EDITORIAL The new tech companies that are making waves in San Francisco — Airbnb in the short-term rental business and Lyft and Uber in the taxi industry — may describe themselves as innovative and disruptive, and they may be appealing to investors.
But there's a more accurate word that describes their relationship to the city:
The way these companies are luring customers isn't really about high-tech applications or brilliant business models. They've just found a way to get around the rules that everyone else has to obey.Read more »
Why do Mayor Ed Lee, Board of Supervisors President David Chiu, and San Francisco's two major daily newspapers want to punish success? Because that's exactly what their proposal to create a new gross receipts tax for businesses – in which corporations would be taxed more as they grow, thus encouraging economic stagnation – would do.Read more »
Mayor Ed Lee and his business community allies failed to reach an agreement with labor and progressives by today's deadline for submitting fall ballot measures to the Board of Supervisors, leading progressive Sup. John Avalos to introduce a business tax reform measure that would compete with Lee's proposal.Read more »
When Mayor Ed Lee unveiled his proposed $7.3 billion city budget today, it was a sharp contrast to the annual budget rituals of his predecessor, Gavin Newsom, both in style and substance. Not only did Lee present a budget without employee layoffs or cuts to critical social services, but he capped months of collaborative work with the Board of Supervisors by presenting his proposal in Board Chambers.Read more »
The issue is the way the city taxes businesses. Way back in the 1990s, the city had two types of tax -- a payroll tax and a gross receipts tax. The system was complicated, but essentially, companies paid a portion (about 1.5 percent) of payroll or gross receipts, whichever was higher. That made a certain amount of sense; since under California law, cities can't tax corporate income (profits), there's no simple way to enact a perfect local tax, but payroll and gross receipts are both rough approximations of the size of an company.
But in the late 1990s, a group of big corporations, including Pacific Gas & Electric, Chevron, Bechtel, the Gap, Levi Strauss, General Motors, Equity Office Properties, Eastman Kodak, Safeway, Charles Schwab, the Hearst Corporation, the Giants, Macy's, Neiman Marcus, Nordstrom, the Shorenstein Company, and others filed a lawsuit to overturn the tax system. We called them the "Filthy 52." The gross receipts tax was unfair, they argued -- and in 2001, with only three dissenting votes, the Board of Supervisors settle the suit by repealing that part of the tax structure.