I think the degree of special treatment Twitter is seeking from SF is disproportionate to the number of jobs they actually provide.
High quality jobs improve the tax base, lessen the demands on social services, indirectly increase property values, and create fewer negative externalities (waste, pollution, noise, crime). They also have lower turnover, are less seasonal, and are more likely to result in SF homeowners as opposed to itinerant renters.
There's a balance to be struck, to be sure; "hedge fund manager" is a very, very high-quality job, but having 1 hedge fund manager isn't better than having 100 software developers, no matter what the numbers might say.
Except in this case, not only is Twitter asking to be relieved of $500K/yr in payroll tax burden, but also to get $250K in additional police presence in the area.
To put this in perspective, if 2000 Twitter employees purchase lunch near the office 5 days a week at an average price of $10, the sales tax revenue will offset the cost of the payroll tax holiday - not to mention the benefits of an extra $5m/year flowing through the neighborhood economy.
2000 lunchers to the tune of $100,000 spent in the neighborhood per week, are you saying that Twitter is not going to have their own on-site cafeteria?
* Fantasy numbers do help when they illustrate the scale of the dollar figures we're talking about. It is helpful to measure things in "Twitter employee lunches to break even". It's actually more helpful than "$250,000" is, even though the latter number is more "factual".
* If you don't believe it matters whether the city will even out in side-effects†, you're basically arguing there's no point to discussing incentive programs. All of them are cost-benefit investments (or gambles). Make the argument that they're bad gambles, sure. But it's probably not worth making the argument that the city shouldn't try incentives; you'd be howling into the wind, since every city in the country has, in the city council and at the ballot box, decided this already.
† And, tip, which I learned here the hard way: watch out for the double quotes; they can mean, "reader, this is what the person who I'm responding to just said; would you get a load of it?". You'd be surprised how irritating this can be to people. I re-learn this at least once every couple months.
The article says "Going public from San Francisco could cost companies like Twitter, Zynga and Yelp as much as half of the IPO proceeds in taxes." I can't back this and would be interested in anybody who has more details about whether this is true, but if it is true, this isn't a company that is asking for special tax breaks that nobody else gets. This is a company that literally can not go public under a regime like that as it is, as the article says, an immediate failure to honor their fiduciary duties. They literally can not continue to function and grow normally and must leave.
(However that number seems high to me, even assuming it's 50% of what's left after everybody else gets their taxes. I have no inside information but my BS detector is twitching.)
Yeah, that part is total BS. The tax is 1.5% on payroll, and treats stock option gains like payroll. So if Twitter IPOed at $12 billion, and employees owned 1/4 of the shares via options, it could cost...$40-50 million. It would only be half in relation to the nominal value of the share options at time of issue, rather than post-IPO. Having said that, though, nobody is strenuously supporting the 'IPO tax' - not even the unions or the reflexively anti-corporate Bay Guardian. Almost everyone sees the point that share options are a carrot to attract talent to a startup business that could otherwise afford to go elsewhere, and the gains are the just reward for risk + economic growth, so any taxes should be on the low value of the share options at time issue.
The objections I've been hearing are towards other aspects of the plan, like the payroll exemptions for existing businesses and the expansion of the area to include properties owned by large commercial landlords, and less about Twitter than the headlines suggest.
It doesn't seem to offer any real advantages over, say, Palo Alto or Sunnyvale or Cupertino or San Jose, and the tax situation sure seems like a significant disadvantage.