PayPal Announces Layoffs, Closes San Fransisco Office
gizmodo.com
gizmodo.com
PayPal is closing the SF office because the new tax regime makes their business model nonfunctional (as it does to all payments businesses). The tax would be effectively based on payment volume, rather than profit, and so more than their entire margin would burn up in taxes.
Separately, PayPal is laying off staff across their other offices to cut expenses and transition further from a growth-of-revenues model to a model of stable revenue at lower cost. Now being not the time to try to have rapid growth in the space if you're already the entrenched player, at least according to them.
That is not how the tax works. It taxes gross receipts, in this case meaning Paypal's fees, not its total payment volume processed, because it only applies to amounts that would be considered income to Paypal for federal income tax purposes. Furthermore, the tax is allocated based on payroll, meaning that the tax is prorated based on the % of employees based in the city of SF vs elsewhere.
Paypal reported net income (i.e., profits) of almost $4 billion last year on roughly $25 billion of revenue on roughly $1.250 trillion of payment volume. Only approximately 550 of their 26,500 employees were located in the SF office, meaning that their effective GRT rate would have been .016%, for a tax of roughly $4m, or approximately their costs for 10 employees. They can afford the gross receipts tax.
Looks like PayPal's gross income was around 3x their net income for 2021: 12.1 billion [2]
1: https://sftreasurer.org/business/taxes-fees/gross-receipts-t...
2: https://www.wsj.com/market-data/quotes/PYPL/financials/annua...
For a more salient point of comparison, PayPal is complaining about paying $0.01 for every $100 of revenue.
By anyway, punishing growth should be valid, IT workers are doing well, the homeless that are to be helped is not like they gonna be hired as software devs at PayPal.
Taxes are nothing but a reallocation of resources and it always has been, and it is the price you pay for living in a society, and it is worth it, you'd rather have the addicted and mentally ill outside of streets one day you might get stabbed by one of them.
Also it is not just about taxes, the gov need to take some drastic measures too.
So that's just fortunate for you. California has to solve its problems, it is the hand that it was dealt to them and they have to make the best out of it.
If it is not suitable for you to live there, it is fine.
Only when they are used to pay for social programs. Not when they are used to pay things like infrastructure, defense, etc.
Playing SimCity as a young kid taught me that raising taxes too much means people and businesses leave. Maybe the SF lawmakers did not play SimCity growing up.
That may be so, but SimCity didn't teach you about the real world, it taught you about SimCity. The simplified worlds of simulations often have ideological assumptions baked in, either deliberately or inadvertently.
See also https://news.ycombinator.com/item?id=31531997 currently front page on HN
So by that logic everything is worthless because nothing is the real world. Good luck working with that mindset.
How many parents want to raise their kids in Texas now? What if your kid is LGBT?
Anyway, good luck to companies moving into Texas. Market short term planning do be showing its face.
Dude, SimCity isn't the real world, and cherry-picking some correspondence doesn't change that. Even a stopped clock will sometimes give you the right time.
It's not because you use simple models for reality that the models are wrong. They may be wrong in extreme circumstances but still generally true - like all models.
https://www.vox.com/2018/11/7/18065086/san-francisco-prop-c-...
This shifts too much responsibility off voters. Not every voting population is so predictably simple.
Genuine question: how would you measure this?
Besides, the same voters elect the legislators, so the blame is totally on voters.
It would be profoundly anti-democratic. Just, as a thought experiment, imagine if the game was "Socialist Utopia: Central Planning Works." A requirement like you propose would amount to a program of ideological indoctrination, either deliberate or inadvertent.
Just moved countries and not to keep my job for a year so yay shitting my pants