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> This is just....staggeringly stupid. It just penalizes low margin businesses, for no reason. How can anyone possibly think this is a good idea? You might wan

> This is just....staggeringly stupid. It just penalizes low margin businesses, for no reason. How can anyone possibly think this is a good idea? You might want to ask sf.citi, the SF tech industry lobbying group who came up with it in 2012. Here's a video of Jack Dorsey campaigning for the gross receipts tax as CEO of Square.[1] The argument then, of course, was that we shouldn't tax early stage pre-revenue tech companies based on their payroll because it increases their burn rate. Better to wait until they generate revenue and tax that. Help support the growth of new companies so they can bring in more tax revenue in the long run. Or so the argument went. Now that they're making money and it's time to pay up, of course, they've changed their tune. Suddenly they've discovered that the system they lobbied for and got is "unfair" and they still shouldn't pay taxes. [1] https://www.sfgate.com/business/article/SF-Citi-video-plugs-in-tech-Prop-E-3930793.php https://www.sfgate.com/business/article/SF-Citi-video-plugs-...

ergocoder 7y ago
It's unfair because Square pays more tax than Saleforce. Not because they have to pay tax. It would be great next time if you can mention the whole reason around. unfairness. Here's the tweet: https://twitter.com/jack/status/1053312151136362496 https://twitter.com/jack/status/1053312151136362496 Do you think that's fair?
- NetToolKit 7y ago
  I haven't researched this issue much, but I think it's fair to expect that the CEO of Square could have anticipated this becoming an issue if Square succeeded. abalone's comment that "they've changed their tune. ... and they still shouldn't pay taxes" could simply be hyperbolic, depending on how charitable people are in their interpretation (e.g. "shouldn't pay [the full amount of] taxes"). I think the main thrust of abalone's comment stands: the CEO of Square pushed for a tax that many think is absurd (e.g. darawk), and now that Square has grown and the tax is unfavorable for them, Square wants to change the tax that it seems to have lobbied for (and presumably thought was fair back then) -- that makes Square seem opportunistic [and not having the community's best interest in mind when the CEO lobbied for the tax]. At least, I think that is abalone's implication.
  - ergocoder 7y ago
    I don't really see any problem with how Jack behaved. Jack wanted companies to pay more tax to the city. He helped lobby it. But this part where Saleforce pays less tax than Square is absurd. So, he's against it. I don't really see any problem with this line of thinking. To give the exact number, Square pays 20m, and Saleforce pays 10m. But Saleforce is 2-10x bigger than Square. No matter how you cut it. It's not fair. I want people to pay more income tax as well (to fund other initiatives). But would I want to pay tax MORE than anybody else? Probably not. Does that make me a hypocrite? Hell no. It just feels like people are being obtuse at this point :S
    - abalone 7y ago
      > Jack wanted companies to pay more tax to the city. Uh, no. Jack has specifically and consistently lobbied against paying taxes (see: previous link). In 2011 he threatened to threatened to move Twitter to neighboring Brisbane unless he got the now infamous mid market tax break.[1] Exactly what Stripe just did. He greatly exaggerates the impact of a hypothetical $10M extra towards fighting homelessness on a $26B company with $3B in revenues. The best response to this “fairness” line was from Marc Benioff himself, who said to Jack, ok, tell us how much you or Square or Twitter has given towards addressing homelessness in any other form. Crickets from Jack. He really doesn’t like paying taxes or giving. [1] https://www.sfexaminer.com/news/square-ceo-jack-dorseys-tax-fight-goes-beyond-prop-c/ https://www.sfexaminer.com/news/square-ceo-jack-dorseys-tax-...
      - ergocoder 7y ago
        Yet you still doesn't give a straight answer how it is fair that Saleforce pays less tax than Square. I don't blame you. Nobody has answered that question. Even Benioff merely said ~$10m was nothing to Square. He implied it didn't matter that it wasn't fair because the amount was so little. Like Wut? Because Square doesn't help homeless much (I don't really know how much compared to Saleforce and other companies), so we make a law for a smaller company to pay tax more than a bigger company? We can simply disregard fairness? Really? Also, Jack explicitly said that he has no problem paying taxes to the city; he wants to pay tax fairly when considering peer companies. We just gonna need to agree to disagree on whether jack is willing to pay tax.
darawk 7y ago
I mean, taxing payroll is just as stupid. You tax net income, because it's normalized across businesses. Taxing payroll or revenue is just economic nonsense.
- gamblor956 7y ago
  Net income isn't normalized across businesses. Most businesses aim for net income. Most startups don't even try, even if they've raised hundreds of millions of dollars and occupy fancy offices. (It's also very easy for IP-based businesses to shift where income is generated.) And that's the basic reasoning behind SF's gross proceeds tax. It's a uniquely SV tax that only works because so many unicorns built their house of cards out of claiming revenue for things no other business would claim as revenue.
  - darawk 7y ago
    > Net income isn't normalized across businesses. > Most businesses aim for net income. Most startups don't even try, even if they've raised hundreds of millions of dollars and occupy fancy offices. (It's also very easy for IP-based businesses to shift where income is generated.) Why would you want to tax a startup that isn't making any money? The whole point of government taxation is to generate revenue from profitable business activity occurring there. Taxing businesses that aren't even making money is ridiculous. And sure, you can shift where profits are generated. But you can also just not be in SF. Which is exactly what's happening.
    - huac 7y ago
      how much tax should Amazon pay?
  - xyzzyz 7y ago
    Net income isn't normalized across businesses. Yes, it would be great if we could have some kind of Generally Accepted Accounting Practices that would specify what counts as net income and what doesn't.
  - toast0 7y ago

ergocoder 7y ago

It's unfair because Square pays more tax than Saleforce. Not because they have to pay tax. It would be great next time if you can mention the whole reason around. unfairness. Here's the tweet: https://twitter.com/jack/status/1053312151136362496 https://twitter.com/jack/status/1053312151136362496 Do you think that's fair?

NetToolKit 7y ago
I haven't researched this issue much, but I think it's fair to expect that the CEO of Square could have anticipated this becoming an issue if Square succeeded. abalone's comment that "they've changed their tune. ... and they still shouldn't pay taxes" could simply be hyperbolic, depending on how charitable people are in their interpretation (e.g. "shouldn't pay [the full amount of] taxes"). I think the main thrust of abalone's comment stands: the CEO of Square pushed for a tax that many think is absurd (e.g. darawk), and now that Square has grown and the tax is unfavorable for them, Square wants to change the tax that it seems to have lobbied for (and presumably thought was fair back then) -- that makes Square seem opportunistic [and not having the community's best interest in mind when the CEO lobbied for the tax]. At least, I think that is abalone's implication.
- ergocoder 7y ago
  I don't really see any problem with how Jack behaved. Jack wanted companies to pay more tax to the city. He helped lobby it. But this part where Saleforce pays less tax than Square is absurd. So, he's against it. I don't really see any problem with this line of thinking. To give the exact number, Square pays 20m, and Saleforce pays 10m. But Saleforce is 2-10x bigger than Square. No matter how you cut it. It's not fair. I want people to pay more income tax as well (to fund other initiatives). But would I want to pay tax MORE than anybody else? Probably not. Does that make me a hypocrite? Hell no. It just feels like people are being obtuse at this point :S
  - abalone 7y ago
    > Jack wanted companies to pay more tax to the city. Uh, no. Jack has specifically and consistently lobbied against paying taxes (see: previous link). In 2011 he threatened to threatened to move Twitter to neighboring Brisbane unless he got the now infamous mid market tax break.[1] Exactly what Stripe just did. He greatly exaggerates the impact of a hypothetical $10M extra towards fighting homelessness on a $26B company with $3B in revenues. The best response to this “fairness” line was from Marc Benioff himself, who said to Jack, ok, tell us how much you or Square or Twitter has given towards addressing homelessness in any other form. Crickets from Jack. He really doesn’t like paying taxes or giving. [1] https://www.sfexaminer.com/news/square-ceo-jack-dorseys-tax-fight-goes-beyond-prop-c/ https://www.sfexaminer.com/news/square-ceo-jack-dorseys-tax-...
    - ergocoder 7y ago
      Yet you still doesn't give a straight answer how it is fair that Saleforce pays less tax than Square. I don't blame you. Nobody has answered that question. Even Benioff merely said ~$10m was nothing to Square. He implied it didn't matter that it wasn't fair because the amount was so little. Like Wut? Because Square doesn't help homeless much (I don't really know how much compared to Saleforce and other companies), so we make a law for a smaller company to pay tax more than a bigger company? We can simply disregard fairness? Really? Also, Jack explicitly said that he has no problem paying taxes to the city; he wants to pay tax fairly when considering peer companies. We just gonna need to agree to disagree on whether jack is willing to pay tax.

darawk 7y ago

I mean, taxing payroll is just as stupid. You tax net income, because it's normalized across businesses. Taxing payroll or revenue is just economic nonsense.

gamblor956 7y ago
Net income isn't normalized across businesses. Most businesses aim for net income. Most startups don't even try, even if they've raised hundreds of millions of dollars and occupy fancy offices. (It's also very easy for IP-based businesses to shift where income is generated.) And that's the basic reasoning behind SF's gross proceeds tax. It's a uniquely SV tax that only works because so many unicorns built their house of cards out of claiming revenue for things no other business would claim as revenue.
- darawk 7y ago
  > Net income isn't normalized across businesses. > Most businesses aim for net income. Most startups don't even try, even if they've raised hundreds of millions of dollars and occupy fancy offices. (It's also very easy for IP-based businesses to shift where income is generated.) Why would you want to tax a startup that isn't making any money? The whole point of government taxation is to generate revenue from profitable business activity occurring there. Taxing businesses that aren't even making money is ridiculous. And sure, you can shift where profits are generated. But you can also just not be in SF. Which is exactly what's happening.
  - huac 7y ago
    how much tax should Amazon pay?
- xyzzyz 7y ago
  Net income isn't normalized across businesses. Yes, it would be great if we could have some kind of Generally Accepted Accounting Practices that would specify what counts as net income and what doesn't.
- toast0 7y ago