metropolis leaders thought-about the concept a number of years in the past, and a 2014 state proposal to decrease taxes for firms whose executives had been paid lower than 100 occasions the median employee didn’t go within the California Legislature.
“The concept didn’t get a whole lot of traction as a result of individuals in San Francisco didn’t really feel it made sense to tax CEOs,” political guide Jim Ross mentioned. “However now you’re seeing a giant segregation between the have and have nots as executives get absurdly paid whereas others are struggling.”