San Francisco voters overwhelmingly authorized a tax measure this week penalizing main firms whose CEOs are paid excess of their common staff, a levy meant to slender an income gap that has widened for many years.
Below Proposition L — in any other case referred to as the “Overpaid Government Tax” — San Francisco firms might be compelled to pay an additional 0.1% surcharge on their annual enterprise tax funds if their prime government earns 100 instances greater than their common employee.
The broader the hole between the highest government and staff, the upper the surcharge might be. For instance, if a CEO makes 200 instances greater than the typical worker, the surcharge will increase to 0.2%, and 300 instances will get a 0.3% surcharge.
Critics referred to as the surcharge a blatant try at redistribution of wealth and stated it was poorly timed.
“The center of a pandemic-fueled shutdown is the flawed time to lift taxes,” stated Jim Wunderman, president and CEO of the enterprise advocacy group Bay Space Council.
Nonetheless, the writer of the measure, metropolis supervisor Matt Haney, had argued that it is a vital step as cities across the nation put together for an additional spike in coronavirus circumstances. He famous that the measure would elevate over $140 million yearly, permitting the town to rent a whole lot of nurses, medical doctors and first responders.
Voters had been satisfied. The measure handed in almost each precinct with greater than 65% help, Haney stated on Twitter.
The outcomes “present that San Franciscans are involved about rising financial inequality,” Haney stated Wednesday. “The very rich are gaining increasingly more. They’ve gotten a lot richer in the course of the pandemic, whereas everybody else has remained stagnant.”
Over the past 30 years, Haney argued, government salaries elevated by 940% whereas staff’ salaries grew simply 11%.
“Prop L incentivizes firms to put money into their staff, not simply their executives,” Haney wrote.
Firms can simply keep away from the tax by “merely paying their executives much less or by elevating their staff’ wages,” Haney added.
The Related Press contributed to this report.