San Francisco voters have recently approved a tax increase on large businesses in order to provide more services for the homeless, which is something the mayor opposed.
As reported recently on Finance & Commerce’s website, Proposition C, the ballot initiative, proposes an additional tax of at least 0.175 percent on businesses’ gross receipts over $50 million to put out nearly $300 million a year for homeless aid, almost doubling the city’s current funding. An estimated 60 percent of voters favored the initiative with all precincts reporting, according to the San Francisco Department of Elections.
With homelessness continuing to be a major crisis in San Francisco, where sky-high real estate costs and tech-fueled wealth widen the economic inequality gap, citizens want the homeless population of about 7,500 to be helped.
Like the city’s Mayor London Breed, tech companies including Square Inc., Stripe Inc. and Lyft Inc. also are against the initiative, as they believe that it would disproportionately tax businesses with large revenue and narrow margins. Marc Benioff, billionaire co-founder and co-chief executive officer of Salesforce.com Inc., which is the city’s largest tech employer, however, donated millions to support the initiative. California Sen. Dianne Feinstein and House Minority leader Nancy Pelosi who both won re-election Tuesday also support the initiative.
“The amazing thing is, these companies can afford it,” Benioff said in a Bloomberg TV interview last week. “For us, it’s just a $10 million tax. These are immaterial amounts to us. Ten million dollars doesn’t mean anything, you know, that’s less than the plane Jack Dorsey is going to fly around on.”
Opponents said that it didn’t get two-thirds approval of the electorate, which is required for tax hikes proposed by local governments for specific purposes.
In a statement Breed said that she will work with both sides to plan how to deliver on the measure’s goals and address any legal questions.
“The voters sent a clear message that they want an increase in funding to help meet this urgent challenge,” she said Wednesday. “I agree we need to build more housing and shelters, help those suffering from mental illness and substance-use disorders, and help people to exit homelessness — and business can pay more to make that happen.”
Many cities on the American West Coast are facing homeless and housing crises.
San Francisco’s initiative will affect about 400 businesses, the city’s controller said in a September report. The controller said the proposed tax could result in job losses, though they would be small in the context of the city’s large economy.
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