An obvious problem with the Twitter tax break

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It should come as no surprise to anyone that businesses all over the city, including high-tech startups like Zynga, now think they ought to get a tax break, too. That's the problem with doing favors for one company (and let's face it -- for all the talk of revitalizing mid-Market, this is in essence a tax break designed to keep one company from moving out of town). That became clear in the process of crafting the legislation, when the tax-exempt zone kept expanding.

And now the Chamber of Commerce is saying that the payroll tax should be eliminated for new hires everywhere in town.

Folks: there has to be some sort of business tax in San Francisco. Almost every big city has a business tax. The payroll tax isn't perfect, and too many companies get away without paying it; I'm all for changing it to a gross receipts and commercial rent tax. But once you start telling specific companies that you'll waive the taxes for them, you get into a whole lot of trouble.

Comments

We gotta put a gross receipts or commercial rent tax on the ballot for November to render irrelevant this entire exercise of elected officials fellating darling corporations.

This practical seminar in applied semiotics has served its purpose, everyone knows that certain supervisors have bowed down before these corporate masters.

Now that we know where our elected officials stand, it is time for progressives to take matters into our own hands.

-marc

Posted by marcos on Mar. 22, 2011 @ 10:40 am

Wouldn't They Just Use The Same Argument On Gross Receipts? Or any other tax?

I can hear them now..

"We need to give a gross receipts tax break to Google so they can afford to hire more workers and plant new street trees..." etc.

Posted by Eric Brooks on Mar. 22, 2011 @ 5:27 pm

Where does the FTB stand in the fray here?

Posted by Ian Waters on Mar. 30, 2011 @ 1:40 am

The FTB is not a policy making body. It follows whatever laws the state legislature has enacted. It's no different than the employees of city agencies that are required to follow city laws and ordinances. They are not policy experts, although like all of us, most of them have their own uninformed opinions about policy they are willing to share with anyone who will listen.

There's nothing magical about a gross receipts tax. New Mexico uses one. Ohio recently scrapped its entire corporate tax system and adopted a gross receipts tax in its place. Los Angeles uses a gross receipts system as their primary business tax.

Michigan adopted a fairly sophisticated gross receipts system, but the business community organized and got the legislature to overturn it a few years later. Why? Because businesses hate the gross receipts tax since they can't play around with "net income" by using all sorts of fancy legal and accounting maneuvers.

California has had two recent commissions investigate revamping the state tax system. (One from around 2002/2003 and one from 2009/2010.) For those truly interested in tax policy, the reports can be found on the state's website, along with a wealth of tax policy material presented to both commissions. (One has a title of something like "tax policy for the 21st century" or some title equally pretentious.)

As someone pointed out, the city needs to wait until November 2012 to put a new business tax system before the voters unless it wants to try to get 2/3 voter approval, which isn't going to happen. (I think it's Prop 218 or its progeny that limits tax increases to 50%+1 of the voters only when the local legislature is up re-election. All other times require 2/3 voter appproval.) Thus cities and counties generally have only once every two years to pass a revenue measure with 50%+1 of the vote.

Posted by Robert on Mar. 30, 2011 @ 7:00 am

A united front of one that knows a thing or two about "exercise"

Posted by Guest on Mar. 22, 2011 @ 11:50 am

The commercial rent tax would take a two-thirds vote. I'm not sure the votes are there.

Posted by Guest on Mar. 22, 2011 @ 11:51 am

you are saying that when one group gets something another group will demand the same thing?

Posted by maltlock on Mar. 22, 2011 @ 12:29 pm

And giving tax waivers are going to impact that in a way which cannot be tolerated. If we're going to guarantee wage increases for Gaby Haaland's minions in SEIU and make sure Non Profit Inc. is guaranteed a continual stream of cash (without having to prove they're, you know, actually accomplishing anything with the money) then progressives are going to need to "take matters into our own hands."

Posted by Lucretia Snapples on Mar. 22, 2011 @ 12:33 pm
heh

None of these companies should get special deals because it's unfair, the city needs all that tax money so that they can dispense it equally to every special group who find it unfair when they don't get what another special group gets.

Posted by maltlock on Mar. 22, 2011 @ 12:44 pm

Dear Editor:

Regarding the Twitter Affair.

Give them the tax break, but with one proviso. 80% of the the savings should be given to the San Francisco Unified School District.The projected break of over $100 million over the next 5 to 6 years should enable the SFUSD to retain a fair number of teachers and keep supplies flowing to the classrooms.

Yours for bigger and better "tax breaks," so long as they break in the public's favor.

Wearily and warily,
Stanford L. Chandler

415-221-2481

Posted by Guest Stanford Chandler on Mar. 22, 2011 @ 1:04 pm

AMEN, Stanford Chandler!

Posted by Guest on Mar. 29, 2011 @ 5:20 pm

You knew this was coming. You forgot to mention that this break is tailored for Twitter in the sense that most companies sign long term leases and don't have the option to move into the tax-break zone.

This City does a lot of dumb things but taxing job creation has to be in the Top Ten.

Posted by A sensible comment about the tax break... on Mar. 22, 2011 @ 2:14 pm

Meanwhile, not far away in the Tenderloin, David Overdorf privatizes and locks up a public street while fighting against local cafes being allowed outdoor seating.
His reason?
"Public safety is a big thing for me," he said.

If David Overdorf is so concerned about fire safety, why does he keep Meacham Alley, a public street, locked off in violation of fire safety code?

“The catch is the gate cannot be locked; city policy cites fire safety and public access issues. “
David Overdorf
http://imgur.com/p9XRd

“"Now there is no more illegal parking." said David Overdorf
http://i.imgur.com/puuXP.jpg
http://i.imgur.com/llySd.jpg
http://imgur.com/FHs3R
http://i.imgur.com/S1Qav.jpg
http://i.imgur.com/6TU67.jpg

http://articles.sfgate.com/2005-04-04/bay-area/17368058_1_gate-union-squ...

The gate is also clearly locked in Google Streetview.

And here’s Nevius with the massage:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/03/22/BAC81IGBON.DTL

Posted by Guestgatetodd on Mar. 22, 2011 @ 4:32 pm