San Francisco voters approve taxes on highly paid CEOs, big businesses
latimes.com
latimes.com
This is a big problem at all levels of government, but particularly in California where the voters can (and do) directly create policies and programs via propositions.
If we were half as good at removing unhelpful laws and programs as we were at creating them, we'd all be a lot happier.
The wealthy people avoid walking through the Tenderloin. They spend their time in the Battery and the Modernist. They have no incentive to fix the situation there. None. Zero.
This isn't Europe where wealthy people enjoy a stroll downtown, and have some incentive to want to keep their downtown nice. The wealthy people in SF just go to Napa and take their stroll in a vineyard over there instead.
> Or get some form of functioning public transit?
The wealthy people don't use public transit, they just drive everywhere or Uber everywhere. Again, they have zero incentive.
To be clear, I really want these issues to be fixed, just stating the facts of the situation.
In Europe, social costs are borne by the middle class to provide a safety net for the middle class. In the USA, we expect the wealthy to provide for all of society. It is highly irrational.
Yes. In /most/ cases, the wealthy are only wealthy because they have (directly or indirectly) profited from the middle class. The wealthy should be paying a fair share of taxes in return, for upkeep of the public services the middle class use, and which the wealthy are perfectly entitled to also use.
The middle class should pay their fair share of taxes as well, of course, but for the most part, they do. They pay less taxes than the wealthy, because a significant fraction of their income does go toward basic necessities, whereas for the wealthy, basic necessities is a negligible fraction of income.
But we see so much bloat that they can’t ever get out of a deficit. That only keeps growing. A hungry maw that never shuts without ever solving any problem.
If 350 million dollars spent over 12 months can’t solve homelessness in SF. How much will it take? 600 million? 1 billion? 1.5 billion? What’s that “magic” number?
What do you think the wealthy spend their money on other than ‘basic necessities’? Why would anyone be wealthy and only spend on basic necessities? They spend on luxury. They spend on high living and expensive things.
So there are resorts. And staff that work in resorts. There are sports cars and people who work in those factories and mechanics who specialize in fixing them. There are private planes. And so pilots, stewardess, fancy cheese plates and catering services. If the wealthy aren’t allowed to be wealthy, we won’t have a whole swath of jobs.
If we want a healthy middle class, we should stop guilting the wealthy. We should allow them to spend their millions. It’s their money. Let’s hope and pray that they spend it and spend it well and spend it in all the stupid and obscene and wasteful ways. Because that would create a healthy working middle class.
Just allow CA zillionaires BE zilloinaires and watch the job markets flourish. Equality doesn’t mean everyone is equal, it simply means that everyone in their category is equal to each other. If we had economic equality for all, we’d be Cuba, not CA.
Instead of punishing the wealthy with higher taxes that go into Big Govt’s Maw, if we let them actually spend it...we’d have more circulation of money in the economy. Inequality of wealth occurs because there isn’t enough circulation.
Who spends more of their income? A paycheck-to-paycheck worker, or a wealthy person? The wealthy person puts most of their money into retirement accounts, college accounts, real estate equity, investment accounts, trusts, tax havens, shell companies... If you have 5 million paycheck-to-paycheck workers they will spend every cent; while if you have a single billionaire making exactly the same amount, almost none of it will be recirculated.
Once there's enough of it, it turns into political power. Which has a tendency to benefit the wealthy class, almost always at the expense of everyone else. At the other end of every single massive failure of government there is a very wealthy person reaping the benefits of the power their wealth has enabled: healthcare, military, housing, transportation, education... etc etc.
Just praying that they'll spend their money on charity or something that benefits everyone is not enough.
Money taxed from capital gains isn’t really the same as taxes levied on wages. This is very fundamental tax logic. Would you like me to explain why?
[..] The justification for a lower tax rate on capital gains relative to ordinary income is threefold: it is not indexed for inflation, it is a double tax, and it encourages present consumption over future consumption. ... Finally, a capital gains tax, like nearly all of the federal tax code, is a tax on future consumption.[..]
Even pension funds and unions invest in the companies that make the profit. Chicago Teachers Union, iirc, has over 45k shares of AMZN. They also took a guillotine outside a Jeff Bezos building to make a ‘point’. It’s just hypocrisy if one believes it and ignorance if one parrots the ‘eat the rich’ line.
So when exactly do people start becoming responsible for their own lives? Social net is for those who genuinely need help. The weak, unfortunate, disabled and for those who need a helping hand. Society cannot shoulder the responsibility to take care of individuals whose are supposed to know better.
Political power does not benefit the wealthy class at all. This is absolutely untrue, but is often parroted over and over without people questioning the meaning of it.
A lot of the attitude comes from people without looking into the homes of people who have means and wondering why they can’t have what someone else does..what they don’t see is the countless hours of hard work and sacrifice and time away from family and other things that people take for granted. Why do they do it? To be wealthy is one of the goals. It is absolutely cruel to punish people for chasing their dreams. Taxes on the wealthy is punitive because they have to pay the troll under the bridge to cross it.
When I see someone railing against millionaires about the drug addicts and homeless on SF, I want to ask if they ever asked the parents of these model citizens? Their blood relatives? Their so called friends? Their community? Their high school friends?
If everyone took care of 1. Themselves 2. Their immediate family 3. Their extended family 4. Their friends 5. Their community 6. Their extended community FIRST, we wouldn’t have to knock on the doors of millionaires. Who cares how the rich live...most of us should look at how we ourselves live and how our loved ones and those we care about live.
It’s like watching a child in a park watching a rich kid hack into an obscenely large cake. Another parent who is feeding his own kid a modest snack drags the starving kid to the rich kid’s parents and demands that they share their big fat cake with the starving kid. Hey! Isn’t it always easier to make plans for how others should generously share their wealth?
The problem is not ‘the wealthy’. The problem is lack of healthy community and healthy supportive families. No amount of wealth sharing or stealing from the rich or taxes or plain old money will fix it.
First, there will be those who are devoted to the goals of the organization. Examples are dedicated classroom teachers in an educational bureaucracy, many of the engineers and launch technicians and scientists at NASA, even some agricultural scientists and advisors in the former Soviet Union collective farming administration.
Secondly, there will be those dedicated to the organization itself. Examples are many of the administrators in the education system, many professors of education, many teachers union officials, much of the NASA headquarters staff, etc.
The Iron Law states that in every case the second group will gain and keep control of the organization. It will write the rules, and control promotions within the organization.
> THE GREAT PROBLEM IS SOLVED. We are able to explain social phenomena that have appalled philanthropists and perplexed statesmen all over the civilized world. We have found the reason why wages constantly tend to a minimum, giving but a bare living, despite increase in productive power:
> As productive power increases, rent tends to increase even more — constantly forcing down wages.
> Advancing civilization tends to increase the power of human labor to satisfy human desires. We should be able to eliminate poverty. But workers cannot reap these benefits because they are intercepted. Land is necessary to labor. When it has been reduced to private ownership, the increased productivity of labor only increases rent. Thus, all the advantages of progress go to those who own land. Wages do not increase — wages cannot increase. The more labor produces, the more it must pay for the opportunity to make anything at all.
A land value tax fixes our problems but Californians went and voted in Prop 13 which is about as far from that as you can get. http://www.henrygeorge.org/pchp23.htm
I was not aware that Henry George was from San Francisco.
For an introduction to his ideas, see wealthandwant.com. For more contemporary references, see https://schalkenbach.org/introductionto-the-ideas-ofhenry-ge... and that entire site.
That said, I don’t know anything about land prices in Texas right now.
During the normal busy hours in which people commute, no way. I can only hope all the construction going on along 183 will speed things up on the East side. The 290/71 junction is another nightmare during rush hour.
It's just that living with roommates is pretty frugal, and before the pandemic, it was a good way to save an extra $10k a year living in a more central location. Every single person I know who is a bay area SWE makes enough to afford renting a 1bed apartment in a good area, they just don't think it's worth it.
Yes if your main goal in life is to live in a large house on a large lot in a nice area without spending much, you will not find it there, but your characterization makes it seem like bay area engineers are poor which is... not true
In most cities in the US this is not the definition of wealthy or even well off. living with roommates to save 10K a year does sound like one step above poverty.
Sounds like every college student and recent grad I've ever known.
Meanwhile, in the majority of places that aren't the Bay Area (or urban CA), folks in professions like engineering are set up with nice suburban homes and additional properties by their mid-thirties.
I have seen many east-coast transplants move back after realizing that the madness is not going to end in the past ten years. Giving up access to the Bay Area job market, or existing social or family circles are perhaps the only thing holding folks back from getting the hell out of this area, I feel.
There are many folks who prefer city life, but I bet they would be found in much greater numbers in the 'real' cities: New York, Chicago, Los Angeles, Dallas, Houston, Washington D.C... San Francisco just feels like a slightly overgrown town with hardly any cultural amenities one would expect from a world-class city. It does have almost unparalleled access to very pretty coast, woodland, and desert all in three hours' range, though.
The second-class treatment of public transit over car-driving alone is awful. I don't have to worry about being stranded ANYWHERE in the bay because I didn't finish what I was doing by 5pm, unlike my last trip to Santa Monica.
But that isn't the choice, the choice is between three rental houses and a maybe 1 in 20 chance of owning equity in a high growth startup that may or may not IPO in the next 15 years.
Does this $600 million cover things like Churches sheltering the homeless, pantries, and such? Or is it in addition to the the $600 million? Something is very rotten here.
[1] https://sfgov.org/scorecards/safety-net/homeless-population
[1] https://sfgov.org/scorecards/safety-net/homeless-population
"Woke" politics magically appeared in 2008 when leftists were manning occupy wall street, which pretty much immediately degenerated into escalating virtue signalling instead of, you know, making some reforms to wall street. I'm sure that was a total coincidence.
Anyhoo, so what is the pet constituency of the left? They do appear to be falling over themselves to regularise illegal immigrants (perhaps the Latinos in Texas handing Trump a win will give them pause?), while doing nothing for legal immigrants (who power the only growth sector America has going for it, technology.) They certainly don't care much for the working poor, as you have rightly pointed out.
https://www.theguardian.com/global-development/2020/nov/06/c...
Pretty sure Gates is a Democrat! Yeah, man, Child Labor laws are so 19th century.
Someone may be having hard times making rent and go to a church or other organization for financial help and other services. Battered women, at risk children also exist and may require a shelter with more security or women only shelters - which are funded too. There are many other services that exist that use that funding.
I didn't see waste. Actually, I would go so far as say most charities that receive federal and state funding rely on reporting to receive those grants and funding and things are very transparent. HMIS is the tech side of things that build the systems to track and report on everything.
San Francisco has great weather, lots of well off people to panhandle from, and treats the homeless relatively better than its neighbors. It really is that simple.
https://www.sacbee.com/news/investigations/nevada-patient-bu...
It's not an urban legend, it's well documented and there have been lawsuits based on it.
Many others have piled on, so the burden has shifted to you. What support do you have for this being an urban legend?
Literally one search shows sources from across the ideological spectrum covering this:
https://www.nytimes.com/2019/09/14/us/homeless-busing-seattl...
https://www.breitbart.com/politics/2019/10/27/nyc-exports-ho...
[1] https://www.theguardian.com/us-news/ng-interactive/2017/dec/...
I used to work downtown (Oil & Gas Commerce building) and became friends with the night-shift security guard, who told some really shocking stories about how the Bass goons would drag the homeless into alleys and beat them, simply for existing in downtown Ft. Worth.
The cities that treat the homeless better, when confronted with a new influx of homeless, work to confront the problem with more spending and social programs, and the cycle continues.
There is NO WAY Sundance Security would do that. I personally know the security team members and how professionally they are trained, and I know the Basses and how they operate.
That's a horrible thing to say. And it is sad that you or anyone would actually believe it.
It's a tall tale that a late shift guard might enjoy telling, but it isn't the truth.
How many miles away from the city though?
But not actually near Austin enough for it to be a sane place to live and commute to Austin from (especially if you depend on public transit).
Doesn't the government technically own all the land in China and then just lease it to individuals? Slightly different system.
In fact, LVT would be unconstitutional at the Federal level today, but a Land Appreciation Tax would not.
[..] The justification for a lower tax rate on capital gains relative to ordinary income is threefold: it is not indexed for inflation, it is a double tax, and it encourages present consumption over future consumption. ... Finally, a capital gains tax, like nearly all of the federal tax code, is a tax on future consumption.[..]
https://www.investopedia.com/ask/answers/06/capitalgainhomes...
Unlike LVT, an appreciation tax is a transaction tax, which can be shifted to the purchasers.
If you want support for your causes in the US, you probably don’t want to compare it to a communist regime that scares the crap out of people.
Unless this was sarcastic...?
Also, a Land Appreciation Tax isn't really radically different from the status quo in the US today. Land appreciation is already taxed as capital gains, it's just that the capital gains tax is intentionally set to be low to incentivize investment. The argument here is that we should not only NOT incentivize speculation on land, we should deter it by carving out a "special" capital gains tax on land.
I’m guessing you don’t know that this was also true of America in the 18th and 19th centuries and a large part of how it became so wealthy. Especially when they kept using slaves long after it was banned elsewhere.
If your idea were put on the ballot it'd probably pass.
Prop 13 already locks people in. With this law they'd have an even bigger reason to bank land forever.
Since a high ROI in the short term promotes speculation (and not development), it seems like this would reduce speculation and the likelihood of bubbles forming.
Of course that's a ridiculously oversimplified view. There are a zillion different ways to stack this, which is what would happen in any case. To spur development and not just buy-and-hold, the law might be written to exempt certain kinds of improvement costs.
This is also why capital gains taxes don’t get priced into equities and securities.
I see what you are trying to say about capital gains taxes not being in the "price" of securities. But they are in aggregate because taxes inevitably have to be paid. The whole market can't go up without transactions pushing it higher. And all transactions that make profit get a portion pulled out for taxes. They quite literally act as a damper on how fast a market can move.
A capital gains tax is not “essentially indistinguishable” from a land value tax if rents rise and the owner never sells the property. The owner gets to collect increased rents for as long as his family owns it, and even his heirs don’t have to pay the tax on transfer (since capital gains are untaxed on inheritance in America due to the step-up basis and apparently also for the Chinese Land Appreciation Tax). Kevin Erdmann has written a good series of articles on focusing on the rental value of land rather than only sales prices: “A Conceptual Starting Point for Housing Affordability and Public Policy” <https://www.mercatus.org/bridge/commentary/conceptual-starti...>
The problem is twofold.
1. Americans view property as an investment while also wanting it to be affordable. These are mutually exclusive. If you want something to be a good investment you want it to become less affordable over time.
2. Renters tend to be younger, transient, non-voters with weaker ties to the community. Landowners tend to be older, established voters with strong ties to the community. This means the city council panders to landowners, and they pass policies which prevent development.
SF is the worst for this, the city is basically unchanged since the 1970s to the absolute and sole benefit of landowners.
There are wonderful examples of cities which pretty much default-allow building housing, like Tokyo. Tokyo is incredibly affordable, downtown starter-home/condos cost $200K USD, and people in Japan do not view property as an investment but rather as somewhere to live. More like a car.
Yes, prop 13 sucks, yes a land value tax is pointing in the right direction, yes rent control isn't helping, but none of these things are a substitute for the simple unit economics of supply and demand. Anything other than permitting tons of new building is at best a band-aid over a hole in the dam.
surprise, surprise, if you don't vote and assert your civic duty and rights, you don't get included in the process to decide the direction of society.
> view property as an investment while also wanting it to be affordable. These are mutually exclusive.
they aren't - investment is supposed to increase the efficiency of production, thus increasing the availability of said product. The issue here is that land is scarce, and can be made more scarce by various laws. Building/construction costs have decreased somewhat, but the major cost is the land, and lack of density leads to lower supply.
> Anything other than permitting tons of new building is at best a band-aid over a hole in the dam.
yes, this is exactly it. However the people _want_ low density, but affordable! Both cannot be true. And thus, here there is conflict.
You may have misunderstood, I'm suggesting it's not possible for something to remain perpetually affordable and be a good investment. A good investment becomes less affordable over time. A bad investment does the opposite.
For instance, nobody complains about how unaffordable AAPL shares are do they? That wouldn't make a lick of sense because that's the desired outcome. That's why you invest.
If you want housing to be affordable you don't invest, you buy. Like a car.
However it's not simple supply and demand. We have a ton of "speculative demand" which increases when prices rise and we can't reasonably stop that by building more. Yes California needs to build but even if we started Shanghai levels of growth today it's unlikely we'd get affordable cities before climate change renders the state unlivable.
We need to kill land speculation and taxes are the right way to do that.
But it is very easy to have cheap housing and lots of it without a land tax. If I could sign a 50 years lease with strong protections that might even be better for me than buying, and landlords would have the usual incentives to build lots of houses if there is demand.
The problem in California sounds like the landholders who are being rewarded are the ones who choose not to build more dwellings. Greedy landlords in high-demand areas would build more, because then they make more money. I'd rather rent to an apartment building of people than a wealthy middle class family. And they'd be making generational fortunes doing that.
There's actually another solution, but people don't talk about it: reduce demand. Break some windows. Have a few organized robbery parties. Hold monthly "Stabby Sundays" where you just stab people randomly. That'll drive down demand, and prices will drop like a rock.
Obviously, I'm joking. Building more houses is the only solution to the problem of "a lot of people want to live here" and "it's almost impossible to build new houses."
I don't know anything about Berlin, but in San Francisco, there are plenty of affordable housing requirements placed on developers of new apartment buildings. This ends up just making new construction MUCH more expensive, as a single unit has to support itself as well as some fraction of an affordable unit. The result is that it's even less profitable to build new housing.
One clear alternative to this public housing. In Vienna, for example, about a quarter of the population lives in social housing. And these are poorly maintained slums, these are nice, well-located and affordable apartments. The city/state can optimize for the actual housing needs of the city rather than for profit.
I would argue that housing, much like healthcare, can function better when managed as a public good, as there are too many perverse incentives at play when there is a profit motive involved.
Wrong. Without Land Value Tax the housing market simply doesn't clear. If there is no force to make house and land owners to sell to those who would actually utilize it better, they will sit on it forever until a huge ass corp or gov eventually buys them out for ridiculous price. As an owner you just have to wait while not paying virtually anything. Everybody else who actually needs to live, work or produce something in that location has to rely on new housing in ever increasing urban sprawling cities.
San Francisco is a prime example of this and apparently always has been as Henry George showed more than a century ago.
Uh, no? Suburbs reaching further out, without the infrastructure to support them, are not a happy ending. High risers in the wrong places cause infrastructure overload too. Putting high risers in the right places will ruin someone's vista. Hardly unsolvable, but far from "just build more".
So cap how far out you can build. Generally, of course, that already exists.
> High risers in the wrong places cause infrastructure overload too.
More houses means more residents means more jobs means more tax revenue. This revenue can then be plowed into shoring up the infrastructure to fit. That's what a city is.
> Putting high risers in the right places will ruin someone's vista.
And that sucks for them, but they've no right to a view.
This comes up a lot, but is false. It's easy to have every single home become more expensive over time while the average unit remains affordable. Let me paint a picture of how it would work in a city where you can actually build new housing at higher density.
Family buys single family home in year A for $100k. Lives there for a while, then sells in year B for $200k. The buyer is a developer, who then constructs a larger building on that same lot consisting of 4 apartments that now each sell for $100k again. Original family gains in wealth, developer makes tidy profit, new families can still buy a place to live for $100k. All numbers inflation-adjusted, you pick A and B to make whatever return you think is reasonable.
This is how density increases happened almost everywhere, until zoning laws became the new way to keep racial minorities out of white neighborhoods, roughly mid-century, after restrictive racial covenants (i.e., "when you buy this house you agree not to sell it to anyone non-white") became illegal.
Note what you don’t get out of this arrangement: a neighborhood that doesn’t change for 40 years; the ability to live in the same type of house your parents did, in the same neighborhood, for the same price. But you could have the same amount of (indoor) space they did, and outdoor space through public parks and the like.
What’s not sustainable is everyone having a suburban style detached single family home without increasing density in perpetuity. That is what leads to this contradiction.
The non-density alternative is sprawl, where prices rise in long-established neighborhoods, and outlying new developments are where you can buy new houses for less—which is what you observe all over California.
This feels transient to an extent no? At some point your building is tall enough and your unit as small as people are willing to accept.
But does this not apply primarily to the land underneath the building? Once you reach a certain plateau a 700sqft apartment on the 10th floor of a 50 story building isn't worth any more than an apartment on the 10th floor of a 70 story building is it?
Yes, there is an endgame here -- and also, truth be told, construction costs per unit start to go up once you pass 4 or 5 stories, so there's other economics at play.
But that endgame is Tokyo or midtown Manhattan, and we're not close to those levels of density basically anywhere on Earth -- and certainly not in the USA, where you can count with one finger the number of cities that might not be able to increase density because the buildings are so tall it's hard to imagine building more-attractive taller ones.
> But does this not apply primarily to the land underneath the building? Once you reach a certain plateau a 700sqft apartment on the 10th floor of a 50 story building isn't worth any more than an apartment on the 10th floor of a 70 story building is it?
This is an interesting question -- in my example, you might think it's pretty clear that a single condo in a 4-plex would be less valuable than the same land area with a single family home (even if all 4 units together are worth more). But it's not clear why a single condo in a 25-story doorman building is inherently more valuable than a similar condo in a 50-story doorman building, which is basically the only density increase that's realistic -- and in fact, maybe the larger building supports more amenities, making the individual units more expensive as density increases? Also, this level of density supports rapid transit that allows for more effective geographical distribution than the "freeways choked with traffic" sprawl we're seeing today.
That said, this is not the situation that SF (or really, any market in the USA outside of Manhattan) finds itself in. In all these cities, developers could build a larger number of less-expensive units to replace more-expensive lower-density units on a given land area (and still profit! And increase housing supply!), if they were allowed to by zoning and other (typically local) policy.
If we socialize education and then young people and then the middle aged who can’t find affordable homes and yet need to be home owners and then the retired public sector community. And then special groups. Who is left? I guess the ones who are actually paying more into the system than they are taking out. It’s like the oxen that plows an entire field with the poor farmer whipping it’s hide. Why not?
All the jobs out there except a handful are fluff jobs with no real production value. Yes, I am glad someone is making my latte at Starbucks but at the end of the day, I am also paying for that. To maintain jobs so that everyone can be employed. As the pandemic proved, we can do without Starbucks. The value of most of the non productive job is to provide the public a wage so they can be consumers to purchase from the producers. Like smart phones. Or a car. See the pattern?
So all this cultivated vote base need to be cared for and fed. This is when you bleed the tiny tech community by injecting them with guilt and self loathing for being b productive and wealthy. This is usually done with clickbaitey articles and outrage porn publishing farms and social justice yellers.
Now you have a large vote bank that will keep voting yes to taxing the tiny little taxable sector(many of whom probably don’t even vote if tech employees come as immigrants and are not voting citizens).
San Francisco keeps throwing money at problems that don’t get solved because it’s not their money. When there are 12 people in the room and the vote is yes or no for taxing just the top two wage earners in the group, why should it be surprising that it’s at least 10-12 for YES on taxation.
For one, you’re not paying the Starbucks employee so they can be consumers out of the goodness of your heart. They’re charging what you’ll pay because that is capitalism.
If you don’t want to pay the Starbucks employee, you don’t have to. You can go brew your own coffee, but you probably figure $2 isn’t worth your time so instead you’d rather just pay them for the convenience.
The other great thing about all this is if you don’t like how San Francisco wants to tax you, you can leave. And it’s not even like leaving the country or even leaving the state. You don’t actually even lost anything of substance.
There is a reason tax havens exist. And why socialist Europe has Riviera and why we have Jackson Hole. It’s this jealousy towards elitism that’s creating WIDE gaps in inequality.
There will always be inequality. What we need to offer is opportunity for the willing and ambitious. Slamming it as ‘elitism’ is shaming the ones have what we don’t.
This is ruinous. We should instead create a more driven and ambitious society. Not one that wants a piece of someone else’s cake. Starting with..stop shaming the rich. And stop taxing them.
I want the rich to love obscene gorgeous insanely hedonistic lives. Because such a lifestyle will infuse spending and profit back into our economy.
The ability to pitch a tent almost anywhere, free from police harassment, is pretty great if you’re homeless.
Likewise the public transit system is pretty great if you’re a transit worker, or someone who wants an indoor third space but whose appearance/behavior/smell would tend to get you thrown out of Starbucks, or if your best alternative is to walk.
San Francisco isn’t failing. It just values these people and their needs a lot more than it values the comfort and convenience of tech workers. If you don’t like it, vote for a moderate instead of a progressive in your next BoS election.
A public transit system is a huge advantage for upper middle class professionals, and even more so when them homeless are housed. This can be seen in developed countries that have good public transit systems.
I started talking to people living on the streets and my opinion is that the problem can't be fixed by throwing money at it. Some people don't want to get free treatment, a shelter bed, or transitionary housing because of drug addiction, mental illness, a dog who can't accompany them, etc. A lot of them travel to SF because of how much we spend on homeless people, and it used to be pretty common to find people reselling food bank donations on the street for a fraction of grocery-store prices.
If it was up to me, I would tell people that they either need to accept help to get back on their feet (I've witnessed the Homeless Outreach Team doing great work) or leave the city. However, espousing a "get tough on homelessness" attitude would be vilified by our political climate, so it won't ever be up to me.
You and me both, the solution is really straightforward. I feel like homeless in general falls into 4 camps:
camp 1 - drug addiction, this one would be to get people off the streets, Open rehab clinics, get them clean, and back into a functioning society.
camp 2 - mental illness, This one would be opening mental institutions(Reagan closed these in the 70's which led to our current culture of homelessness in alot of large california cities). Money would go towards either medication to get people in a functioning state or full time commitment based on severity.
camp 3 - Those down on their luck, this one would be the easiest as job skills could be taught along with temporary free housing and counselors to ease the individual back into a job, once a job is found a stipend towards rent can be given until the person is fully independent again.
camp 4 - Those that want to stay homeless. This is the most difficult group to deal with, and having them escorted out of the city would most likely be the only solution.
Need to find ways to help the mentally ill, and shovelling pills won’t cut it, we need comprehensive programs.
Idk where I'm going with this except to say it's complicated.
1 and 2 are either your largest groups or at least very large groups.
Getting addicts ‘clean’ is a sub problem at least almost as hard as the general, and it’s somewhere between hard and impossible to keep someone in a rehab or a mental facility against their will, and I doubt Reagan is to blame for that.
Basically, a large proportion of 1 and 2 are effectively in camp 4.
I was hoping to get a feel-good story out of it after reading about Leo (https://www.businessinsider.com/leo-the-homeless-coder-2015-...), but the truth of the situation is he simply wasn't skilled or educated enough to actually learn computer science or even get past a phone interview (meth really ruins one's ability to maintain a train of thought). Somebody told him the legends of high-paying tech jobs in SF, and reality was a harsh teacher like it is to many people everywhere. He lived in shelters and on the streets for a while until he lost his phone, which was my only way of connecting with him. Haven't seen him on the streets for years and no idea what ended up happening with him.
My point being that people have really complex reasons for being homeless in SF and it's hard to put everyone into distinct groups, but for the most part your camps describe at least 90% of homeless people I've seen.
Now just to be clear I’m not saying that any homeless person can learn how to code and get a job. I’m just saying that in my case I was what many people consider homeless, learned how to code, moved away from the city to Northern Europe, and then happened to get a job in the industry.
I would like it that we can as a society find ways to help homeless with their issues and manage their lives in a way that isn't just each city tossing them out.
That said, I'm not against someone's honest decision to say, well I don't know how, and in the mean time, I want them out of sight so kick them out.
But, and this is the but I feel is never discussed by those who propose that solution is HOW?
How do you kick them out? What if they resist? Arrest? Jail? Now who pays for that? Should we just fire gunshots at them? Force relocate them, and if they come back? Erect barriers? What else?
The TL is a lot worse than in 2013. There are more needles, more open drug use, more break ins, and on and on.
>back then, there was a guy on every street corner trying to sell you something, and certain alleyways/corners where there was daily cleaning for piles of human waste.
Literally nothing has changed. This is still the reality.
Shelters require folks to line up for entry in the early afternoon. Many unskilled jobs require late evening work (restaurant dishwasher, line cook, bus boy, janitor, etc). So folks leaving work at 11pm cannot get into the shelters.
Shelters kick everyone out in the early morning. Folks who work at night cannot get in to shelters at all. Night shift work is very important for unskilled folks (security guard, janitor, warehouse, etc).
Also, many shelters are run by religious organizations and require guests to spend time attending religious presentations every day.
I think 80% of the homelessness problem can be solved by providing free housing for these extremely poor people. Housing will not turn them all into successful citizens, but it will stop them from sleeping on the streets. Comprehensive health care (including therapy and long-term psychiatric care) can solve another 10%. The last 10% are folks who just prefer to live on the streets.
Unfortunately, free housing in SF is very expensive because of the housing shortage. The city already houses many formerly homeless folks, spending $200M/year. Housing the remaining 8,000 would take at least $200M/year more. This would be a 4% increase in SF's $5B annual budget.
SF's spending in 2019 was 12b dollars (roughly $12,000 per resident).
Of that, 1.6b went to MTA ($1600 per resident, or 13% of total spending) and 360m went to addressing homelessness ($360 per resident, or 3% of total spending)
Comparatively, SF's GDP was 500b (500,000 per resident).
To conclude that we're spending all our money on this and getting no results seems wrong when we're spending so little of our budget, and our budget is so little comparatively to the economic activity.
*(these numbers are from http://openbook.sfgov.org/portalpagehelp.html#sfopenbook 2019 spending)
1. https://hsh.sfgov.org/wp-content/uploads/2020/01/2019HIRDRep...
If you use the estimate here (https://sf.curbed.com/2019/11/20/20973811/sf-homeless-count-...) that 18,000 people are homeless at some time in a given year then the figure goes down to 20,000 per homeless.
Also consider that an additional estimated 9,500 each year would be homeless if not for SF's existing supportive housing services (https://sf.curbed.com/2020/3/4/21152501/san-francisco-homele...)
Plus people being evicted. In 2019 there were 1600 eviction notices (https://sfrb.org/sites/default/files/Document/Statistics/18-...). If we assume that even just 25% of those are 4-person families, that's bringing us to around 10k a year per homeless/at-risk resident (and that's not even counting those who are at-risk of eviction but did not get evicted thanks to SF's existing eviction prevention resources.
Say you had a $100k homeless budget, and 100 homeless folks. You’re spending $1k per resident.
But say your program REALLY works, and now you only have 10 homeless folks. Then, your program is spending $10k per resident!
the program didn’t get worse. As your program gets better, you should be spending MORE per resident, not less.
2012: 7.3 billion for 829,027 people = 8805/resident 2020: 13.7 billion for 896,047 people = 15289/resident
Why did the budget increase 51% in 8 years when the population increased by 8% (1.13% inflation)?
And also in general I am not sure if it makes sense to tax millionaires or billionaires at the city or state. They'll just move some place else. Just ask New York[1]. After NY imposed a tax on the uber rich. All of them moved to Miami and maintain two residences. One in NYC and one in Florida. IF you tax its best to do it at the country level
https://www.nytimes.com/2020/09/07/nyregion/wealth-tax-budge...
The ideal solution to being more efficient is also usually not by cutting budgets.
Fixing policy issues especially doesn’t come from changing budgets.
SF resident for 15 years until I left.
I walked around and talked to homeless. From the dozens I have talked with:
1. They are not from SF.
2. They were homeless somewhere else and it sucked.
3. Pan handling cash is easy. $100+ a day.
4. The SF programs kick ass. Suboxone clinics, Free cell phones, free bus passes, monthly stipends $$, even occasional housing
5. The police do not hassle much, you can shoot up on the street no problem.
It is a system designed to create more homelessness.
1. A lot of rich residents and rich companies which supply the city budget with sweet sweet tax money
2. A lot of programs and NGOs that draw large budgets to helping the homeless
3. Political climate that encourages spending money on helping the homeless without requiring anything from them, basically free money
4. Generous programs providing various freebies for homeless people, and no consequences for any behavior short of major robbery (yes, shoplifting is allowed too unless it's over $900)
5. Mild weather that makes living on the street possible year around
And we're wondering why homelessness has not disappeared? There's nobody that is interested in it disappearing, that's why. Well, at least nobody whose opinion matters, anyway. There's a lot of people interested in allocating and spending budgets on fighting homelessness, these aren't people interested in doing something that will make it stop once and for all.
If there exists a complicated social problem that involves thousands of human beings and someone on the internet claims to have an explanation for it in 10 paragraphs or less, that explanation is probably overly simplistic.
If the milk of human kindness is all about spreading the wealth..how about spreading the wealth to other countries?
Why should I pay for the homeless in SF when they live in the richest country in the world when I can send the money to Kenya or Vietnam or India and truly create meaningful impact. And so that’s what I do. My taxes already pay towards the healthcare, food and if in SF..smart phone and BART tickets for the homeless. No more tax hikes without an explanation for the $350 million dollars spent in just one year for SF homeless population.
It is always good to get a reminder that for every USA resident the government leaves behind there are hundreds of impoverished non-USA citizen that still has to pay for it.
The USA does not steal wealth from other nations. Please substantiate this comment with an example.
Wealth is not an indicator of quality of life. I have seen this over and over again amongst the rich and the poor. All we can do is live well so we are not a burden to others. The next best thing to do is help when we can.
What I am against..on principle..is that we look to someone else for our happiness. Or survival. I am an immigrant too. I left my country of origin for one reason and one reason only..upper economic mobility. Many immigrants cause reverse brain drain. I have a better quality of life and I can uplift people within my circle of influence. I can do better as an American than as a citizen of my country of origin. And I enjoy the comforts of my new life. And that’s fine with me. I don’t believe we can heal the world by squeezing the hearts of the collective rich.
I don’t understand why I should support someone who doesn’t want to leave SF because it’s chill while I had to leave behind my native country, my family and friends and all things familiar because I wanted the same thing as them. Comfort and quality of life. Only..I was willing to make sacrifices and trade offs. It’s difficult to empathize because it would make a mockery of the sacrifices that I had to make because I wanted something. We can’t ask others to sacrifice their money because some people don’t want to make any sacrifices for their own desires.
We have seen that money doesn’t solve problems. In SF alone..350+ million did not solve homelessness or drug addiction or mental illness or despair due to poverty.
So what is the answer. If the pitchforks against the rich are laid down and the energy is properly channelized to find meaningful solutions, we will get somewhere.
My motto: Do what you have to do. Others are not a measure. What I am NOT is a fan of guilty self flagellation. If I am not going to flagellate myself, why would I allow others to do it to me?
This is a really good and important point. I immigrated from one of the wealthiest countries in the world to the USA. Off course I made sacrifices while immigrating but those sacrifices were not nearly on the same scale as someone immigrating from a place of poverty. I can still visit my family regularly and they can visit me (even though they are of working class; if it were not for a global pandemic off course; for me it’s not that expensive even if it is a little expensive for them). If anything I should be trying harder to empathize with you.
In honesty me and my partner always had the option of moving to my place of origin, they could enjoy the free education we provide there and get a degree there instead. If I were not from a rich nation that would not be an option. In honesty we choice to live in a van. Sure we were underprivileged to the average San Franciscan, but as an immigrant I had it pretty good. And it wouldn’t have been the end of the world if we were forced to live in my country of origin.
We actually ended up moving there anyway. But it turns out that even though USA is officially pretty hostile towards immigrants, my country of origin is far more xenophobic then Americans are, so we ended up moving back (me being a white person probably has a lot to say about the acceptance though).
I know I didn’t really answer you in a meaningful way here. I really only said that your voice matters as much—if not more—as mine. After all I am a person of privilege by virtue of both my skin color and my place of origin (even though I’m born of working class). So to third party readers I guess I’m saying: Read the parent carefully, and understand their perspective. I might have a lot to say because of my experience of living in a van in San Francisco, but there are other people—like the parent—that also have a lot to say, and their perspective is just as valuable—if not more—then mine.
It cuts both ways. I can’t make any assumption about anyone’s privilege or lack of simply because it’s none of my business and your privilege(or lack of, as the case might be) doesn’t impact my life at all.
However your actions directed towards me and it’s impact on my life would be subject to observation. There are concentric circles of influence for every individual. Yours and mine might never meet.
Imagine you walk into a theatre thinking it’s going to be a Hitchcock movie. After the 12th minute, they start showing Groundhog Day.
They ask you to come back the next day.
You return. Again, after the 12th minute, Groundhog Day. Again, they ask you to come back the next day.
And they don’t return the money you paid for your ticket. Or a credit. You have to pay for a ticket again. Everyday.
Now. How often are you going to keep returning to someone who steals from you and knows you will return. Meanwhile, any theatre next street is playing the Hitchcock flick.
What would a reasonable rational person do?
I don’t really follow your theater analogy, perhaps you can provide an alternate argument so I, and others can understand why you feel that resources are scarce, limited, and the objectives are mutually exclusive.
2. Please elaborate ‘..we can do both’
And who is ‘we’? Peter and Paul want to tax Bob to hand over $$ to Jack and Jill.
You could argue there's enough money to solve both problems, and a tax on the wealthiest would help accomplish that. that is a view I'm very sympathetic to.
But I think the comment you're responding to is making the first point, rather than the latter.
The rich have polluted the planet, raised the global temperature up a whole degree. The damage is that now I can’t go outside in late summer, if it doesn’t rain the week before, because the air is poisoned by soot from forest fires. The rich are the reason I couldn’t afford a place to rent in San Francisco, their speculative housing investment and gentrification raised the marked rate so much that a working class person from one of the richest country in the world couldn’t afford to live there. The rich are the reason—unless you are one of them—that you are not making significantly more money from your current job, they consistently take away from your contribution to the wealth you generate in your current job without contributing anything of value.
Actually, for a significant part of Bay Area - anybody who is working in a startup or a company that has been a startup (including Google, Facebook, Amazon, Twitter, etc.) "the rich" are the reason they have a job and a salary with which they can afford not being homeless. Who do you think makes up VC capital from which startup investments are made? I don't idealize rich people - as a whole, they have the same percent of assholes and criminals as any other group, and as people with many resources their assholery has an outsized impact sometimes - but claiming "the rich are the reason" for all problems and without them we'd all be paid tons of money of of somewhere magic - is just sheer idiocy. Sorry, I lived in a country where (almost) nobody was rich, at least legally - and it was shitty. I do not recommend it to anybody.
Sorry but in my experience nothing ever good comes out of K shaped economy. I have a good reason to be salty towards the rich. I know that currently they are paying my salaries, but I am also aware that I am contributing more towards the wealth they are retrieving then I am. So strictly speaking I don’t need them. But even so, I would be fine if my entire industry would collapse and would leave me unemployed if it meant that the wealth the rich folks are accumulating at record pace would be distributed towards the working classes of every nation. I would rather make minimum wage in a world where that was the norm then to be taken advantage of by a wealthy class who consistently adds to their own wealth while the rest either stays the same or gets poorer.
Iceland I guess? If you like what you've got, don't try real actual socialism. Believe me, it sucks. You'd regret it.
> I have a good reason to be salty towards the rich
If my guess is correct, you experience is an unique result of a very bad situation which was manufactured by some dirty politicians, some PhD'ed idiots and some greedy bastards (see my comment about the assholes above). That doesn't mean everybody who is rich is a bastard. Having money is a wrong marker, and your saltiness is way off target.
> it meant that the wealth the rich folks are accumulating at record pace would be distributed
That never ever happens. I mean, even if it happened it would amount to tiny crumbs for you ("you livelihood and all you've done for living are gone and you have no means to support you family or procure food, but here's your check for $275, enjoy it!") - you can't both whine about "tiny number of people owning stuff" and expect taking their stuff would make you rich - "tiny number" means you only get a tiny part of it. Arithmetics is a cruel science.
But in fact there's no "distribution" ever possible. Never happened, never will. There's only destruction and desolation. It is possible to target Bill Gates's wealth and destroy it. Shut down Microsoft, make all its workers unemployed, blow up the campuses and wipe out the backups. Can be done. You won't be even $275 richer from that though. Nothing will be "distributed", just destroyed. This is the only way it has ever worked or can work. Revolutions do not make anyone richer, but they do make a lot of people starve and die.
> I would rather make minimum wage in a world where that was the norm
No you wouldn't. I lived in that world, and I haven't seen any single person who after experiencing both wanted to remain in the minimum wage world. Millions wanted to move out and took extraordinary efforts - often risking their lives - to do it. Remember the Berlin wall? Why do you think they needed the wall - is it to hold out the West Germans itching to experience the blessings of the East German minimal wage? How many South Koreans you think want to move to North Korea to enjoy the guaranteed rice rations?
> a world where that was the norm then to be taken advantage of by a wealthy class who consistently adds to their own wealth while the rest either stays the same or gets poorer.
But that's not true. The rest doesn't get poorer - in fact, the number of people living in poverty is declining steadily. Yes, I know you had a bad experience in 2008, but if you're willing to have a broader look you can easily see it: https://ourworldindata.org/extreme-poverty
Rich people aren't tipping over trashcans or shitting on my sidewalk.
> raised the global temperature up a whole degree
This doesn't actually affect you, you've just been brainwashed into thinking it's the most important thing ever. Emissions are going down in all of the most highly developed countries. As technology improves, this will improve as well. You're complaining about progress that has lifted billions of people out of squalor to having powerful computers in their pockets and being able to transport goods across the globe.
> The damage is that now I can’t go outside in late summer, if it doesn’t rain the week before, because the air is poisoned by soot from forest fires.
Maybe they should do some forest management with the billions in taxes they take every year, instead of giving it to street-shitting, drugged-out hobos.
> The rich are the reason I couldn’t afford a place to rent in San Francisco, their speculative housing investment and gentrification raised the marked rate so much that a working class person from one of the richest country in the world couldn’t afford to live there.
When demand goes up, and supply doesn't, the price goes up. This isn't rich people's fault, it's basic supply and demand.
> The rich are the reason—unless you are one of them—that you are not making significantly more money from your current job, they consistently take away from your contribution to the wealth you generate in your current job without contributing anything of value.
They provide you with a job. You are free to start your own business. Rich people can't stop you.
No one owes you anything.
Are you seriously equating globally warming the planet with littering? Yes the latter is annoying but the former is literally killing a significant number of people around the world every day. You can’t blame the fires solely on bad forest management. Yes forests in California could (and should) be managed better, but with the climate disaster fueling them I think those effort would be futile.
> They provide you with a job. You are free to start your own business. Rich people can't stop you.
Again, seriously? Reality check, if this were an actual option more people would do it. How many people get rich (or are able to at least make a living) after starting a business from a working wage? In the real world, normal folks can’t afford to start a business, and even if we could, the risk of failure is too great for us to risk loosing everything and ending up in debt for it.
How much more? US has over 31M small businesses. How many do you need to conclude it's an option? 99.9% of businesses in the US are small businesses (obviously, since you only need one person to make a small business and 100K persons to make a Walmart). If normal folks can't afford it, who are all those? I know several people having businesses, in what way they are not "normal"? Not all of them are rich (in fact, most of them aren't, most are making a good living, some better than others, but none I know are billionaires so far) but how this is not normal? I think your picture here is very skewed.
But this dichotomy of homeless vs. the rich is really silly. You have less to fear around the rich because they are rich, the homeless might be in a desperate situation and behave accordingly, or as put in the Movie Parasite:
> Ki-taek: They are rich but still nice.
> Chung-sook: They are nice because they are rich.
The danger the rich pose is not something they do to you as you are walking home. It is something they do to the planet (like spilling oil or emitting massive amount of carbon), what they do through the legal system (like evict you), or even just fire you, paying you unfairly, stealing from or influencing your government, etc.
I live and work in the Portland, OR area. Homelessness is a real problem here, and they are moving out of the city into the suburbs.
I’d want to focus enforcement on criminals (homeless or otherwise) and people who are a danger to public health rather than the homeless in general.
1. I’m not from SF, I came there to live with my partner who was in school there but we couldn’t afford a place to rent.
2. I’ve never been homeless anywhere else and I wouldn’t have been homeless in SF if rent was fair.
3. I’ve never pan handled, but I didn’t need to. Dumpster diving is easy, there is plenty of free food options (including free farm stand with organic vegetables; I also cooked for food not bombs but that was more for the fun then the food).
4. Didn’t get any free phones, paid for my own bus fairs (or just jumped the muni).
5. Police never hassled me too much. Only one time when I parked near Dolores Park too see if they had their porta potties open all night (they didn’t). Police advised us to stay out of this neighborhood. We did and moved back to a friendlier neighborhood in the lower mission.
6. Showering is impossible for the homeless. I could really only shower and shave once a week. I had to wait in a line for a ticket at a charity and then wait there for an hour or two at a cramped space for my turn. Sometimes I would sneak at my the campus of my partner’s school and steal a shower.
Speaking from experience the only thing that is creating the homelessness in SF is lack of reasonable, affordable, and accessible housing options.
The question how representative are you of the general homeless population in SF. I would guess not much. Am I wrong?
Note that I never considered my self homeless. My 1981 VW vanagon—which we named Sunny—was a plenty good home for me. It was the first home I bought with my partner and we had a really good life in it. We would have stayed in it longer if it wasn’t so difficult to immigrate into the USA. But I know—and understand why—many people consider that homelessness.
Street parking everywhere because parking garages are being converted into affordable homes for people who can’t afford to live in one of the most expensive zip codes in the USA.
Homeless people who park their RVs and vans in public parks and open spaces are removing them from public consumption for those who paid taxes to maintain these spaces and commons.
The homeless worker ..one of them..had more benefits than the young girls. I wish I could have worked more with them. People need help. The right help at the right time for the right people is more effective than blanket free for alls.
He was living in his grandmother’s two million dollar Mountain View home and the first thing he asked me was if he could smoke his pot because granny wouldn’t approve...while the girls were huddled and chaperoned at all times.
I would pay more in social taxes if I could choose the programs and if there were more transparency as to where that extra money went.
[The homeless worker] was living in his grandmother’s two million dollar Mountain View home
and I have a hard time imagining why anyone would consider that "homeless". Could you elaborate/clarify?
Because he was in jail twice consecutively and was out on bail, if he could claim mental disability he doesn’t have to go back. But if he can claim mental disability and homelessness..citing them as a reason not to work, he could get benefits for life.
He skipped something legal and was at risk for going back to jail. So he just claimed that he was sleeping on the streets and didn’t have an address.
Look..he was really smart. At that point, I really wanted to help him and I can even appreciate some lateral thinking for problem solving. I didn’t mind that he was using a break to get back on his feet. If someone says they are mentally disabled, I am going to believe them and not question it.
But he was doing things that made me feel unsafe because he was setting up the stage for me vouching for his mental instability if I were questioned. Like fire. He would get the blow torch for everything..wasp, weeds, gophers. I have worked previously with the homeless and previously incarcerated. And the most harrowing, addicts. With the former, it’s easy to integrate them back into society. A lot of times you know when you are being lied to and that’s ok too.
But our loopholes are so gaping in CA that people who need help are not getting the right kind of help. And it’s nuts to keep doing the same thing again and again ..and keep expecting the same results. And just throwing more money at it is not doing it differently. A lot of organizations, non profits and sub contractors who win bids are making more money than what actually goes to the homeless people. Homelessness alleviation is an industry of its own. Without the homeless, there would be a lot of jobs that do homelessness outreach. Which by itself could be a way to prevent future homelessness. But that’s just creating jobs to give people money..those needing other kinds of help are not getting it. Because at the end of the day, money doesn’t solve the problem entirely.
https://www.provost.usc.edu/initiatives/wicked-problems/home...
I played along because I knew she was harmless. Then one day the dog disappeared and my general rule at the farm was not to leave any tools outside unlocked. Someone must have left a shears outside one evening. When I came back, she had gone on a rampage at the lavender field and shredded the greenhouse plastic. I don’t know if she was ill or she had lost her meds.
I had to call the cops and I had to check with insurance. I did not want her in jail. I only wanted her to get her meds.
But the cops(they were remarkably kind and they were already frazzled by this kind of issue in a semi rural area) said their hands are tied. They literally can’t help her or get her meds or even find out if she has any next of kin without arresting her. Because of fourth amendment and privacy issues. If booked, she could get fingerprinted. And then they can find out if she is a missing person or if she has any prior history etc.
This was difficult for me. I agreed that the next time I will file a complaint because I didn’t want her to be in the system and on police records. But she never came back. We’d never know what happened to her. She disappeared..just like that. Did I do the right thing? I don’t know! Did the cops have enough authority? I don’t know! There are homeless advocates.
Because I have a story for that too. There were a bunch of young homeless people who became squatters in my farm. They stole things. Used the place to sell drugs. Stole electricity. Destroyed my property and fencing multiple times. Again the cops couldn’t do anything. They had to go via the homeless advocates and non profits because cops are not allowed to deal with this issue. But are they drug dealers(and we are not talking marijuana here) or homeless people? Net net, I have to absorb the losses on a farm that was not making much anyways. Worse, they were cutting the trees by the creek, build bridges from the greenhouse lumber they cut, made make shift ‘apartments’ and cottages with plywood and tarp... and pooping in the creek and I would go every weekend and pick up poop, condoms, needles because I grow food. I can’t have stuff like this around. And the homeless advocates did nothing while they continued to trash my farm and made it their sales HQ.
And start ups. Don’t get me started. A billion dollar company that could have provided safe solutions to mentally ill and homeless population BACKED off from selling their product because they didn’t want to work with the police. Because it would affect future funding and the woke progressive climate in SV won’t look favourably on anyone who works with cops and law enforcement. The clowns had taken over the circus when the employees tender woke feelings matter more than delivering actual solutions to the needy. This is tragic. And I will not pay any more taxes to enable this lunacy that is The California Democratic Goat Rodeo.
To provide a more detailed explanation. They were already renting a room when we met, and their landlord (who was them self subletting from another landlord because they couldn’t afford their own rent even though they have rent controlled price from the 80s) didn’t want us both living there.
My partner had a year left in school but they finished quickly because we didn’t want to push my immigration status.
I honestly think SF and Seattle need to be tougher on the street-homeless but IMO it's important to remember that there are a lot more homeless people than the obnoxious ones. Those are just the ones you notice, because they are obnoxious.
Actually the ratio seems higher if you compare street/outside/tent/encampment/abandoned building vs. the other options.
Again, the people sleeping in homeless shelters are still homeless, you probably just don’t notice them because they aren’t causing trouble
I want to tax the hell out of the rich, not just to get money to manage our shared spaces, but also to take their money away from them. In my eyes they don’t deserve this money. Me and my fellow laborers worked for that money, but they get to keep it. For me this is unfair, and unjust. In my perfect world the rich would not only pay marginally higher taxes, but they would pay most of their income in taxes. A person making a million a month should receive less after taxes then a person that makes a thousand. That for me is a fair economy. And that is the reason why I—and many like me—want to see the tax rate of rich CEO raised to 100%.
I hope you see which taxation function I prefer from this ;)
I am excited to see a new generation of corporate leaders rediscover stakeholder capitalism and reject shareholder primacy. Pay employees more, reduce leadership pay and watch markets expand as a result.
Bur + eau + cracy
People need to see taxes as a monthly subscription that makes life around you better
When you don't have that, most of the time, you'll grow up and be homeless, or your kids will be.
But the homeless of today are just a symptom of deep rooted problems, throwning money on taking care of them now won't make them disappear.
Yes they do. Have you ever parked on the streets of SF?
What’s pathetic is social media’s projecting ignorance and air gapped criticism. I see little to no alternative options offered, despite all the economic huff and puff and engineering wisdom supposedly possessed by that community. Same banal political speak.
A little less “Monday Morning quarterback” and a bit more connection to facts would be great.
America is a bit into sitting on its butt complaining at the screen though. IMO that’s the real credibility issue in this nation; so called exceptional, gritty people sitting around complaining about systems from afar.
You think they can’t figure it out? Or do you think more people are pushing protectionism of their luxury.
Portugal showed us how to deal with a number is drug issues. Where are the sustainable programs? Mired in American identity of absolute free choice, despite a heavily gerrymandered electorate.
Whatever the net positive here is wholly negated by the number of stable long term jobs that are going to go away and be replaced by whoever the body shop chooses to send that day. Working for these middle men really sucks compared to working for whoever the service is being provided for (and I say that from experience).
The pandemic has given most companies a good reason to do so already and my bet is on most of them not returning to their overpriced San Francisco headquarters when this is eventually over.
It helps that they are also much more new housing friendly than SF and SV.
But again, the pandemic and rise of remote work makes this hard to predict.
Until the next ones comes. That could be in 1 year or 100 years. No one knows.
Reminds me of the repeated hurricanes that drive people out of coastal areas.
People still live in coastal areas, and rich people continue to build lavish vacation homes on the coast despite the fact that they're washed away by storms every couple of decades. Part of being rich is not having to worry about money, which is why many rich people live in cities, states and countries that tax them more: the benefits of doing so outweigh the costs. I think you can draw parallels between that and companies choosing to remain in cities for similar reasons despite some drawbacks existing.
Think about hedge funds, bond traders, etc. For example, they will be all firing desk support people and replacing them with RobertHalf.
I am aware that I am a part of the problem: my wife and I are white, yuppie, dink tech workers. :)
These issues are complex.
I voted yes on Proposition L: the tax is quite small and I think the tech firms are unlikely to leave, meanwhile SF can get more taxes from them (many of them were historically given tax breaks, like Twitter, to move into the mid-market area). If they do leave, I don't see that as a bad thing.
Meanwhile socioeconomic disparity is an oozing sore in San Francisco, we have billionaires rubbing elbows with homeless people every day. Nationally, we've had round after round of tax cuts for the wealthiest, if SF wants to tax excessive income disparity, I say, fair enough.
a personal wealth tax is not felt or distributed down lane. As long as it is not a company tax, it will not be directly pointed to the buyer.
Yes it would be. A tax on salaries, would force companies to have to pay more to attract talent.
And these are additional costs that the company would have to pay.
Alternatively, if some aspect of your process like sugar is taxed then companies seek alternatives like corn syrup. That extends to property taxes, executive pay, etc where companies seek alternatives to better utilize resources. Though in the case of salaries that my end up as various executive perks.
Taxing land value -- that is, collecting the lion's share of the annual rental value of the land for public purposes -- removes the speculative element, and makes it worth only what it is worth FOR USE.
That almost always creates jobs, first for construction, and then to utilize the space. It may create housing, and goodness knows, much of California is in desperate need of housing. And housing creates jobs -- houses and highrises don't maintain themselves.
Virtuous circle --- the opposite of the vicious one that Proposition has created (and which was easy to predict before it was enacted).
If you want jobs and housing, tax land value.
Otherwise, keep California doing what it does now.
None of the billionaires here made that money from their salary. This will not touch them at all.
> If they do leave, I don't see that as a bad thing.
Chasing away jobs and the tax base will not end well. There is a decent chance SF enters a financial death spiral from its pension obligations. At the very least, massive cuts are in order. SF will not be transformed magically back to the year 2005, but it could very well wind up back in the 70s.
Although it doesn't mention capital gains, so if the CEO owns a significant part of their company already and doesn't have an additional vesting schedule, then they could make personal income from appreciation of the business that wouldn't be counted towards this bill.
Rent prices are the underlying problem pushing people out. Underlying _that_ problem is a lack of supply. SF zoned for and issued permits for a large number of offices, but not the corresponding residential structures to house those new workers. So they came here and were forced to compete with existing residents for a place to live.
The fix is to keep the economic prosperity and build more housing.
> Meanwhile socioeconomic disparity is an oozing sore in San Francisco
I'd argue that mixed income neighborhoods are the best kind. Many of the mechanisms for disadvantaging poor communities require geographic segregation. School quality, policing practices, etc
That makes sense to me. I don't keep up with exact SF policies but I'm guessing there are zoning and the NIMBY factor to deal with.
Underlying this problem is? Money, influence and power? I know a soon to be ex-POTUS that might be the perfect man for the job! He can come in and cut all deals needed. Then SF is saved and then he goes from city to city and country to country to redeem himself.
The Board of Supervisors are elected from districts instead of city wide. This means they're heavily influenced by neighborhood associations with a vested interest in maintaining the status quo. Throw in the normal, human fear of change and... the result isn't pretty.
And underlying that problem is Prop 13 - the insane multi billion dollar tax break that Californians bestowed on all land speculators. Until it's gone nothing will change.
Until the landowners start to feel some downside from the housing disaster don't expect anything to change.
This is the case for the tech industry, not categorically. Important distinction there.
I am all for building more and more dense housing. I'm not sure how to accomplish it. The way I see it, SF either becomes more dense, or it becomes even more of "a toy city for rich people" & loses all hope of economic diversity.
I grew up in Michigan. I am well aware of how cities can fall into decline. My wife on the other hand grew up in Minnesota. So in my mind, I often compare Detroit with Minneapolis. I think the problem with Detroit is that, it never diversified. It was all auto industry. Minneapolis's economy has several pillars: finance, insurance, healthcare, industry. You can ask yourself whether or not SF is either Detroit or Minneapolis in this example. I tend to think of SF as the New York of the West coast. It has very unique geographical advantages. It will have ups and downs, but will continue to be reborn.
Quite the problem ... the kind of problem that multitudes of cities and regions in the world are desperately trying to recreate.
>This has changed the nature of San Francisco in a way that many dislike, including me.
This is where progressives don't live up to their name. The nature of cities is constant change. Meanwhile the activists are desperately trying to keep change to a minimum so that the character of neighborhoods never changes. It's an interesting dichotomy.
>because rents have gone up so much, and also it's just not as fun, it's crowded and stressed.
Rents will drop if you increase density ... but that would mean building higher density housing and thereby accepting that the character of cities and neighborhoods change.
>I am aware that I am a part of the problem: my wife and I are white, yuppie, dink tech workers. :)
The fact that you're white and a tech worker isn't the problem. It's that you had the opportunity to move to San Fransciso for work due to the tech boom, and now you're trying to pull the ladder up so others cannot do the same.
I keep hearing proponents of strict exclusionary zoning laws arguing that they don't like the risk of having the value of their investment decrease because of this. SF will be a great example of how change happens weather you like it or not and allowing dense housing is what makes the change good or bad. You either sacrifice some of the view or sacrifice not having homeless camps.
San Francisco gets several millions of dollars to spend from which they spend a measly amount on the homeless(and that’s over 350 million/annum)..where is the rest? Even the money spent on homeless solutions is mostly going to contracted non profits(look at their board..probably has ex-city employees as board members) or more public sector employees.
With 350 million, I would have created a new sustainable village to house 1000 people with jobs inside. Instead, SF still huffs and puffs and spends tax dollars on piffle and squat.
You think housing is somehow immune to supply and demand? If that's the case, you can't claim rents are rising due to increase demand from young professionals. Which then raises the question: "What does affect rental prices?"
This is quite the ad hominem. I may have missed it, but I'm not sure where OP said anything about density or housing. Is there something wrong with not wanting the city that you love to be invaded by the human version of a swarm of locusts?
He is, by his own admission, one of those locusts.
Most residential units are not used or traded as a speculative asset.
[..] The majority of the residential housing developments in Singapore are publicly governed and developed, and home to approximately 78.7% of the resident population.[..]
I always tell people that, "it is a nice problem to have." Totally agree with you.
But it is still a problem nonetheless. It's fair enough to raise taxes to try to solve some of the problems which hugely successful businesses have created by displacing people.
Building more housing: YES, more dense housing: YES, programs for homeless people: YES -- on the back of such success, we should have all the money we need to maintain San Francisco.
YES my presence is symptomatic of the problem but, being self-aware, I try to address that by genuinely loving San Francisco, paying more taxes myself when I am asked to do so, participating in local art and culture, and not treating it like a transient place but rather my home and a treasure.
Regarding your statement that I'm trying to block others' advancement: proposition L is about taxing companies whose CEOs make 100-600x more than the median at their company. I am not hurting other regular folks by supporting this, furthermore I'm not even hurting the CEOs (they make 100x more than normal folks). If you benefit from society to the point where you're the leader of such a company, for goodness sake, give a little back gracefully, that's progressive taxation and it has been one of the foundations of our society since 1862.
SF is a liberal, expensive place, because supporting such population density and giving everyone a high quality of life is hard and requires work and money. If we categorically define all taxation as bad, we lose all basis for collective action. America is getting lost in the labyrinth of its own arguments.
100%. I think we agree on more that we disagree about, but we happen to be talking about Prop L.
The question on L is what's any of this have to do with the amount of money made by a CEO's employees? Should a CEO of a small number of highly paid employees be taxed less than the CEO of a large number of blue collar employees? That doesn't make any sense.
People talk about the ratio of employee to CEO pay because it's a quantifiable indicator of underlying causes. Trying to change the indicator directly misses the point. Why is the city so unaffordable to the working class? That's not being solved by this.
The spoils from this boom primarily benefited companies and people based in and around the Bay Area. People there didn't realize that the rest of the country (and much of the developed world) were still struggling and haven't fully recovered from the 2008-10 recession. The increased prosperity and resulting tax base growth papered over the fundamental mismanagement and poor governance in that area. Some of the highest incomes and highest taxes in the country and yet some of the most dilapidated infrastructure, highest poverty rates and poorest quality of life in the country. "European taxes and third world quality of life" is how I describe the area to people.
Yet, people moved here for the jobs and then new jobs followed the people.
14 years (i.e. half a generation) since then and at the beginning of what is another major recession and economic reset, it's perhaps difficult for most people to imaging that the appeal of the area has diminished and that things aren't magically going back to 2019. People have moved out, companies are hiring elsewhere, the tax base is down >50% and budgets are deep in the red. The local governments can try and raise taxes to squeeze a few million more here and there, but fundamentally, they will have to cut waste and cut spending in the next few years to survive.
I'm not saying SF is going to become the next Detroit, but I remember NYC in the 70s or Seattle post-Boeing (also, early 70s) as an example of what happens to cities when a major industry leaves town. It's a death spiral of lower tax collection -> poorer services -> more people leaving.
This applies to sooooo many cities. I think money beyond the level required to provide basic services just gets wasted and the citizens see nearly nothing from it. It's so common it seems like some fundamental law of the universe.
San Francisco's huge, number one problem has been and still is that it makes building new housing illegal: https://techcrunch.com/2014/04/14/sf-housing/.
Increase supply and prices will eventually fall. This is not a complicated problem and the relationship between supply, demand, and price has been known since the time of Adam Smith. https://news.ycombinator.com/item?id=16704501
Twitter's highest paid executive looks like they make something in the $7M range (Dorsey's total comp is approximately zero for several years, as he is counting entirely on capital returns on his investment, not compensation from the firm); I'm doubting that their median SF pay is below ~$70K.
Tech needs to expand to other parts of the country. If SF wants high taxes, so be it, let all participate in the competition of where to be located.
I've worked for a lot of (admittedly, tech startup) companies, and none of them have.
For that matter, companies I've worked for who needed telephone-answerers or other low-compensation service workers have already spun that off into separate companies, for a similar reason - google '401K highly compensated employee' to see why.
First they came for the janitors, but I did not speak up, for I was not a janitor...
Companies don't pay you more money because they CEO looks at his salary and goes "yeah I think I have enough".
Sometimes outsourcing lets "them" focus on efficiency and getting the details right and so you are better off. Sometimes out sourcing cuts quality to get better costs.
There are many accountants, it is relatively standard across industries, and so you can outsource it all easily - but most big companies have it in house anyway. (though they will hire out some of the grunt work) This is one area where messing up will kill your company so you better keep a close eye on it. (An accountant can easily steel enough money that you can't maintain cash flow - you might get the accountant in prison but your great company is bankrupt anyway). This is but one example of many cases where out sourcing is bad.
On the other side power utilities outsource most tree trimming around power lines. The companies that do this work give the utility a great deal because the contract that keeps their crews busy 3/4ths of the year which is important because most of this type of work is right after a storm and employees are easier to keep when they aren't laid off 3/4ths of the year waiting on the next job.
When an out sourcing is borderline not worth it because of risks above it, it may become worth it after this change.
There won't be a Bay Area exodus anytime soon but you bet a startup is going to move out of SF when it starts to get big. The additional taxes will only hurt the companies that have a firm root here and will discourage future companies from forming in SF.
Sf wants everything to remain exactly the same in a world that's changing faster than ever. It's time to encourage new residential units, properly tax land/property, and start actually proactively fixing its problematic neighborhoods.
It is standard practice in the Bay Area to use staffing agencies for everything but executives and core talent with all signs pointing to the practice becoming even more common well before this.
You can rent a robotic fry cook for 1'500$ a month from Miso Robotics [0]. I know somewhere someone is looking at a commercial-grade surface cleaner and trash-picking robot.
[0] https://www.theverge.com/2020/10/6/21503892/miso-robotics-fl...
You want to incentivize future growth too, and you want to make sure that 20 years down the line, you have the new FAANGs of the world giving you millions in tax dollars, because history has shown that the largest of companies can eventually die out, and tech is full of graveyards.
What this does is, it collects money from today's FAANGs while disincentivizing future startups from starting here.
This is akin to the boiling frog fable (yes I know it's fake but the point of the fable stands), except the city is the one putting itself in the cauldron and raising the temperature by chipping away bit by bit the things that make the bay area a good place to live and invest in.
It doesn't have to be food trucks exactly, that's just an industry that people like in a business that's relatively simple and imo has low systemic risk.
How do you prevent over-crowding of a location, and flow-on effect of crowds from said truck?
How do you make sure the waste products are sanely disposed?
And a million other concerns from third parties unrelated to the business, but is affected by its existence?
Those that don't will expect a steep discount.
Meanwhile those people who take the risk and it doesn't work out will still have bills and rent to pay.
I'm definitely open to discussions about how to help people incapable of raising a couple hundred bucks and lacking the skills to cook a hot dog. I'm not claiming to attempt to solve every problem.
The talented workforce is there because of the companies. Why would someone deliberately choose to live in San Fran when given the choice of many cleaner, nicer cities with a lower cost of living?
I guess if you really like fog and hills
The Silicon Valley wasn't nominated as the tech hub overnight, it became one through an organic process thanks to a mix of good weather, access to capital, a pool of talented employees etc.
Don't take any of that for granted (well except the weather I guess, but with Global Warming and earthquakes who knows).
"Lead executor"
"Company Chief"
"Dear Leader"
"Head Director"
"Paramount Leader"
"Viceroy"
"Corporate Emperor"
Emperor for Life
Grand PoohBah
Prediction: Many lower-paid staff will be outsourced (Think Apple and Foxconn; Think big companies and their outsourced cleaning company).
Currently, typically things like cleaning staff, internal mail, dining get outsourced. Expect customer support to also start getting outsourced. The unfortunate thing is that now there would be a middle-person also collecting a spread from the company/worker (but to the company, the spread will be lower than the tax.)
How many startups are there where the executives make 100x to 200x the median employee pay? That only happens via stock-based compensation at public companies. If that's the case, they're not a startup.
But to build empire you have to be in denial of that fact.
Does it? Startups probably start out with a fairly small Executive Pay Ratio because they start out without a lot of low-paid grunts, and its already not common for them to open satellite facilities or move HQs for grunt work when they scale out to more jobs where they aren't trying to attract locally-concentrated elite talent. Because its triggered on the ratio between the highest paid managerial employee anywere in the firm and the median pay of employees in the City, it really just adds further incentives to do low-level gruntwork outside of the city, but doesn't seem otherwise to really change the structural incentives much for startups.
OTOH, it does make it more expensive for any widespread organization whose headquarters and elite labor are elsewhere to operate a facility with mostly low-level labor in the City; a tech startup headquartered in the City might never be hit by it even as they scaled up if they are focussed on automation, as they might never have a low-paid workforce. OTOH, retail, etc., outlets, hotels, etc., of firms with highly-paid executives with their main executive and high-paid labor force outside of the city would be hit hard (as far as compared to other firms, I don't think the tax rate is ever high enough to really be "hit hard") by it on their operations in the City.
But I don't think it will disincentive new companies starting out. They have a hundred other concerns more important than how the CEO will be taxed if they one day become huge and the CEO has extremely high compensation. It won't even factor into the decision of where to locate the company. Also, you should notice most highly compensated CEOs are not founders. Founders don't need to compensate themselves that heavily because they own a large chunk of the equity. Simple capital gains or dividends are the favourite forms of compensation for founders.
Since founders, by definition, are the ones deciding where to found the company, they won't care at all about this law.
On the other hand, the law does cover gross receipts, so the act of “paying” the CEO in stocks is subject to taxation at the point in time the CEO receives it as part of their income.
That is technically true, but this is where it gets tricky.
If you joined a public company (this will work with private too, if you weren't the founder, but let's not thing about it for the sake of simplicity for now) as the CEO, this will work out perfectly just like you described. You got all those shares at joining, you pay tax on their value at the time. As you get more shares, you get taxed on their value as soon as you receive them. If you decide to sell those shares, you don't get taxed on the initial value of them (since you already got taxed on it when you received the shares), only on the profits you made at the moment of sale (or you get your taxable income reduced due to losses, in case the share price went down between the moment you received the shares and the moment you sold them). So far so good.
If you started your own company, you initially hold the shares that are worth nothing, so you aren't really taxed on them. If you don't continue receiving new shares, but instead just hold onto the initial ones, you only get taxed on them when you sell them (since when you "received" them originally, they were worth nothing). Does Zucc receive more shares over time? I don't think so, he is just holding onto his original shares (while, no doubt, selling some and getting taxed on them), so this law will not affect him one bit unless he receives more shares.
Not trying to discredit your theory, your overall point is correct, I just wanted to add more nuance.
P.S. I am not an expert on this by any means, so if someone can correct me (especially on the "starting your own company" scenario), please do so. I find this a fascinating topic, and I try to answer as accurately as I can. But since I didn't experience that scenario myself, I can definitely be wrong or missing some details.
The new law includes equity comp in the calculation. Not sure how or if they'll amortize founder equity over many years, though; they may just consider the value in the year it's granted or the year it vests.
Years ago, Denver placed a tax on companies that create software. By "magic", companies decided to found outside the county lines including Boulder. Boulder has an active software scene. Denver is getting there, but still not the advanced companies Boulder has. I believe Denver recalled the tax, but unsure.
I would say that SF doesn’t want to incentivize future growth. That’s the source of the inequality, right?
> people who "barely pay any tax at all" are worth helping
Millionaire property owners are barely paying any taxes. Disneyland and every other large commercial building is barely paying any taxes. Why are they worth helping?
Similarly, while I do think everyone is worth helping, I'm not yet seeing how this helps millionaires and large landlords.
A transfer tax says, "oh, the owner change - here's the same tax for a money losing project as an extremely profitable one". It's just disincentivizing change.
This tax is even being talked about because things like CA Prop 15 being voted down leave schools/cities underfunded by giving long time land owners a massive tax break.
We need to make the system more fair not just tax everything that moves.
I suspect that this would collect a lot more money from today's Hiltons and Marriots than FAANGs; its not like FAANGs employ a lot of people at bottom-of-the-barrel wages in SF.
I think that if companies do suck it up and pay, it will be declared an effective law and then...the there will be proposals to expand it. It might dip down to also include SVPs, then VPs, and so on
I think it’s gonna disincentivize FAANGs from making future investments in the city. This is BAAAAD timing for a tax hike like this, coming off tech companies doing a seven month experiment in whole-company WFH, and finding out it’s working pretty well.
We shall see though, and hopefully sooner rather than later.
So you're saying entrepreneurs wouldn't start companies in SF because some day their companies will pay 0.1% tax if they make 100x the average employee?
That's all it takes for founders to get discouraged? Well then maybe they should not start up in the first place.
Come on... There's a million reasons why new startups shouldn't start here, the salary of a CEO is not one of them.
As I say I'm asking from ignorance. I also realise I'm likely to get somewhat biased answers to that view point on HN.
1) Companies may now have a direct incentive to have their lowest income earners be outsourced/contracted out to boost the median pay amount.
2) It was smart of them to include compensation such as stock options. However if a city starts to expect this income, it will all go away in recessions when CEO's stock options are not valuable. ie more money to the city in boom periods and not much in bust cycles.
Well-intended ideas, not fully thought out, leading to unintended consequences... nothing really new for SF.
San Francisco is overheated and a majority of residents would expect to benefit from CEOs or tech companies reducing their pressure on housing and services.
It has been 5 years since France tried and failed to put 75% taxes on the "super rich" and they ended up with less tax revenue than previous years. Those who don't learn History are bound to repeat it...
> The tax will levy an extra 0.1% to 0.6% on gross receipts made in San Francisco for companies whose highest paid executive makes 100 times or more its median worker’s salary. The amount levied will increase in 0.1% brackets proportionally to the pay ratio. A company whose highest paid employee earns 200 times more than its median San Francisco worker will get a extra 0.2% charge on its gross receipts. For companies whose CEO makes 300 more, the charge jumps to 0.3% and son on. The tax caps at 0.6%, and only companies with gross receipts over $1.17 million will be targeted.
So, for now, it's probably a non-issue... and they have time to adjust.
https://www.law.cornell.edu/cfr/text/26/1.414(c)-4
https://healthcareexchange.com/article/common-ownership-what...
Doesn't help at all to move high-paying managers out of SF the way this is structured.
Moving low-payed workers out of SF while keeping high-paid workers in SF, OTOH.
The median was presumably chosen because it's relatively harder to shift in this way. Although this depends on the exact pay distribution of your company, you'd expect getting rid of people from the bottom to change the median person but not typically change the median value.
(This is also a mature enough problem that I'd expect other provision in the law to prevent this - are we sure it doesn't include outsourced workforce pay?)
1 1 1 2 2 2 2 3 6 60
median moves: 2 to 2 (+0%)
mean moves: 8 to 11 (+72%)
(You can make your own example.)
Usually, you expect the median to be pretty stable when you remove (or add) outliers. That's often the reason it's used in formal statistics.
e.g. let's say my employees' wages are:
[1, 1, 1, 1, 1, 10, 10, 10, 10]
Now let's say I could replace each employee with a contractor by paying 0.5 more than the salary of an FTE.
In the above example, let's say I want to raise the median salary of my employees to 10. I could do that by either:
* Paying one of my employees 9 more (boosting them from 1 to 10), at a total cost of 9
* Replacing all my 1-salaried workers with 1.5-salaried contractors, at a total cost of 2.5 (five workers, each getting a 0.5 bump)
It's clear that I'd never want to do this if contract workers and full-time workers were just as favorable for me (since I'd be paying more to get the same work done). If all of a sudden the company were incentivized to raise their median employee's salary, though, all sorts of non-common-sense solutions can come out of the woodwork, and replacing FTEs with contractors (even at a cost) could be the incentivized solution.
True, but most likely in a way that also reduced the cost in other cities and counties, because the high cost of SF has pushed people out to lower cost areas in the outskirts. If SF wasn't so expensive, more people from the surrounding area would live there, having the desire if price wasn't the issue, therefore reducing demand and thus costs for the outer areas.
For example, SF MTA is part of the SF budget, but LA MTA is a county agency, and isn't part of the LA city budget.
edit: NYC's MTA is funded separately, including huge state contributions, so this is a terrible comparison. Let this comment be a reminder of the difficulty in comparing municipal budgets.
Their per capita budget is half of SF's.
Even if the money was burned that would be okay.
> The tax will levy an extra 0.1% to 0.6% on gross receipts made in San Francisco for companies whose highest paid executive makes 100 times or more its median worker’s salary. The amount levied will increase in 0.1% brackets proportionally to the pay ratio. A company whose highest paid employee earns 200 times more than its median San Francisco worker will get a extra 0.2% charge on its gross receipts. For companies whose CEO makes 300 more, the charge jumps to 0.3% and son on. The tax caps at 0.6%, and only companies with gross receipts over $1.17 million will be targeted.
> Under the measure, gross receipts and CEO compensation will include money made from stock options, bonuses, tax refunds, and property, a caveat seen by many as a way to target the tech sector where CEOs are often compensated in non-salaried bonuses. Tech is expected to account for 17% of the tax revenues, according to an estimate by the city’s chief economist, while retail and financial firms are expected to account for 23% of the revenues each.
> The CEO tax is expected to generate between $60 million to $140 million per year.
Doesn't seem that big in comparison to what SF annual budget is.
From (because the article doesn't give exact figures on transfer taxes): https://sfcontroller.org/sites/default/files/Documents/Econo... ?
> Proposed legislation would raise the Transfer Tax rate on properties in the city that sell for more than $10 million. For properties selling for between $10 million and $25 million, the rate would rise from 2.75% to 5.5%. For properties selling for over $25 million, the rate would rise from 3% to 6%.
There are no singled-out pockets that you can tap into and make up SF annual budget. It's all about cumulating a lot fo long-tail small pockets + 1-2 large pockets.
The pandemic has thrown things in a wrench, but prior to the pandemic, San Francisco businesses were constrained only by commercial real estate. There was literally no space left to put any new businesses.
We've been collecting Prop C revenues since March 2019, and they are exactly as forecast.
Correct. SF and its politics cannot be saved, just let them slowly eat themselves.
Keep in mind they also have to calculate this for certain employees.
I am curious how you would determine what the fair value of a stock option is when it is granted. Assume the option's strike price is for the current stock price. Theoretically, that stock option has a current value of "0" (assuming that it is non-transferrable so we don't have to worry about market price)
That stock option is expected to increase in value if the stock price increases (which then aligns the CEO's salary with shareholder value). So in five years, those stock options might be worth millions of dollars. But would you then say the CEO got paid millions of dollars five years ago? But the stock options when they were granted were 0 - they increased in value when they were the property of the CEO. If the CEO bought artwork 5 years ago and the value increased 10x in 5 years, would you also add that to his taxable income?
I am sure there are ways to value these options. But I can't find the details in this bill. Do you know how it might work?
0: https://sfelections.sfgov.org/sites/default/files/Documents/...
So basically this is targeting companies whose CEOs make over $50M a year, which is basically Twitter, Pinterest, Google, Facebook, Uber and a few others that actually have an office in San Francisco.
And I'm sure Google and Facebook et. al will fight them over how much money they "make" in San Francisco.
San Jose is an alternative for the CEO/Headquarters. There could be a minor office in the city where tech workers prefer to live, or they could commute down instead of up. Imo, SF City is overplaying their hand here and might be in a bit of a shock for the reality of how business works. The last bubble and good times might have distorted their understanding.
Also the law says all compensation, including stocks and bonuses. So Zuck would definitely qualify.
The medium size businesses that only operate in SF will be screwed the worst.
Very interesting, but, does that mean that execs who don't personally work in SF are subject to the tax? Ie, will Citibank's Michael Corbat, working out of Citigroup's New York offices, need to pay the tax because Citibank has bank branches in SF?
I'm really not sure how they plan to enforce this at all.
San Jose is already 25% bigger than SF. It's the third largest city in California after Los Angeles and San Diego.
Source: https://calmatters.org/california-divide/2020/11/san-francis...
But he wasn't the highest paid exec. Sheryl Sandberg was, at $30M. Probably still not high enough to trigger the tax.
> By the time of Plato’s death (347 B.C.) his hostile analysis of Athenian democracy was approaching apparent confirmation by history. Athens recovered wealth, but this was now commercial rather than landed wealth; industrialists, merchants, and bankers were at the top of the reshuffled heap. The change produced a feverish struggle for money, a pleonexia, as the Greeks called it—an appetite for more and more.
> The nouveaux riches (neoplutoi) built gaudy mansions, bedecked their women with costly robes and jewelry, spoiled them with dozens of servants, rivaled one another in the feasts with which they regaled their guests. The gap between the rich and the poor widened; Athens was divided, as Plato put it, into “two cities:… one the city of the poor, the other of the rich, the one at war with the other. The poor schemed to despoil the rich by legislation, taxation, and revolution; the rich organized themselves for protection against the poor. The members of some oligarchic organizations, says Aristotle, took a solemn oath: “I will be an adversary of the people” (i.e., the commonalty), “and in the Council I will do it all the evil that I can."
> "The rich have become so unsocial,” wrote Isocrates about 366 B.C., “that those who own property had rather throw their possessions into the sea than lend aid to the needy, while those who are in poorer circumstances would less gladly find a treasure than seize the possessions of the rich.”
> The poorer citizens captured control of the Assembly, and began to vote the money of the rich into the coffers of the state, for redistribution among the people through governmental enterprises and subsidies. The politicians strained their ingenuity to discover new sources of public revenue. In some cities the decentralizing of wealth was more direct: the debtors in Mytilene massacred their creditors en masse; the democrats of Argos fell upon the rich, killed hundreds of them, and confiscated their property. The moneyed families of otherwise hostile Greek states leagued themselves secretly for mutual aid against popular revolts.
[1] Will Durant. “The Lessons of History.” p. 58-60
> The middle classes, as well as the rich, began to distrust democracy as empowered envy, and the poor distrusted it as a sham equality of votes nullified by a gaping inequality of wealth. The rising bitterness of the class war left Greece internally as well as internationally divided when Philip of Macedon pounced down upon it in 338 B.C., and many rich Greeks welcomed his coming as preferable to revolution. Athenian democracy disappeared under Macedonian dictatorship.
TLDR on this whole thing: this never ends well for the poor.
I'm not necessarily siding with the nobility here. Simply pointing out that when our aristocratic sources write about the terrible upheaval that occurred when people outside the nobility acquired great wealth, we should be pretty skeptical.
In my opinion, the state legislature should amend RTC 17041.5 to allow local income taxes, but only on rent, imputed rent, and capital gains within the city. Rents are the thing that local governments can tax without distorting the market.
As for this performative CEO tax, I think that the only positive effect that it will have, if any, would be to raise awareness of an issue whose solution has to come at the national and state level.
I left California many years ago. Every single part of my life is much better. Fiscally , romantically, mentally. SF over values how essential location is. With Covid it's clear remote work is the future, base the company out of Delaware and go full remote
To another country. The world is a big place, there are also a number of tax havens that are relics of the British Empire, there will be other countries which will quite happily have large tech business move there.
None of these measures have the intended consequence (usually the opposite happens). All it ever does it make it look like the politicians are doing something.
In any event I am not saying companies will move there necessarily (it was just an example I took off the top of my head) but they will move parts of the business around to be tax efficient. I do it with my own tiny business to be tax efficient.
As I said the world is a big place and companies will just move somewhere else if they deem it to be worth the move.
The other issue is how much complying with this regulation is going to cost. California is already very very anti business after all
Well, leave the City and County of San Francisco, maybe. But it wasn't that long ago that SF proper wasn't even considered part of Silicon Valley and the associated tech hub, anyway, though it was close enough that a lot of the conferences, etc., were there. And most of the big SV firms still aren't actually in SF.
Um, yes? "Critics call John Travolta 'blatantly an actor, playing parts in movies.'"
1. you agree with the principle of addressing wealth polarisation, but don't agree with tax as the mechanism? (in general or the proposed model specifically)
2. you don't agree that increasing wealth polarisation needs to be stopped/reversed?
3. something else?
Thanks.
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Edit: fixed the numbering, forgot I wasn't writing markdown!
To be frank, as a supporter of capitalism - I generally support the notion of high taxes in europe because the populations who pay these taxes clearly see HUGE societal benefits as a result of half their income evaporating. There also seems to be more respect of the people's money from these gov'ts regarding how they spend taxpayer money is spent and with a clear aim to help the people NOT partisan goals, wars etc. I may be incorrect here (open to correction) but it seems like US politicians (federally at least) seem entitled to taxpayer dollars. Most forget that until WW2 the idea of federal witholding simply wasn't a thing and many middle class families were flushed with savings.
Unfortunately, both sides are at fault in the US. The only way this is going to change for the better is to cease the cycle of one political party only pandering to it's base instead of motivated and able americans.
sooo ranked choice voting? :D
15% of the budget goes to the military. That makes the U.S. the largest military spender in the world.
15% of the budget may seem expensive, but it's not fair to compare it to Western Europe. NATO is a big reason why western europe does not need to spend more on their own defense.
I believe that's a good thing - it's in the United States' best interest to avoid rearmament in Europe, and Europe has never been at (relative) peace for so long as it has been since the emergence of the post-WWII consensus -- but they do in fact have more money for more non-defense discretionary spending than we do as a result. The Euro area spends 1.4% of GDP on military spending while being protected by an umbrella of security provided by the U.S., which spends 3.7% of GDP on the military.
Again, I think this is good for the U.S., we benefit from the liberal world order that we enforce, but I think it has to be taken into context when the EU is described as a great example of how to spend tax money on wise social programs.
I take a bigger issue with programs like student loan debt forgiveness which would be a slap in the face to poor people like myself who worked their way through college in order to no longer be burdened by loans. Not to mention the fact that without a refresh of regulation on universities (specifically graduate degrees) loan forgiveness would just further embolden universities to increase tuition.
The issue with taxes in this country is that the budget is expected to always be met WITH excess. That's the disgusting part, the assumption that "well we can go over and shell out benefits to our beneficiaries (people who voted for us) and the american tax payer will foot the bill" is atrocious.
Both parties are guilty of this, however I also find it ironic that Americans (specifically privileged americans) seem to think that "taxing the rich" is a solution, when a) rich people already pay an overwhelming majority of taxes, b) the rich will always find ways to out-smart the government and avoid taxes they deem as unfit and c) even if you taxed earners above $400k 95% of their income it would only amount to maybe a trillion dollars - so not even close to bringing the national deficit down.
This is like saying that a cheap cure for cancer would be a slap in the face to people who drained their life savings battling cancer, and to the families of those who lost.
The problem comes with policies of the form "We're going to tax [some wealthy group] and redistribute the money to [some other group]". There's a few sets of issues:
1. The money never gets to the downstream group. It gets eaten up by fees and processing, etc. Great for the middleman but not anyone else. If it does get to the downstream group, the total amount is gravely reduced.
2. You have to make a very strong case for taxing [some wealthy group]. Simply having wealth doesn't seem a good basis for taxation - "You're successful so we're going to charge you more taxes, maybe next time you won't be so successful" Obviously there are other arguments that can be made - the wealthy stole their money, or gained it illictly, etc - but those arguments tend to be individual cases and don't allow acting against an entire class of people unless you go into weird theoretical territory.
3. Solving "wealth disparity" isn't a meaningful goal. A thousand homeless folks all in the same campground have no wealth disparity - that doesn't mean you've improved their life. Simply funneling money doesn't solve problems, and making the end goal to shift around bits of paper is mistaking a process for a goal. If your goal is "We should provide a base level of healthcare to those who can't afford it" and can name an actual price for that, then that's a meaningful goal and you can tax appropriately if voters approve it.
1.) wealth/income inequality is inherently wrong, so redistribution is automatically good. private property is theft!
2.) whatever people get paid is theirs, fair and square. therefore redistribution is automatically bad. taxation is theft!
3.) some people are genuinely much more productive than others, and their pay may reflect that. at the same time, people can acquire more than their "fair share" by exploiting vulnerabilities in the system.
from the perspective of 3.), redistribution via tax looks like a dirty hack to mitigate the consequences of a deeper problem. it makes things a little better in the short term, but it doesn't address the root question: why are some people able to capture outsized compensation for their work? but hey, sometimes you have an urgent issue and the quick fix is all you have time to implement.
Scenarios 1 and 2 don't exist in the real world. They are just theoretical models.
Every law is a "dirty" hack, because the deeper problem is the nature of humans - which is to hoard privilege, wealth, power, and security - and the way that influences their societies.
Almost every non natural constraint civilization has imposed on humans has been to either support one group's hold on power and security (i.e primogeniture in feudal societies, taxes imposed on non-believers in the state religion) or the opposite: to redistribute power and security across the broader population (Magna Carta, The New Deal, Social Security / Medicare in the US).
There is a version of this that doesn't care about "right and wrong": Wealth inequality may happen for good and natural reasons, but too large quantities lead to a worse society for wveyone, and so redistribution is one way to reduce it.
Islam requires a form of "charity tax" called Zakat. Its proceedings goes to the poor and needy, among others (e.g. freeing slaves, wayfarers, etc.). The percentage is different based on the commodity (e.g. livestock is taxed differently from cash), but the percentage is fixed (only 2.5% in the case of cash money annually).
However, and extremely importantly, it also prohibits exploitative and parasitic practices that cause very unfair advantages to some at the expense of others. Obvious things like lying and cheating (e.g. false advertising), but also very important issues of lending money with interest, selling what you don't own, selling debt for debt, etc. Most of which you'll find on Wall St. as normal behavior. Everything inside these boundaries is up for grabs. Remove these horrible practices, and things will get better almost by definition without having to start taxing people even more.
My personal theory of "inequality" is that it isn't necessarily a bad thing. A distribution of income levels will always have a long right tail as you cannot make negative income but there is no theoretical limit to the maximum income. If all wages grow by the same relative amount, you would see increased inequality.
I think it is a problem if wages aren't growing for all portions of the distribution, but that is precisely because of the lack of growth for some and not because of the existence of growth for others. So, yes, I do think that growing income inequality may be a societal issue, but only if it is an effect of wage stagnation for middle and lower classes (which it is).
I do not believe that the rich getting richer is the cause of the stagnation, though. If anything, automation and globalization have been the main reasons for stagnation among middle and lower income levels. Automation and globalization may also be the cause of the continued growth in the very high wages. Even if they share the same underlying cause, one didn't cause the other.
I understand, but don't agree with, the argument that increased inequality causes social problems on its own. According to this theory, as I understand it, you can't have the differences among people be too great because it will cause too much power imbalance and resentment and eventually the masses will rise up and destroy the system from within. I don't agree, I think social problems come from the difference in reality compared to expectations of how one thought their future would go -- in other words, it is much worse for someone to see low wage growth in a stagnant economy where their standard of living is declining relative to their parents than it is to see moderate wage growth in a growing economy but there are some other people getting super, super rich. I don't think one's life relative to rich people is that important compared to one's life relative to personal expectations.
So, in that sense, I don't agree with redistribution schemes that intend on fixing a symptom of a problem (that rich people exist) rather than fixing a cause (wages are stagnant).
If the idea isn't to just reduce the inequality, but rather to supplement lower incomes -- there is absolutely no version of "taxing the mega rich" that we could do which would raise enough money to redistribute to the rest of workers such that it compensates them for the lack of wage growth at the lower end. It can't be done, there's not enough money. Eventually you have to tax the (productive) middle class.
From that perspective, I prefer policies that focus on wage growth for the lower and middle classes, even if that's a harder problem to solve.
Who disproportionately benefitted financially from automation and globalization?
> From that perspective, I prefer policies that focus on wage growth for the lower and middle classes, even if that's a harder problem to solve.
You need to do both. No one was talking about this 20 years ago because most people were participating in the "good economy", even if some benefitted far more than others. Now people are being told the economy is good (by both major polities), but it doesn't match reality, which you noted is a major cause of angst.
Additionally, if your goal is to create more jobs and wage growth for low and middle income people, the best way to do that is to reduce economic concentration and create more opportunity for competition and small business. It will be less cost efficient, but the economy will be more resilient and the wealth would be more broadly distributed, even though some people could still achieve obscene wealth.
> I find it interesting that you frame income inequality as "wealth polarisation." Are you implying a bimodal distribution of some sort?
I wasn't intending to equate distribution and polarisation. By the latter, I meant the steady shift of wealth to a smaller population who have become progressively wealthier. While, at the other end, the majority have beome comparatively less wealthy compared to equivalent social cohorts over time.
Perhaps more succinctly, it's the _change_ in distribution, not the _presence_ of a distribution.
I'm no economist and I know there are a variety of opinions on distribution, but I understand there's reasonable agreement that globalisation has increased polarisation [0].
You shouldn't think of the destruction of the system from within as the problem. Some might fear that, but afterall, its unlikely that the people without power would beat those that have it.
The problem is the power zero sum game in itself. Wealth and power are both ways to gather even more wealth and power. In a simple society without a government you could simply use the power to buy weapons and soldiers to coerce the wealth of others. In our society you can use power to shape the rules more favorably for your own group.
As the wealth ratio of one group converges to 100%, the other groups have gradually less influence, unless allowed by those in power because of ideology or their good hearts.
Either you see this as fine and natural, or your ideology prefers everyone to have some amount of freedom over their own lives.
In the later case you may look at ways to reduce the wealth and power inequality, by weeding out rules particularly favorable to the powerful, or by trying to spread wealth more evenly.
If I buy a car for $10,000, then I now have a car worth $10,000, and the seller has $10,000. Wealth was not redistributed, we’re both where we started.
> Under a newly approved law, any company whose top executive earns 100 times more than its average worker will pay an extra 0.1% surcharge on its annual business-tax payment. If a CEO makes 200 times more than the average employee, the surcharge increases to 0.2%, and so on per multiple of 100.
What do they mean by "earns," are bonuses included? Nonmonetary compensation like having your car or mortgage paid for directly? Increase in stock value that's part of your comp package?
I'm sure folks will try to game this to get around it, I'm just curious how.
Also it sounds like this is a surcharge on taxes paid, not actually a new tax on revenue. So if you pay $1 million to the city of San Francisco in taxes, and your CEO earns exactly 100x more than the average worker, you now have to pay... $1,001,000?
Lay off everyone making less than 200x the top earner. Move to remote workers where possible, outside contractors where not.
Perhaps - but it will discourage new businesses from locating there, and new businesses are the future.
Pros: lots of funding, lots of experienced employees who have taken companies from seed to IPO, probably a higher chance than some other areas to go from well off to ridiculously rich
Cons: I get taxed more if I start making 200x what the average employee in my company makes.
Can you see how no one would care unless they're 100% sure they're gonna be making 200x what their average employee makes regardless of where they put their business?
The real estate transfer tax sounds rather misguided as well. I expect it to distort the already unhealthy real estate market in harmful ways.
I'd rather go for higher ground value taxes with reductions for high density occupancy or people who live in that building themselves.
Outsource the lowest paid workers to a subcontractor to raise your average employee wage. I’m not sure that has a desirable effect, but it seems this law certainly financially encourages that.
Bechtel, McKesson, Petrovich, Jamba Juice, Core-Mark, Houzz, Lyft, Xero, Pandora, Robin Hood, and hundreds others have moved their HQ to somewhere other than California.
You can pay lower paid workers a higher effective wage in pretty much anywhere but California.
So, then the sub contractor pays the taxes and invoice you with mark-up?
Because those companies have ceos too?
I think this is rather fascinating. Assume a de-facto minimum wage of 10 dollars an hour, 2000 hours/year for 20k/year lower bound. 200 times that is 4M usd/year in compensation for a single individual. Does seem wierd to see such a big difference in campensation. If nothing else, seems to illustrate a broken labour market with horribly skewed bargaining power.
But if the tax does become a problem, split into OfficeServicesA and OfficeServicesB corps and let your clients pick which one they'd like to hire. Or have your spouse or family member do some of the administrative work (for business continuity reasons) and split the comp.
What counts as "made in San Francisco"? It doesn't seem like that definition would apply to online revenue for e.g. a SAAS company or social media site. It would still apply to some tech companies, those with a physical presence like Uber or AirBnb are more clear.
So is Salesforce in the clear for this tax, or perhaps they are only taxed on the revenue that comes from sales to other businesses who are themselves in SF? (And what if those businesses have multiple offices?). Seems quite complex and probably pretty easy to get out of with some accounting tricks. I guess this is a progressive SF law that really isn't targeting tech companies, for once?
On the other hand, it clearly will apply to every national chain retail store, restaurant, etc. And if so, all of their local mom-and-pop competitors will get a slight leg up from this in addition to raising the revenue from the tax. If I'm understanding this right I guess it might not be the worse idea.
2006-2011 was the housing crash and recovery; it doesn't seem like an outlier from the overall stock market. Before that, it collapsed from 2000 to 2003, then gained 5x over its previous highs from 2003-2006.
> “We need the wealth that has been generated in the city to be shared more broadly with workers and residents”
This person seems to assume the taxes will be shared with the workers and residents. Would they still support these taxes if that were not the case?
Others (in this discussion) seem to think the taxes will be thrown at things that don't benefit the city. Maybe so? Would they be more supportive if they knew it was for something they believed in?
Unfortunately, now we live in a world where we just talk about taxation for the sake of putting money into the pot and have no real idea or influence over how that pot of money is spent. A government that can move towards this Benjamin Franklin kind of simplicity of taxes would make its country such a better place.
Article I found about it: https://founders.archives.gov/documents/Franklin/01-07-02-01...
To fund currently unfunded pension liabilities? To hire more city employees at above-market rates? To build new parks and roads? To fund public transportation?
The money will be used for what it always is - some of it will be good and some of it won't be very good. Once it's in the pot, it gets stirred around and all sorts of people and projects get a full bowl. That's not what's interesting about this story - taxes get raised all the time by all sorts of authorities. What's interesting is that the tax is full of perverse incentives and may very well lead to lower, not higher tax receipts.
Why is this not interesting to you? Just because it's the status quo of how things are done doesn't make it less of an issue to me. Maybe if we knew what pot of taxes were used for what causes, we could reason about their worthiness better. Just raising taxes for the sake of raising taxes seems like a meaningless and potentially regressive goal otherwise.
> What's interesting is that the tax is full of perverse incentives and may very well lead to lower, not higher tax receipts.
These things can both be interesting.
For example, an exec's pay will be capped at 100x median worker salary, but just spread out across multiple years. As others have mentioned, temp agencies/contractors will also probably be utilized.
This means companies that have larger workforces - mostly determined by industry - are less likely to set up shop in San Francisco. Of those that do, they are strongly incentivized to use contractors instead of employees to ensure the salary gap is within reason.
In other words this just created an arbitrary set of incentives for companies to adjust their behavior, likely to the detriment of non-high income workers in the city.
I hate to say it, but when you do things like this to Big Business TM it DOES have trickle down effects that negatively affect small business owners and business services alike.
It doesn't seem like they're too worried about new businesses, they're just trying to hold the current ones hostage.
For a while, SF was a popular place to start a new company, but all established CA tech firms were down on the peninsula or in the south bay.
Some of those startups got big, and some of the big firms opened SF offices to compete for talent.
Now, it's hard to compete for talent in SF if you're starting out - you have to compete with the Ubers and Airbnb's as well as Google and FB.
Taxes like this will push more of "big tech" out of the city (eg Stripe moving to South San Francisco) and free up more breathing room for young startups.
I guess I take it as a given that this is better for SF, but others may disagree or need convincing.
What I would do instead is tax highly paid executives. This does not have the side-effect of making companies only use temp firms (as described above) if they need a barista or receptionist.
How do you define who is a highly paid executive?
Pissing off both of those industries doesn't seem like the smartest approach when they have 12 million sq. ft. of unused office space [0].
I think SF's pain is only beginning.
[0] - https://socketsite.com/archives/2020/10/nearly-12-million-sq...
It seems like a potentially bad mix where a lot of people live in SF just for the money, and as soon as a downturn hits amd the bad policies start to have consequences it will just hollow out. That may be happening now.
1) Companies may now have a direct incentive to have their lowest income earners be outsourced/contracted out to boost the median pay amount.
2) It was smart of them to include compensation such as stock options. However if a city starts to expect this income, it will all go away in recessions when CEO's stock options are not valuable. ie more money to the city in boom periods and not much in bust cycles.
Let's say I make $100 and the mean is $1. I'll pay 0.1% on tax payments.
also increasing the taxes by an additive 0.1 points (ie not multiplied by 1.001) disproportionately targets the lower gross receipts companies (such as restaurants, which would more than double their GR tax)
Still seems like bad policy
But other cities have lower land prices and cheaper housing. San Francisco has the highest land and rent prices of the entire country. The argument that "we need to lower the price of housing to address the homeless problem" sounds very appealing, until you consider: wait, why are they going there? The indications are that they're not from there.
Is the problem that they're coming from places that don't have social programs, and drug legalization, which SF kind of has? There are needle exchange programs and if you start to convulse in the street someone will run over right away and give you Narcan. There's free food. Showers and bathrooms are ... apparently a problem ... but it's warm out. It's not Chicago in winter.
So maybe it just make sense for homeless to hang out in Tenderloin. As in, if a magic wand made us homeless, we'd just logically go there because it'd be good and healthy for us to do that.
Going back to the article. Someone mentioned the Laffer Curve: if you tax the rich to get revenue, they'll leave and you'll get less revenue. Well maybe there's another curve: if you make it extremely comfortable and desirable for homeless people in order to solve the homeless problem, you'll have a bigger and bigger homeless problem?
Maybe the problem isn't "high land prices" in San Francisco. Or even, "inequality." Maybe the issue is that the rest of the state / country don't have the same degree and quality of social programs and drug legalization as SF, and so SF is a natural place to go.
The Wall Street Journal recently published a good summary of the potential cash crisis at https://www.wsj.com/articles/u-s-states-face-biggest-cash-cr...
Quoting from the article:
"US States Face Biggest Cash Crisis Since the Great Depression: The drop in tax revenue has led to a total shortfall expected in the hundreds of billions of dollars—greater than 2019’s K-12 education budget for every state combined, or more than twice the amount spent that year on state roads and other transportation infrastructure."
I would note that it would be difficult to assess the FMV of different SBC for the purposes of these calculations. For example, engineers might get RSUs, and the CEO might get options with a particular strike price, or different amounts of RSUs based on hitting revenue/profitability targets. It wouldn't be simple to value each of these things a priori, and companies wouldn't just accept whatever value the SF govt employees come up if it means huge amounts of additional tax.
1: https://ballotpedia.org/San_Francisco,_California,_Propositi...
Let’s say you earn an outrageous salary working for a FAANG of about $450,000. That is about 3x the equivalent where I live for the same work but taxes are substantially higher and housing costs 6-10x. Numerically it doesn’t make any sense when the current value of my house (after doubling in value) is barely the downpayment of a house in the valley. Apartments are also ridiculously expensive and I would want to live in a tiny apartment with kids (my own, not roommates).
Then the other argument is that the valley is where the jobs are. My experience is that if you are an experienced and half competent software engineer there are plenty of jobs in every major metro.
So if I already have a high paying job and own real estate what is the pull to move to the Bay Area?
What if the CEO has 'an office' in South Bay but spends their time in the city?
This seems like the wrong tranche of government to be flirting with such a law.
> When there is no accessible rent-free land, any improvements in the condition of society, be they in the form of civilizational progress or local improvement, are recaptured in the form of higher land values, and the leftover wages after rent is paid will tend towards subsistence, as described by David Ricardo's Law of Rent.
Transfer taxes disincentivize transfers. What do we need more of in property constrained places like SF? Transfers.
What a shockingly stupid policy.
Trains, streets, cops, hospitals, public works, 31k employees, and so on.
In reality, this will create a bit of extra tax revenue, and push down SF exec salaries ever so slightly. Both good things. No company is moving out of SF, replacing their staff with contractors, etc. over such a tiny tax. It’s a very small step in the right direction IMO.
Seriously, how hard is it to find a new office in Oakland or San Jose?
So even if these changes were implemented statewide, it can be an impetus to leave. Laffer's curve is a bitch for the eat-the-rich crowd.
Note that it's "highest paid managerial employee" and not "CEO" or "highest paid executive".
I wonder, when will the balance change such that it no longer makes sense for any relevant company to be based off of San Francisco.
I wonder, how many bad regulations does San Francisco have to come up with before it finds itself in Detroit's shoes? It is harder for San Francisco, since the weather here is phenomenal, but not impossible.
The doubling of transfer tax on property over $10m however... that has a very real impact on a founder who has already made some money.
Some companies have already said that they will reduce pay of employees who relocate, which affect the way that the average pay vs CEO pay shakes out.
If companies wish to renumerate their CEOs more highly they should do so by also increasing the pay of the rest of their workers as this piece of legislation encourages. Sharing the benefits of good performance with the employees may have positive flow on effects as employees may feel rewarded for their positive work and consequently feel more motivated to continue working hard. Additionally it increases the sense of fairness and trust in the economic system and perhaps in society as well as more people that work hard reap the benefits of their work.
Overall this of legislation in my opinion is a good first step towards making employee owned businesses a more widely adopted model and creating a more equitable economic system.
EDIT: discouraging excessive payouts to CEOs, encourages directing that capital back into the company. Large corporate payouts do take away money that the company generated (not only the CEO) and I think this legislation recognises that CEOs also need to be held more accountable (in terms of renumeration) to the companies they lead as large renumeration is not always in the company's best interest (even when performing well)
This is a great way to incentivize CEOs to fire their lowest paid workers, outsource parts of the business that involve low-skilled labor.
I wonder if the median CEO will start making more. The going rate will become 99x approximately the SF average salary of 98k, or just under 10mm.
The article mentions another city where it's working - Portland, afair. How's it possible?
But what this tax will not do is change the very nature of San Francisco or dramatically alter its business environment. The tax is just too small for that to be the case. It's a tiny addition to a vast and complex and ever-changing web of taxes and regulations that large businesses in SF have been successfully dealing with for generations.
Businesses are already leaving SF. If they haven't seen the writing on the wall, they're ignorant.
SF has itself to blame. They squandered revenue, didn't fix real issues, and pandered to land owners.
Businesses will move to more business friendly cities, and they will become more distributed - it's cheaper and easier to negotiate that way.
SF is done.
San Francisco has been a global epicenter of new business creation in the past couple decades. Some of the most massive corporations on the planet have come to and expanded in SF in that time. Office rents have skyrocketed as a result, as has new office construction.
You're entitled to your own opinion, but don't lie.
Don't be so accusational. I'm not lying. [1,2]
> San Francisco has been a global epicenter of new business creation in the past couple decades. Some of the most massive corporations on the planet have come to and expanded in SF in that time.
Don't ignore or discount change. Nothing stays the same forever. Companies are starting up elsewhere and plenty of SF headquarters are pulling up roots.
[1] https://www.sfchronicle.com/business/article/2nd-most-valuab...
[2] https://www.bizjournals.com/sanfrancisco/news/2020/05/29/sta...
...until it's not. Amazon has shown us there are lots of attractive jurisdictions ready to shower companies with tax incentives to relocate; SF feels like a city that's enjoyed the benefits of many factors not directly of their making and they could be in for a strict reckoning. We will see...
Said with zero irony, as if this is the worst thing ever.
- Since "high CEO pay" is defined as 100x multiple of average pay, the first unintended incentive is for companies to cut back on hiring low-end labor, or 1099/outsource so that they do not drag down the average pay. This directly harms the employment prospects of people at the bottom.
- If it succeeds in reducing CEO pay, it's not clear that the money is redistributed to other employees, as opposed retained to by the company as capital, or returned to shareholders. And not that this matters much. Even if you were to redistribute, say Bobby Kottick's $30M compensation, it would result in a net-gain of ~$270 per month per employee at Activision. That is assuming the CEO's pay goes to ZERO. If this tax only results in a net -10% change in CEO pay, it's actual economic benefit to other workers is a rounding error.
- This arbitrarily favors companies of certain structure vs others. For example, a VC firm or Law firm has an extremely high average pay, while any operation that likely involves "real economy" employs a legion of low-pay workers. The CEO of a large, meat-and-potatoes kind of operation is far more likely to be dinged by the 100x rule than the head of a high end professional partnership. Why are VC firms special in the eyes of this law?
https://www.city-journal.org/san-franciscos-municipal-budget
> The CEO tax is expected to generate between $60 million to $140 million per year. Haney said he wants most of the money directed towards health services.
What he says and what will actually happen is two different things, especially in politics. If you have actually examined the URL I’ve posted, you might (maybe?) realize that money isn’t exactly the problem in the SF municipal budget. Maybe it is something else, like ehm.. actual governance?
How much does this really apply to SF tech companies?
Basically admitting that the thought process is charging as much taxes as you can possible get away with.
Did you think it would end any other way?
I am as libertarian as it comes but this looks like a proportionate response to pay disparity and a way to generate extra $$.
That being said I am skeptical of it being very successful in either of its goals.
Wikipedia: "In modern politics, liberty is the state of being free within society from control or oppressive restrictions imposed by authority on one's way of life, behavior, or political views."
The city of SF: Its horribly run to put it mildly, it gets an absolute fortune from taxes and the money "disappears". See the myriad homeless everywhere, think why doesn't the city spend any money on fixing the problem? They do, they spend 300M dollars a year on the homeless [1]. Lets talk about their budget, 13.7B[2], yes that Billion for a city with 883k residents. Looking elsewhere in CA at San Diego with has 1.3M residents, it has a budget of 4.3B[3] and although there are homeless in SD its not an apocalyptic scene like SF is.
Tech Companies: Having a huge number of offices in SF with everyone making 2-4x what an average family makes in a year in the US is going to bring in some serious money. While its fine they make that much, what is not is having a extreme concentration of companies that can run their business anywhere in the US or World. With Covid we are seeing record numbers leaving the city as they are no longer shackled to the SF offices.
Residents: Alot of SF housing owners are extremely resistant to building(as more housing supply reduces their home value). There is a fierce nimby movement that would like nothing more but to halt all development in the city as it changes the 'character' of the city[4].
Strict zoning/environment laws: These laws are typically voted in by alot of residents but some have been around a long time and plague california stifling development and housing. A very long read article that goes into depth can be found here - https://techcrunch.com/2014/11/02/so-you-want-to-fix-the-hou...
Summary: Add an incompetent local govt. mix in a huge influx of wealth and a splash of laws that stifle housing development in a city bound by 3 sides by water and you get the disaster that SF is.
[1] - https://townhall.com/tipsheet/timothymeads/2019/05/18/san-fr...
[2] - https://sfmayor.org/sites/default/files/CSF_Proposed_Budget_...
[3] - https://www.sandiego.gov/sites/default/files/legacy/iba/pdf/...
[4] - https://reason.com/2018/01/05/nimbyism-in-san-francisco-reac...
No, "CEO Tax" is a popular term for this style of tax, but its not tied to CEOs specifically; its triggered by the pay ratio between the "highest paid managerial employee" of the firm and the median full-time-equivalent pay of full-time and part-time employees based in the City.
This is coming from someone who's never voted for a single republican. Let's remember that [0] SF also just elected a DA who's parents were literally complicit in the Weather Underground bombings...
[0] - https://californiaglobe.com/section-2/san-francisco-voters-e...
Why not convert vacant offices to apartments?
fire codes?
not enough bathrooms?
lack of showers?
Err, plumbers exist, and showers and bathrooms are added to commercial buildings all the time. Nobody is suggesting simply telling people to live in existing office space as-is - converting them would include accounting for these things.
"Under the measure, gross receipts and CEO compensation will include money made from stock options, bonuses, tax refunds, and property, a caveat seen by many as a way to target the tech sector where CEOs are often compensated in non-salaried bonuses."