Twitter, Mirkarimi and stock options taxes

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Fist of all, and I hate to be harsh but I've been driven to it: Fuck Randy Shaw. I said from the start, from the beginning of the discussion about the Twitter tax break, that this was all about stock options:

The payroll tax exemption is supposed to create jobs. This is another league altogether — and it has nothing to do with job creation.

So let's have that discussion, shall we? Forget the puny tax on weekly payroll and this rapidly-growing tax-free zone in the Tenderloin. Cut to the chase: should San Francisco exempt Twitter from the IPO stock options tax? That, at least, is worth fighting about.

I've been on the record since March: The tax on stock options is something we ought to discuss. It's something unusual for cities, a kind of tax that goes beyond what anyone else charges.

(Now before you say the payroll tax is unusual too, let me give a little lesson here. Most cities of any size impose business taxes. San Francisco's payroll tax is a blunt instrument meant to roughly measure the size of a company. Other cities use gross receipts, another imperfect instrument. The argument that the payroll tax costs jobs is just nonsense -- if the city had a gross receipts tax instead, we'd hear that it discouraged growth and investment, and thus cost jobs. If we had a commercial rent tax, we'd hear that it hurt commercial tenants, who then would have less money to hire more people, so that would cost jobs too. Yes: If we had no business taxes at all, some companies would have a fatter bottom line and might hire another couple of people. You really want to argue for no business taxes at all? Go ahead. Join Rand Paul. But that's a nonstarter in San Francisco.)

Techchrunch, which hates the stock options tax, says the city has had a hard time collecting the tax anyway,   but that's not entirely true. According to the Controller's Office, 14 San Francisco companies have gone public since 1997 and paid the tax. For the most part, the payments have been relatively modest -- between $39,000 and $685,000 a year, with an average of $140,000.

For the record, I don't think we ought to exempt any big companies from any business taxes -- the problem is that we don't tax the wealthy enough, not that we lack exemptions. Twitter and Zynga all these pre-IPOs are likely to make a whole lot of money -- and they won't pay enough in federal taxes and the city ought to capture everything it can. (And this notion that Twitter would suddenly be on the hook for $40 million or $75 million or whatever in one-time tax payments can easily be resolved -- let the company spread out its stock-options payments over a period of time).

But at least Mirkarimi's bill is limited -- it applies only to companies that are about to go public (so when Peter Darbee gets a $37 million golden parachute from PG&E, part of it in stock and options, the city will still be able to tax it). And it sets a cap of $750,000 before the exemption kicks in. And the companies will still be paying their regular payroll taxes -- unlike Twitter and everyone else in that huge tax-cut zone, who won't be paying any taxes at all on new employees.

It lasts for six years, longer than I think we need. So I don't love it -- but I'm much more worried about a competing bill by Sup. Mark Farrell that would stop the city from collecting any taxes on any stock options at all.

That's just a crazy idea -- stock options are part of compensation at a lot of companies, and San Francisco taxes payroll, and if you can hide payroll in options or other sorts of payouts, you're cheating the system. Farrell's bill is a wholesale giveaway to a lot of big businesses -- about what you'd expect from the guy, but it needs to be shot down.

Now: I think we all agree that the city's business tax system is a mess and has to be changed. (Well, most of us agree -- I don't know what Randy Shaw thinks since he's stopped responding to my emails. What a loser -- when you attack other people you ought to have the integrity and courage to talk to them.) I think we can come up with a much better system.

I also know that when we do, the same companies will howl the same stuff about any taxes at all (which will show how stupid this payroll-tax-hurts-jobs argument is). We'll hear how a gross receipts tax hurts growth, how a commercial rent tax hurts small businesses, how a stock options tax destroys entrepreneurship -- and if the city is at all serious about its structural budget problem, it's going to have to be rational, ignore the bullshit and pass fair, comprehensive business tax reform. And Twitter and Zynga and all the rest of the high-tech companies are going to have to pay their share, just like everyone else.

 

Comments

Randy Shaw has been acting so weird. Makes you wonder.....

Posted by Guest on May. 16, 2011 @ 4:14 pm

David Chiu explained clearly during the Board meeting when they voted on the tax break for the Tenderloin that this was just the beginning of a much larger effort to repeal the payroll tax entirely city wide.

If the payroll tax is repealed outright, the stock options tax would be included in that anyway. If Mirkarimi's legislation passes it will be that much more difficult to repeal the payroll tax, at least until there is something to take its place.

Randy Shaw will not support a repeal of the stock options tax and he will personally attack anyone who disagrees, but he will support a much larger payroll tax exemption that will cost far more than the stock options tax.

Then he writes an article on hypocrisy. Its an issue of basic character. Freud called it "projection'.

Posted by Guest on May. 16, 2011 @ 4:29 pm

Go to sfgovtv and watch the Board of Supervisors meeting for 04/05/11 starting at 44:30 minutes when David Chiu begins to speak in favor of the tax break.

At 46:00 David Chiu says, "We are the only city in the state that has the payroll tax that we have. The only city in the state. I have elected official friends in the East Bay and the South Bay, in San Jose, that make fun of the fact that we are at an incredible disadvantage because of our payroll tax. They would love to woo Twitter and other companies like that to their jurisdictions.

On thing I should just mention as an aside, President Obama, at the beginning of this recession, proposed, and passed, payroll tax breaks to the tune of 33 billion dollars. Somehow, we as a community didn't really have a problem with that, and in fact many of us supported what President Obama did at the national level. because we all understood and believed that it made sense. I want to reiterate everything we have heard from everybody about the importance of comprehensive business tax reform. This is something I have been talking about when I served on the small business commission, it is something that I experienced as a founder of a small business, it's something we all understand right now given the facts that I just laid out….

…we have issues, we have problems right now. We have unemployment, we have vacancy rates, we can't wait for us to move our city forward. We all know that likely business tax reform won't be considered by San Francisco until November 2012 and I think what we need to do now, what this legislation is, it is a first step forward in the right direction…."

David Chiu absolutely, transparently spelled it out that this is a first step in the process of repealing the ENTIRE payroll tax, starting I guess in Nov. 2012??

If Mirikarimi's legislation passes on the stock options tax a lot of the pressure by "Twitter and other companies like that" on the much larger payroll tax goes away.

Randy Shaw is supporting a proposal designed to be a first step in a MAJOR business tax repeal of the ENTIRE PAYROLL TAX!!!!

Hiprocrisy ha ha ha. 'Projection', more likely....

I don't think anybody knows what Shaw is thinking anymore.

Posted by Guest on May. 16, 2011 @ 5:09 pm

Oh yeah and I also caught that part where Chiu implied anyone who disagreed with him was racist.

I see a difference in a payroll tax cut at the federal level and a payroll tax cut at a local level where the locality cannot tax business in any other way except. And I think that David Chiu is 'projecting'.....

Posted by Guest on May. 16, 2011 @ 5:32 pm

Psychological projection or projection bias is a psychological defense mechanism where a person unconsciously denies his or her own attributes, thoughts, and emotions, which are then ascribed to the outside world, such as to other people. Thus, projection involves imagining or projecting the belief that others have those feelings.[1]

http://en.wikipedia.org/wiki/Psychological_projection

Posted by Guest on May. 16, 2011 @ 5:34 pm

All that Freudian psychobabble is just trying way to hard to figure out what is likely just the mundane lack of an awareness that many true believers hold about the world around themselves.

They complain about how laws around immigration are racist, unless they are making the laws to their own advantage. It's not insecurity, its just being pissed when someone gets over when you want to be the person getting over.

Posted by maltlock on May. 16, 2011 @ 7:31 pm

Thank you thats what Ive been trying to say about Randy Shaw

Posted by Guest on May. 16, 2011 @ 8:55 pm

Saying that you've been on the record since the beginning that you knew this was all about stock options does not strike me as accurate. Your first article took the position that the payroll tax was "too small a factor to count as more than decimal dust in anyone's hiring decisions." The SFBG apparently didn't even recognize it applied to stock options.

http://www.sfbg.com/2010/02/03/editors-notes

Posted by The Commish on May. 16, 2011 @ 5:40 pm

Actually, nobody knew that the stock options were an issue until Ted Egan's report came out. ALl the talk, from Twitter and City Hall, was about the payroll tax, as if that alone could influence a major relocation decision. As soon as we got the internal documents from a public records request, we learned what this was really about.

Posted by timredmond on May. 17, 2011 @ 9:15 am

Yes it was so strange that a company would be so upset over a 1.5% payroll tax.

When Ted Egan's report came out about the stock options it suddenly made perfect sense.

Which is why David Chiu's dramatic insistence during his impassioned speech that Twitter was about payroll taxes "based upon numerous meetings with the CFO" was such a blatant lie even his own supporters were embarrassed.

Him and Randy Shaw.

Posted by Guest on May. 17, 2011 @ 10:59 am

OK, but I don't see why you needed internal documents from a public records request. The term "stock options" is right in the payroll tax statute (as the TechCrunch article you link to points out). Payroll expense is expressly defined to include stock options.

Posted by The Commish on May. 17, 2011 @ 11:41 am

"The term "stock options" is right in the payroll tax statute"

HA HA tell that to David Chiu and Randy Shaw.

Posted by Guest on May. 17, 2011 @ 12:35 pm

You know, Shaw and Chiu argued that progressives offered no alternatives to the status quo, stagnation on sixth street. If I heard right, they even offered it as evidence of unfairness toward them, even code words for racism.

Yet, so many people are worried that regardless the historic stagnation along mid market and the Tenderloin, someday the ENTIRE city will look like mid market.

Right now lots of people are fighting to keep the rest of SF from looking like the Tenderloin, something a repeal of the payroll tax citywide could lead to.

Ronald Regan had it exactly wrong. Money doesn't trickle down. It trickles up. Because of under taxing business and over taxing everyone else.

If status quo for the mid market is the alternative to city wide business tax cuts, well is a lot worse than Shorenstein's buildings sitting vacant, and if Randy Shaw doesn't like it he should stop buying up all the real estate in the Tenderloin and hoping something is gonna happen.

Posted by Guest on May. 17, 2011 @ 12:57 pm

Because what it looks like to me is Randy Shaw whining that he made bad real estate investments in the Tenderloin.

He thought by now that place would have definitely gone upscale....

Posted by Guest on May. 17, 2011 @ 12:59 pm

You honestly expect to be taken seriously as a journalist/political commentator when you begin an editorial with "Fuck Randy Shaw?" You come across as a nine-year old having a temper tantrum, not as an adult attempting to make a cogent argument. If you have a point to make, then you should be able to persuade the reader with your logic. If you simply want to trade insults with Randy Shaw, then pick up the phone and call him, it's quicker and the rest of us don't have to be a party to your stupidity.

Let's leave the childish behavior back on the playground of your (long past) youth where it belongs.

Posted by Chris on May. 16, 2011 @ 6:13 pm

I wish we could elevate the discourse at the SFBG. There seems to be a bit of a bad temper running around the SFBG building these days - Steven, Caitlin and Tim all appear quite grouchy lately. Turn those frowns upside down kids!!

Posted by Lucretia Snapples on May. 16, 2011 @ 7:53 pm

Does that "elevate the discourse at the SFBG"?
"Next, shit-fer-brains?"
Posted by Lucretia Snapples on Nov. 16, 2010 @ 12:31 pm
http://www.sfbg.com/politics/2010/11/12/only-miracle-can-save-steve-li-now

Ooooh... filthy language!
How does it not offend you when it's pouring out of your own disgusting orifice?

Posted by Guest on May. 16, 2011 @ 9:24 pm

Thanks for responding so quickly to that post - I know exactly what I need to write to get a rise out of you. You should subscribe to my Twitter feed too - there's always new and fresh info on my exciting life, something I know you're intensely interested in.

My #1 fan!!

Posted by Lucretia Snapples on May. 16, 2011 @ 10:19 pm

You've simply demonstrated that you're a self contradicting man with a severely limited intellect.
If anything, you inspire pity, but not hostility.
Here's where you can discover what that big word you used actually means:
http://www.merriam-webster.com/dictionary/antagonize
And this link sheds a lot of light on your constant postings on the Guardian website, including this most recent exhibit:
http://psychology.about.com/od/personalitydisorders/a/narcissisticpd.htm

Posted by Guest on May. 17, 2011 @ 2:16 pm

Ah yes, Redmond in the Spring time,

Nothing like getting out of your rocker on the porch, firing up your corncob pipe and stretching your legs by going for a walk through pig shit.

And, Tim, use your helper adjectives and adverbs like they taught you in Journalism school. Why should you call Shaw a 'fucker' for instance, when it only takes a few strokes on your keyboard to call him a 'mother' fucker? or, if you wish to be less offensive and whimsical, 'Mo Fo'.

Go Giants!

h.

Posted by Guest h. brown on May. 16, 2011 @ 8:43 pm

Randy Shaw has trouble with the extremist, intolerant tone of his propaganda basically. If you ask me he's hiding something.

Posted by Guest on May. 16, 2011 @ 8:59 pm

Yo h.

@Chris, Lucy, 'guests'.
FUCK RANDY SHAW.

Posted by Pat Monk.RN. on May. 16, 2011 @ 9:35 pm

For better or for worse - none of the people who are involved with the SFBG - tim, Bruce, etc have really ever come of as terribly intelligent.
Tim especially. Not only does he seem to invite the trolls, he frequently writes half baked arguments, uses misspellings, and overall plays his cards a bit too obviously.

Posted by Guest on May. 17, 2011 @ 10:22 am

gotta love "journalism" that is just old straight white dudes bickering.

Posted by Guest on May. 17, 2011 @ 1:29 pm

What does that have to do with anything?

You do know that when running for office race and gender identifications is a paramount qualification with the white liberals who seem to be doing the endorsing down at the Guardian?

If not for middle class liberal paternalism where would the USA be?

Posted by maltlock on May. 17, 2011 @ 5:59 pm

Glad you like it.

Posted by Guest on May. 17, 2011 @ 3:23 pm

Dear Tim,

I've been a reader of SFBG long before I ever thought to post a comment. One thing I have always respected about you is that you generally go out of your way to be fair towards the people you're covering (including Randy Shaw). So when you say you've been driven to this, I believe you.

I think that most of us -- progressive readers who don't often comment -- can empathize with your exasperation with Shaw. Shaw has been relentless in attacking the Bay Guardian, mainly because you shed light on issues that threaten his agenda. I say Bravo!

I turn to the Guardian because I know I can count on you and other BG writers for fair, thoughtful and accurate reportage. I've really grown to love this alternative paper. So I hope you won't take any of the comments you're hearing to heart.

For those who are wondering, I don't know Tim Redmond, but I don't like to see anyone getting beat up on, especially someone who as decent and thoughtful as Tim is.

Just a word of support from a longtime BG reader. Don't let the bastards get you down!

Posted by Lisa on May. 18, 2011 @ 3:51 pm

Thank you, Lisa.

Posted by tim on May. 20, 2011 @ 3:00 pm

Just realized I never even read that Beyond Chron article until I saw it here. I used to read them all the time ha ha. hardly ever now.

Posted by Guest on May. 19, 2011 @ 12:47 pm
Its

Its heerrrreeeee...

http://www.wired.com/epicenter/2011/05/linkedin-ipo-pop/

Red-Hot LinkedIn IPO Heats Up Tech Bubble Talk

Posted by Guest on May. 19, 2011 @ 1:35 pm

Um, no. Tim writes like the son of an English teacher.

And he's taken his time getting a clue about Randy shaw.

Posted by Carling on May. 19, 2011 @ 8:02 pm

I've tried for years to give Randy the benefit of the doubt. Thanks for understanding that. And yes, I am the son of an English teacher. Thanks for noticing.

Posted by tim on May. 20, 2011 @ 3:02 pm

Dont worry Its different this time

-- Was LinkedIn Scammed?

"The fact that the stock more than doubled on its first day of trading — something the investment bankers, with their fingers on the pulse of the market, absolutely must have known would happen — means that hundreds of millions of additional dollars that should have gone to LinkedIn wound up in the hands of investors that Morgan Stanley and Merrill Lynch wanted to do favors for. Most of those investors, I guarantee, sold the stock during the morning run-up. It’s the easiest money you can make on Wall Street. "

http://www.nytimes.com/2011/05/21/opinion/21nocera.html

Posted by Guest on May. 21, 2011 @ 11:16 am

Its because we need more tax cuts....

Bush-Era Tax Cuts Projected As Largest Contributor To Public Debt

http://www.huffingtonpost.com/2011/05/20/bush-tax-cuts-debt_n_864812.html

"If the Bush-era tax cuts are renewed next year, that policy will by 2019 be the single largest contributor to the nation's public debt -- "the sum of annual budget deficits, minus annual surpluses" -- according to new analysis from the non-partisan Center for Budget and Policy Priorities."

Posted by Guest on May. 21, 2011 @ 1:12 pm