SF Approves Twitter Tax Break Deal

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/04/05/BA7R1IQM9D.DTL&type=printable

by rsuttongee • 15 years ago

21 26 15 years ago

OstiaAntica3• 15 years ago

This is outrageous and, in my opinion, is unconstitutional. Americans and American businesses are entitled to equal protection under the law, and handing out customized tax breaks to a couple neighborhoods in order to benefit a specific company is shameful and corrupt.

jessedhillon• 15 years ago

First off, the payroll tax applies only to companies with payrolls > $250k; does your demand for 'equal protection' mean that you insist on companies of all sizes paying this tax?

Second, the tax break is not Twitter-specific (although even if it were, that would not be unconstitutional). It applies to businesses located in a certain part of SF, and it exempts a company from the first six years of payroll taxes.

Third, city supervisors have the authority to adjust tax structures with a level of geographic-granularity. Why shouldn't they be allowed to make a dumpy part of town more attractive to businesses?

Do you complain when cities and states make themselves more attractive to outside businesses by giving exemptions to certain classes of companies? Do you complain when cities block big-box stores like Walmart from opening in their limits? (Since those are as targeted as this exemption.)

hugh3• 15 years ago

Personally, yes, I complain about both of these.

As for this specific deal... I'm not too concerned about it, but I think it's the kind of special deal that cities shouldn't be allowed to make. There's just too much potential for corruption when city hall can say "OK, businesses inside this particular neighbourhood don't have to pay taxes". (Gee, Mr Mayor, I've been so good to you with campaign donations over the years, how about you declare my block to be dumpy too?)

OstiaAntica3• 15 years ago

All of this company-specific state and local tax policy, which has proliferated in recent years, is highly irregular, prone to corruption, and violates the spirit of the constitution and American capitalism. Governments should strive to treat everyone equally in the business world, and not use tax policy to play favorites and pick winners and losers. If the underlying policy is bad for the city it should be repealed city-wide.

Local zoning is different from tax policy, it is the customized, company-specific tax handouts that are objectionable.

doyoulikeworms• 15 years ago

How is it corrupt? And isn't that a net gain for the city, since Twitter was going to up and move a few miles south?

jeffreymcmanus3• 15 years ago

They were threatening to move to Brisbane, as a way to avoid a 1% city tax on payrolls (which, importantly, includes proceeds from stock options). But it's questionable as to whether a company that moves from San Francisco to Brisbane (which, let's face it, is a dump) would be better off moving. How excited would you be to commute down there if you had a similar job opportunity somewhere else? Would it be worth the 1% in payroll they'll end up saving? I have a hard time envisioning it.

It's great that the mid-Market Street area will (presumably) improve after this happens, whenever it happens. I just wish that in a world in which San Francisco is cutting back on the number of days in the school year that they could find a way to balance the books other than issuing big corporate welfare packages.

OstiaAntica3• 15 years ago

The problem is that other companies, those without Twitter's investors and PR team, still have the pay the tax. If it is bad policy, which it is, it should be repealed for all city businesses.

tptacek• 15 years ago

Simple, fair, effective.

Pick 1.

bgentry• 15 years ago

Is that the legislative version of the CAP theorem? the SFE theorem?

uuilly• 15 years ago

Bureaucrats and politicians who make ad-hoc decisions like this do a lot of indirect damage to companies. What they have effectively done is raised uncertainty for businesses in SF. Will we get a break? Will our competition? Etc, etc. Uncertainty adds to risk and risk adds to costs.

orijing• 15 years ago

Apologies in advance for sounding so pessimistic, but this is just another example of beggar-thy-neighbor tax/tax-break policies that limit government revenue potential.

Aloisius• 15 years ago

Actually, San Francisco got it right.

Instead of giving Twitter a tax break, they're giving anyone who moves into mid-market or the Tenderloin a tax break. Mid-market has been a blight for decades and plans to revitalize the area have never panned out. The Tenderloin (especially lower Tenderloin), isn't any better.

I think this is a great alternative to the city dumping money into the area. It'll create a powerful incentive to move there regardless of the blight and the effect of a few thousand engineers moving into that area will be dramatic.

I just wish it was for more than 6 years since I think it'll take longer than that to revitalize the neighborhood.

ajays4• 15 years ago

IMHO, this entire 1.5% payroll tax should go. And while we're at it, lets bring the property tax below 1%. And sales tax should go back to the 8% that it used to be.

Yesterday I got an email from SEIU (the government employees union), asking me to write in opposing this deal. It turns out there are over 14,000 city employees in the City + County of SF. For a population of under 800,000 . Wow. And in last years election, they were pushing hard for a ballot initiative that would have slapped an additional tax on hotel rooms.

There is just too much bureaucracy in this city. As revenues have gone up, the bureaucracy has ballooned. The City's annual budget is $6 Billion; and yet they can't find the $300K to support the SF Botanical Garden? In the meantime, personnel costs keep skyrocketing. Politicians keep hiring their cronies. For example: a local politician served before there was a law providing for healthcare benefits upon retirement for politicians. So he was hired for a month on the City payroll; his previous service counted, and voila! Now he has subsidized healthcare for the rest of his life. Lucrative Parking Garage management contracts are awarded at below market rates to cronies, who make a tidy profit.

Abuse is rampant all across San Francisco. The only way to stop is to stop the flow of funds that enables such abuse.

[edit: I had written 34,000 earlier; corrected it to 14,000 City employees]

Duff2• 15 years ago

Try living in Upstate NY. My school taxes were $2,500 in 2007. With no change in property assessment, they are up to $3,400 this year. And we just found out that the local library wants to jack their portion of the tax by over 25%.

This place was a boomtown in the 1960's. Today, the booming business is in demolishing abandoned buildings.

ajays4• 15 years ago

In San Francisco, a 2-BR condo goes for around $800K. At a 1.16% property tax rate, you'll be paying $9000/year in property taxes. How's that for a tax rate?

whyenot• 15 years ago

Yesterday I got an email from SEIU (the government employees union), asking me to write in opposing this deal. It turns out there are over 34,000 government employees in the City + Country of SF. For a population of under 800,000 . Wow.

Why does this surprise you? SF has SF State, UCSF, Hastings Law, the 9th Circuit Court, USGS, GGNRA and is home to many other government agencies. Also, corruption and patronage aren't exactly new in SF, they have been part and parcel in the city going back to before the 1906 earthquake. If anything, SF is a lot less corrupt now than it was during the dot com boom when Willie Brown was mayor.

phlux• 15 years ago

You still need to include the employees of DPH and DPW in your count - so the count is still really high. ~25K

jellicle• 15 years ago

14,000 full and part-time city employees to run a city of 800,000.

You love the city's services so much that you chose to live there, yet because you are an expert city planner, you are confident that all those services could be provided with fewer staff. Police, Fire, EMS, garbage, roads, parks, public health, water supply. Feel free to check the box next to the services in that list that you think should not be provided, and feel free to relocate to a city that does not in fact provide those services.

ajays4• 15 years ago

No, I don't love the City's services; I love the people who LIVE in the City. The streets are full of potholes. The public transit system (MUNI) is chronically broken (why? because 70% of their cost is personnel!). There are 9000 City employees who make more than $100K per year; when I have friends who are barely able to get by.

Remember: the Government of SF didn't make this City like some Disneyland and then people moved in; the people were here first . You'd be hard-pressed to find anybody in San Francisco who moved here because "the City's services are great".

SF Approves Twitter Tax Break Deal

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