7 ms·

I have lived in San Francisco since 2005. Over the time I've lived here, we've had the opposite problem: lots of highly paid tech firms moving into SF. This has

I have lived in San Francisco since 2005. Over the time I've lived here, we've had the opposite problem: lots of highly paid tech firms moving into SF. This has changed the nature of San Francisco in a way that many dislike, including me. I was initially attracted to San Francisco because, it was chill, it was beautiful, and it had a lot of eccentric, really interesting people. Many of our good friends had to leave over the years as SF has becoming more unlivable because rents have gone up so much, and also it's just not as fun, it's crowded and stressed. I am aware that I am a part of the problem: my wife and I are white, yuppie, dink tech workers. :) These issues are complex. I voted yes on Proposition L: the tax is quite small and I think the tech firms are unlikely to leave, meanwhile SF can get more taxes from them (many of them were historically given tax breaks, like Twitter, to move into the mid-market area). If they do leave, I don't see that as a bad thing. Meanwhile socioeconomic disparity is an oozing sore in San Francisco, we have billionaires rubbing elbows with homeless people every day. Nationally, we've had round after round of tax cuts for the wealthiest, if SF wants to tax excessive income disparity, I say, fair enough.

drak0n1c 6y ago
Taxes tend to increase price levels, not reduce them. Costs are passed through to every level.
- gmadsen 6y ago
  not 1-1. a personal wealth tax is not felt or distributed down lane. As long as it is not a company tax, it will not be directly pointed to the buyer.
  - kansface 6y ago
    > The tax will levy an extra 0.1% to 0.6% on gross receipts made in San Francisco for companies ...
  - stale2002 6y ago
    > personal wealth tax is not felt Yes it would be. A tax on salaries, would force companies to have to pay more to attract talent. And these are additional costs that the company would have to pay.
- Retric 6y ago
  It’s not that simple. You can’t pass on taxes on profits. If hypothetically charging 57$ maximizes profits then raising prices just lowers profits. Alternatively, if some aspect of your process like sugar is taxed then companies seek alternatives like corn syrup. That extends to property taxes, executive pay, etc where companies seek alternatives to better utilize resources. Though in the case of salaries that my end up as various executive perks.
  - deleted 6y ago
    [deleted]
- heavyset_go 6y ago
  Prices are not determined by costs, but what the market will bear.
- LVTfan 6y ago
  Likely true of most taxes, but not true of a tax on land value. Taxing land value heavily causes underused land to either be put to good use or sold, at a reasonable price, to someone who will build on it. Taxing land value -- that is, collecting the lion's share of the annual rental value of the land for public purposes -- removes the speculative element, and makes it worth only what it is worth FOR USE. That almost always creates jobs, first for construction, and then to utilize the space. It may create housing, and goodness knows, much of California is in desperate need of housing. And housing creates jobs -- houses and highrises don't maintain themselves. Virtuous circle --- the opposite of the vicious one that Proposition has created (and which was easy to predict before it was enacted). If you want jobs and housing, tax land value. Otherwise, keep California doing what it does now.
  - drak0n1c 6y ago
    I agree land value tax is a far more efficient tax than property or revenue taxes. The goal should be to raise revenue with minimal impact on commercial decisions. Punitive revenue/wealth taxes are essentially a form of sin taxes and distort the marketplace.
kansface 6y ago
> if SF wants to tax excessive income disparity, I say, fair enough. None of the billionaires here made that money from their salary. This will not touch them at all. > If they do leave, I don't see that as a bad thing. Chasing away jobs and the tax base will not end well. There is a decent chance SF enters a financial death spiral from its pension obligations. At the very least, massive cuts are in order. SF will not be transformed magically back to the year 2005, but it could very well wind up back in the 70s.
- duhuh 6y ago
  That’s fine. The SF people think is SF, that used to be SF, does really well with 700,000 people and everyone with a shitty job.
- singron 6y ago
  The text of the measure refers to "compensation", of which it gives a specific definition that includes commissions, bonuses, and equity (specifically mentioning stock options). The $1 salary CEO isn't excluded if they also have a huge equity package. Although it doesn't mention capital gains, so if the CEO owns a significant part of their company already and doesn't have an additional vesting schedule, then they could make personal income from appreciation of the business that wouldn't be counted towards this bill.
  - kangaroozach 6y ago
    Paper gains are not realized gains. So it’s all about timing. At what point in time do they check to do the math?
  - kansface 6y ago
    Our billionaires are billionaires from their ownership stakes in the companies they founded. For instance, Jeff Besos only makes ~2 million per year in total compensation! He would pay no more in taxes if he were to move to SF (from this particular bill, anyway).
wpietri 6y ago
Same. I think it's fine if some businesses leave SF, and even more fine if their staff spread out. Given all our talk of internet-driven disruption and the world-changing nature of electronic communication, it's always been ridiculous that we had to cram everybody together in 0.01% of the US's land area.
thrill 6y ago
If you think white yuppie tech workers are part of the problem, then you are indeed part of the problem.
cheriot 6y ago
I've seen people take that position and I see a fundamental mistake. Look at rust belt cities. Look at NYC in the 70s. When employers leave the people left behind are not better off. This doesn't mean we need to kiss big tech ass, but we have a city where getting a job is a solved problem. Very few places on earth have that. Rent prices are the underlying problem pushing people out. Underlying _that_ problem is a lack of supply. SF zoned for and issued permits for a large number of offices, but not the corresponding residential structures to house those new workers. So they came here and were forced to compete with existing residents for a place to live. The fix is to keep the economic prosperity and build more housing. > Meanwhile socioeconomic disparity is an oozing sore in San Francisco I'd argue that mixed income neighborhoods are the best kind. Many of the mechanisms for disadvantaging poor communities require geographic segregation. School quality, policing practices, etc
- volume 6y ago
  > The fix is to keep the economic prosperity and build more housing. That makes sense to me. I don't keep up with exact SF policies but I'm guessing there are zoning and the NIMBY factor to deal with. Underlying this problem is? Money, influence and power? I know a soon to be ex-POTUS that might be the perfect man for the job! He can come in and cut all deals needed. Then SF is saved and then he goes from city to city and country to country to redeem himself.
  - cheriot 6y ago
    Yes, NIMBY zoning and a planning process that makes even zoning compliant projects difficult to impossible. The Board of Supervisors are elected from districts instead of city wide. This means they're heavily influenced by neighborhood associations with a vested interest in maintaining the status quo. Throw in the normal, human fear of change and... the result isn't pretty.
- rcpt 6y ago
  > Underlying _that_ problem is a lack of supply And underlying that problem is Prop 13 - the insane multi billion dollar tax break that Californians bestowed on all land speculators. Until it's gone nothing will change.
macspoofing 6y ago
>we've had the opposite problem: lots of highly paid tech firms moving into SF. Quite the problem ... the kind of problem that multitudes of cities and regions in the world are desperately trying to recreate. >This has changed the nature of San Francisco in a way that many dislike, including me. This is where progressives don't live up to their name. The nature of cities is constant change. Meanwhile the activists are desperately trying to keep change to a minimum so that the character of neighborhoods never changes. It's an interesting dichotomy. >because rents have gone up so much, and also it's just not as fun, it's crowded and stressed. Rents will drop if you increase density ... but that would mean building higher density housing and thereby accepting that the character of cities and neighborhoods change. >I am aware that I am a part of the problem: my wife and I are white, yuppie, dink tech workers. :) The fact that you're white and a tech worker isn't the problem. It's that you had the opportunity to move to San Fransciso for work due to the tech boom, and now you're trying to pull the ladder up so others cannot do the same.
- swiley 6y ago
  >Rents will drop if you increase density ... but that would mean building higher density housing and thereby accepting that the character of cities and neighborhoods change. I keep hearing proponents of strict exclusionary zoning laws arguing that they don't like the risk of having the value of their investment decrease because of this. SF will be a great example of how change happens weather you like it or not and allowing dense housing is what makes the change good or bad. You either sacrifice some of the view or sacrifice not having homeless camps.
  - jelliclesfarm 6y ago
    I have never seen rents drop due to high density. If anything, rents are cheaper in sparsely populated areas. Examples abound. Rents won’t become cheaper if we build more. However, building more will certainly mean more property taxes for the government. San Francisco gets several millions of dollars to spend from which they spend a measly amount on the homeless(and that’s over 350 million/annum)..where is the rest? Even the money spent on homeless solutions is mostly going to contracted non profits(look at their board..probably has ex-city employees as board members) or more public sector employees. With 350 million, I would have created a new sustainable village to house 1000 people with jobs inside. Instead, SF still huffs and puffs and spends tax dollars on piffle and squat.
shuckles 6y ago
Your comment seems to lack understanding of both the tax and San Francisco's problems. The tax would not apply to Twitter, and the Mid-Market tax break was tiny at about ~$50m over its entire life. In addition, all the inequality issues in San Francisco are of its own making: the city began pricing out median income households 40 years ago while the Federal government was simultaneously subsidizing long commutes. Therefore, the only people left are those who benefit from proximity to high paying jobs or those who benefit from the city's social services more than they value moving to lower COL places like, e.g., Phoenix.
umeshunni 6y ago
Around 2007, a gentleman named Steve Jobs invented the iPhone and unleashed another tech boom, driven primarily by the increased adoption and use of the smartphone and apps within them. The spoils from this boom primarily benefited companies and people based in and around the Bay Area. People there didn't realize that the rest of the country (and much of the developed world) were still struggling and haven't fully recovered from the 2008-10 recession. The increased prosperity and resulting tax base growth papered over the fundamental mismanagement and poor governance in that area. Some of the highest incomes and highest taxes in the country and yet some of the most dilapidated infrastructure, highest poverty rates and poorest quality of life in the country. "European taxes and third world quality of life" is how I describe the area to people. Yet, people moved here for the jobs and then new jobs followed the people. 14 years (i.e. half a generation) since then and at the beginning of what is another major recession and economic reset, it's perhaps difficult for most people to imaging that the appeal of the area has diminished and that things aren't magically going back to 2019. People have moved out, companies are hiring elsewhere, the tax base is down >50% and budgets are deep in the red. The local governments can try and raise taxes to squeeze a few million more here and there, but fundamentally, they will have to cut waste and cut spending in the next few years to survive. I'm not saying SF is going to become the next Detroit, but I remember NYC in the 70s or Seattle post-Boeing (also, early 70s) as an example of what happens to cities when a major industry leaves town. It's a death spiral of lower tax collection -> poorer services -> more people leaving.
- throwaway0a5e 6y ago
  >The increased prosperity and resulting tax base growth papered over the fundamental mismanagement and poor governance in that area This applies to sooooo many cities. I think money beyond the level required to provide basic services just gets wasted and the citizens see nearly nothing from it. It's so common it seems like some fundamental law of the universe.
- afiori 6y ago
  Your description made me think of California as the Xerox of the US
walshemj 6y ago
But they voted to screw low paid uber drivers out of employment rights - talk about "presentism"
jseliger 6y ago
Over the time I've lived here, we've had the opposite problem: lots of highly paid tech firms moving into SF. This has changed the nature of San Francisco in a way that many dislike, San Francisco's huge, number one problem has been and still is that it makes building new housing illegal: https://techcrunch.com/2014/04/14/sf-housing/ https://techcrunch.com/2014/04/14/sf-housing/. Increase supply and prices will eventually fall. This is not a complicated problem and the relationship between supply, demand, and price has been known since the time of Adam Smith. https://news.ycombinator.com/item?id=16704501 https://news.ycombinator.com/item?id=16704501
dragonwriter 6y ago
> the tech firms are unlikely to leave, meanwhile SF can get more taxes from them (many of them were historically given tax breaks, like Twitter, to move into the mid-market area). Twitter's highest paid executive looks like they make something in the $7M range (Dorsey's total comp is approximately zero for several years, as he is counting entirely on capital returns on his investment, not compensation from the firm); I'm doubting that their median SF pay is below ~$70K.

drak0n1c 6y ago

Taxes tend to increase price levels, not reduce them. Costs are passed through to every level.

gmadsen 6y ago
not 1-1. a personal wealth tax is not felt or distributed down lane. As long as it is not a company tax, it will not be directly pointed to the buyer.
- kansface 6y ago
  > The tax will levy an extra 0.1% to 0.6% on gross receipts made in San Francisco for companies ...
- stale2002 6y ago
  > personal wealth tax is not felt Yes it would be. A tax on salaries, would force companies to have to pay more to attract talent. And these are additional costs that the company would have to pay.
Retric 6y ago
It’s not that simple. You can’t pass on taxes on profits. If hypothetically charging 57$ maximizes profits then raising prices just lowers profits. Alternatively, if some aspect of your process like sugar is taxed then companies seek alternatives like corn syrup. That extends to property taxes, executive pay, etc where companies seek alternatives to better utilize resources. Though in the case of salaries that my end up as various executive perks.
- deleted 6y ago
  [deleted]
heavyset_go 6y ago
Prices are not determined by costs, but what the market will bear.
LVTfan 6y ago
Likely true of most taxes, but not true of a tax on land value. Taxing land value heavily causes underused land to either be put to good use or sold, at a reasonable price, to someone who will build on it. Taxing land value -- that is, collecting the lion's share of the annual rental value of the land for public purposes -- removes the speculative element, and makes it worth only what it is worth FOR USE. That almost always creates jobs, first for construction, and then to utilize the space. It may create housing, and goodness knows, much of California is in desperate need of housing. And housing creates jobs -- houses and highrises don't maintain themselves. Virtuous circle --- the opposite of the vicious one that Proposition has created (and which was easy to predict before it was enacted). If you want jobs and housing, tax land value. Otherwise, keep California doing what it does now.
- drak0n1c 6y ago
  I agree land value tax is a far more efficient tax than property or revenue taxes. The goal should be to raise revenue with minimal impact on commercial decisions. Punitive revenue/wealth taxes are essentially a form of sin taxes and distort the marketplace.

kansface 6y ago

> if SF wants to tax excessive income disparity, I say, fair enough. None of the billionaires here made that money from their salary. This will not touch them at all. > If they do leave, I don't see that as a bad thing. Chasing away jobs and the tax base will not end well. There is a decent chance SF enters a financial death spiral from its pension obligations. At the very least, massive cuts are in order. SF will not be transformed magically back to the year 2005, but it could very well wind up back in the 70s.

duhuh 6y ago
That’s fine. The SF people think is SF, that used to be SF, does really well with 700,000 people and everyone with a shitty job.
singron 6y ago
The text of the measure refers to "compensation", of which it gives a specific definition that includes commissions, bonuses, and equity (specifically mentioning stock options). The $1 salary CEO isn't excluded if they also have a huge equity package. Although it doesn't mention capital gains, so if the CEO owns a significant part of their company already and doesn't have an additional vesting schedule, then they could make personal income from appreciation of the business that wouldn't be counted towards this bill.
- kangaroozach 6y ago
  Paper gains are not realized gains. So it’s all about timing. At what point in time do they check to do the math?
- kansface 6y ago
  Our billionaires are billionaires from their ownership stakes in the companies they founded. For instance, Jeff Besos only makes ~2 million per year in total compensation! He would pay no more in taxes if he were to move to SF (from this particular bill, anyway).

wpietri 6y ago

Same. I think it's fine if some businesses leave SF, and even more fine if their staff spread out. Given all our talk of internet-driven disruption and the world-changing nature of electronic communication, it's always been ridiculous that we had to cram everybody together in 0.01% of the US's land area.

thrill 6y ago

If you think white yuppie tech workers are part of the problem, then you are indeed part of the problem.

cheriot 6y ago

I've seen people take that position and I see a fundamental mistake. Look at rust belt cities. Look at NYC in the 70s. When employers leave the people left behind are not better off. This doesn't mean we need to kiss big tech ass, but we have a city where getting a job is a solved problem. Very few places on earth have that. Rent prices are the underlying problem pushing people out. Underlying _that_ problem is a lack of supply. SF zoned for and issued permits for a large number of offices, but not the corresponding residential structures to house those new workers. So they came here and were forced to compete with existing residents for a place to live. The fix is to keep the economic prosperity and build more housing. > Meanwhile socioeconomic disparity is an oozing sore in San Francisco I'd argue that mixed income neighborhoods are the best kind. Many of the mechanisms for disadvantaging poor communities require geographic segregation. School quality, policing practices, etc

volume 6y ago
> The fix is to keep the economic prosperity and build more housing. That makes sense to me. I don't keep up with exact SF policies but I'm guessing there are zoning and the NIMBY factor to deal with. Underlying this problem is? Money, influence and power? I know a soon to be ex-POTUS that might be the perfect man for the job! He can come in and cut all deals needed. Then SF is saved and then he goes from city to city and country to country to redeem himself.
- cheriot 6y ago
  Yes, NIMBY zoning and a planning process that makes even zoning compliant projects difficult to impossible. The Board of Supervisors are elected from districts instead of city wide. This means they're heavily influenced by neighborhood associations with a vested interest in maintaining the status quo. Throw in the normal, human fear of change and... the result isn't pretty.
rcpt 6y ago
> Underlying _that_ problem is a lack of supply And underlying that problem is Prop 13 - the insane multi billion dollar tax break that Californians bestowed on all land speculators. Until it's gone nothing will change.

macspoofing 6y ago

>we've had the opposite problem: lots of highly paid tech firms moving into SF. Quite the problem ... the kind of problem that multitudes of cities and regions in the world are desperately trying to recreate. >This has changed the nature of San Francisco in a way that many dislike, including me. This is where progressives don't live up to their name. The nature of cities is constant change. Meanwhile the activists are desperately trying to keep change to a minimum so that the character of neighborhoods never changes. It's an interesting dichotomy. >because rents have gone up so much, and also it's just not as fun, it's crowded and stressed. Rents will drop if you increase density ... but that would mean building higher density housing and thereby accepting that the character of cities and neighborhoods change. >I am aware that I am a part of the problem: my wife and I are white, yuppie, dink tech workers. :) The fact that you're white and a tech worker isn't the problem. It's that you had the opportunity to move to San Fransciso for work due to the tech boom, and now you're trying to pull the ladder up so others cannot do the same.

swiley 6y ago
>Rents will drop if you increase density ... but that would mean building higher density housing and thereby accepting that the character of cities and neighborhoods change. I keep hearing proponents of strict exclusionary zoning laws arguing that they don't like the risk of having the value of their investment decrease because of this. SF will be a great example of how change happens weather you like it or not and allowing dense housing is what makes the change good or bad. You either sacrifice some of the view or sacrifice not having homeless camps.
- jelliclesfarm 6y ago
  I have never seen rents drop due to high density. If anything, rents are cheaper in sparsely populated areas. Examples abound. Rents won’t become cheaper if we build more. However, building more will certainly mean more property taxes for the government. San Francisco gets several millions of dollars to spend from which they spend a measly amount on the homeless(and that’s over 350 million/annum)..where is the rest? Even the money spent on homeless solutions is mostly going to contracted non profits(look at their board..probably has ex-city employees as board members) or more public sector employees. With 350 million, I would have created a new sustainable village to house 1000 people with jobs inside. Instead, SF still huffs and puffs and spends tax dollars on piffle and squat.

shuckles 6y ago

Your comment seems to lack understanding of both the tax and San Francisco's problems. The tax would not apply to Twitter, and the Mid-Market tax break was tiny at about ~$50m over its entire life. In addition, all the inequality issues in San Francisco are of its own making: the city began pricing out median income households 40 years ago while the Federal government was simultaneously subsidizing long commutes. Therefore, the only people left are those who benefit from proximity to high paying jobs or those who benefit from the city's social services more than they value moving to lower COL places like, e.g., Phoenix.

umeshunni 6y ago

Around 2007, a gentleman named Steve Jobs invented the iPhone and unleashed another tech boom, driven primarily by the increased adoption and use of the smartphone and apps within them. The spoils from this boom primarily benefited companies and people based in and around the Bay Area. People there didn't realize that the rest of the country (and much of the developed world) were still struggling and haven't fully recovered from the 2008-10 recession. The increased prosperity and resulting tax base growth papered over the fundamental mismanagement and poor governance in that area. Some of the highest incomes and highest taxes in the country and yet some of the most dilapidated infrastructure, highest poverty rates and poorest quality of life in the country. "European taxes and third world quality of life" is how I describe the area to people. Yet, people moved here for the jobs and then new jobs followed the people. 14 years (i.e. half a generation) since then and at the beginning of what is another major recession and economic reset, it's perhaps difficult for most people to imaging that the appeal of the area has diminished and that things aren't magically going back to 2019. People have moved out, companies are hiring elsewhere, the tax base is down >50% and budgets are deep in the red. The local governments can try and raise taxes to squeeze a few million more here and there, but fundamentally, they will have to cut waste and cut spending in the next few years to survive. I'm not saying SF is going to become the next Detroit, but I remember NYC in the 70s or Seattle post-Boeing (also, early 70s) as an example of what happens to cities when a major industry leaves town. It's a death spiral of lower tax collection -> poorer services -> more people leaving.

throwaway0a5e 6y ago
>The increased prosperity and resulting tax base growth papered over the fundamental mismanagement and poor governance in that area This applies to sooooo many cities. I think money beyond the level required to provide basic services just gets wasted and the citizens see nearly nothing from it. It's so common it seems like some fundamental law of the universe.
afiori 6y ago
Your description made me think of California as the Xerox of the US

walshemj 6y ago

But they voted to screw low paid uber drivers out of employment rights - talk about "presentism"

jseliger 6y ago

Over the time I've lived here, we've had the opposite problem: lots of highly paid tech firms moving into SF. This has changed the nature of San Francisco in a way that many dislike, San Francisco's huge, number one problem has been and still is that it makes building new housing illegal: https://techcrunch.com/2014/04/14/sf-housing/ https://techcrunch.com/2014/04/14/sf-housing/. Increase supply and prices will eventually fall. This is not a complicated problem and the relationship between supply, demand, and price has been known since the time of Adam Smith. https://news.ycombinator.com/item?id=16704501 https://news.ycombinator.com/item?id=16704501

dragonwriter 6y ago

> the tech firms are unlikely to leave, meanwhile SF can get more taxes from them (many of them were historically given tax breaks, like Twitter, to move into the mid-market area). Twitter's highest paid executive looks like they make something in the $7M range (Dorsey's total comp is approximately zero for several years, as he is counting entirely on capital returns on his investment, not compensation from the firm); I'm doubting that their median SF pay is below ~$70K.