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This headline is combining two separate items with separate causes. PayPal is closing the SF office because the new tax regime makes their business model nonfu

This headline is combining two separate items with separate causes. PayPal is closing the SF office because the new tax regime makes their business model nonfunctional (as it does to all payments businesses). The tax would be effectively based on payment volume, rather than profit, and so more than their entire margin would burn up in taxes. Separately, PayPal is laying off staff across their other offices to cut expenses and transition further from a growth-of-revenues model to a model of stable revenue at lower cost. Now being not the time to try to have rapid growth in the space if you're already the entrenched player, at least according to them.

TedDoesntTalk 4y ago
> tax would be effectively based on payment volume, rather than profit Playing SimCity as a young kid taught me that raising taxes too much means people and businesses leave. Maybe the SF lawmakers did not play SimCity growing up.
- danbolt 4y ago
  I think that was a reflection of the game developer’s political views and the gameplay they strove to author.
- fzzzy 4y ago
  Maybe they want people to leave?
  - rbanffy 4y ago
    Reverting gentrification is a valid goal.
  - node-bayarea 4y ago
    Maybe it's Maybelline :)
- joemazerino 4y ago
  SF Lawmakers were too busy playing AI vs AI and then complaining about the results.
- Datenstrom 4y ago
  Maybe governance simulation can be worked into some standardized test for basic competence for lawmakers. Or is that not democratic?
  - tablespoon 4y ago
    > Maybe governance simulation can be worked into some standardized test for basic competence for lawmakers. Or is that not democratic? It would be profoundly anti-democratic. Just, as a thought experiment, imagine if the game was "Socialist Utopia: Central Planning Works." A requirement like you propose would amount to a program of ideological indoctrination, either deliberate or inadvertent.
- turadg 4y ago
  The gross receipts tax policy is from Proposition C. So decided by SF residents, not legislators. https://www.vox.com/2018/11/7/18065086/san-francisco-prop-c-marc-benioff-jack-dorsey https://www.vox.com/2018/11/7/18065086/san-francisco-prop-c-...
  - 1-6 4y ago
    If you say to residents, ‘tax the rich’ without providing much background, of course you’ll get their vote. Legislators are responsible for making the messaging clear and fair.
    - codefreeordie 4y ago
      At the same time, the voting public should also be smarter than this
      - yucky 4y ago
        That would be nice but it never works out that way.
        deepsun 4y ago
        Those who are not smart enough to see it -- ought to face the consequences. Besides, the same voters elect the legislators, so the blame is totally on voters.
    - JumpCrisscross 4y ago
      > you say to residents, ‘tax the rich’ without providing much background, of course you’ll get their vote This shifts too much responsibility off voters. Not every voting population is so predictably simple.
      - 1-6 4y ago
        It would be a good study to see how informed the average voter is especially when it comes down to local elections and not national.
- tablespoon 4y ago
  > Playing SimCity as a young kid taught me that raising taxes too much means people and businesses leave. Maybe the SF lawmakers did not play SimCity growing up. That may be so, but SimCity didn't teach you about the real world, it taught you about SimCity. The simplified worlds of simulations often have ideological assumptions baked in, either deliberately or inadvertently.
  - TedDoesntTalk 4y ago
    Are you suggesting that no part of SimCity is based on “the real world”? See also https://news.ycombinator.com/item?id=31531997 https://news.ycombinator.com/item?id=31531997 currently front page on HN
    - tablespoon 4y ago
      I'm saying SimCity isn't the real world, it's DOS-based entertainment. So you can't jump from "SimCity behaves thusly" to "the world behaves thusly."
      - TedDoesntTalk 4y ago
        How do you explain the influx of businesses to places like Austin? It has nothing to do with taxes?
        aaomidi 4y ago
        Low land price is one. Moving businesses isn't free or cheap. These companies are gonna struggle once Texas goes full fascist. How many parents want to raise their kids in Texas now? What if your kid is LGBT? Anyway, good luck to companies moving into Texas. Market short term planning do be showing its face.
        tablespoon 4y ago
        > How do you explain the influx of businesses to places like Austin? It has nothing to do with taxes? Dude, SimCity isn't the real world, and cherry-picking some correspondence doesn't change that. Even a stopped clock will sometimes give you the right time.
deleted 4y ago
[deleted]
gamblor956 4y ago
PayPal is closing the SF office because the new tax regime makes their business model nonfunctional (as it does to all payments businesses). The tax would be effectively based on payment volume, rather than profit, and so more than their entire margin would burn up in taxes That is not how the tax works. It taxes gross receipts, in this case meaning Paypal's fees, not its total payment volume processed, because it only applies to amounts that would be considered income to Paypal for federal income tax purposes. Furthermore, the tax is allocated based on payroll, meaning that the tax is prorated based on the % of employees based in the city of SF vs elsewhere. Paypal reported net income (i.e., profits) of almost $4 billion last year on roughly $25 billion of revenue on roughly $1.250 trillion of payment volume. Only approximately 550 of their 26,500 employees were located in the SF office, meaning that their effective GRT rate would have been .016%, for a tax of roughly $4m, or approximately their costs for 10 employees. They can afford the gross receipts tax.
- TedDoesntTalk 4y ago
  I’m not sure I agree with your numbers, but even if they are correct, the tax punishes them for growth: growing their workforce or growing revenues.
  - danamit 4y ago
    Well, looking at the numbers it does not seem to be that big of a punishment. By anyway, punishing growth should be valid, IT workers are doing well, the homeless that are to be helped is not like they gonna be hired as software devs at PayPal. Taxes are nothing but a reallocation of resources and it always has been, and it is the price you pay for living in a society, and it is worth it, you'd rather have the addicted and mentally ill outside of streets one day you might get stabbed by one of them. Also it is not just about taxes, the gov need to take some drastic measures too.
    - TedDoesntTalk 4y ago
      > Taxes are nothing but a reallocation of resources Only when they are used to pay for social programs. Not when they are used to pay things like infrastructure, defense, etc.

TedDoesntTalk 4y ago

> tax would be effectively based on payment volume, rather than profit Playing SimCity as a young kid taught me that raising taxes too much means people and businesses leave. Maybe the SF lawmakers did not play SimCity growing up.

danbolt 4y ago
I think that was a reflection of the game developer’s political views and the gameplay they strove to author.
fzzzy 4y ago
Maybe they want people to leave?
- rbanffy 4y ago
  Reverting gentrification is a valid goal.
- node-bayarea 4y ago
  Maybe it's Maybelline :)
joemazerino 4y ago
SF Lawmakers were too busy playing AI vs AI and then complaining about the results.
Datenstrom 4y ago
Maybe governance simulation can be worked into some standardized test for basic competence for lawmakers. Or is that not democratic?
- tablespoon 4y ago
  > Maybe governance simulation can be worked into some standardized test for basic competence for lawmakers. Or is that not democratic? It would be profoundly anti-democratic. Just, as a thought experiment, imagine if the game was "Socialist Utopia: Central Planning Works." A requirement like you propose would amount to a program of ideological indoctrination, either deliberate or inadvertent.
turadg 4y ago
The gross receipts tax policy is from Proposition C. So decided by SF residents, not legislators. https://www.vox.com/2018/11/7/18065086/san-francisco-prop-c-marc-benioff-jack-dorsey https://www.vox.com/2018/11/7/18065086/san-francisco-prop-c-...
- 1-6 4y ago
  If you say to residents, ‘tax the rich’ without providing much background, of course you’ll get their vote. Legislators are responsible for making the messaging clear and fair.
  - codefreeordie 4y ago
    At the same time, the voting public should also be smarter than this
    - yucky 4y ago
      That would be nice but it never works out that way.
      - deepsun 4y ago
        Those who are not smart enough to see it -- ought to face the consequences. Besides, the same voters elect the legislators, so the blame is totally on voters.
  - JumpCrisscross 4y ago
    > you say to residents, ‘tax the rich’ without providing much background, of course you’ll get their vote This shifts too much responsibility off voters. Not every voting population is so predictably simple.
    - 1-6 4y ago
      It would be a good study to see how informed the average voter is especially when it comes down to local elections and not national.
tablespoon 4y ago
> Playing SimCity as a young kid taught me that raising taxes too much means people and businesses leave. Maybe the SF lawmakers did not play SimCity growing up. That may be so, but SimCity didn't teach you about the real world, it taught you about SimCity. The simplified worlds of simulations often have ideological assumptions baked in, either deliberately or inadvertently.
- TedDoesntTalk 4y ago
  Are you suggesting that no part of SimCity is based on “the real world”? See also https://news.ycombinator.com/item?id=31531997 https://news.ycombinator.com/item?id=31531997 currently front page on HN
  - tablespoon 4y ago
    I'm saying SimCity isn't the real world, it's DOS-based entertainment. So you can't jump from "SimCity behaves thusly" to "the world behaves thusly."
    - TedDoesntTalk 4y ago
      How do you explain the influx of businesses to places like Austin? It has nothing to do with taxes?
      - aaomidi 4y ago
        Low land price is one. Moving businesses isn't free or cheap. These companies are gonna struggle once Texas goes full fascist. How many parents want to raise their kids in Texas now? What if your kid is LGBT? Anyway, good luck to companies moving into Texas. Market short term planning do be showing its face.
      - tablespoon 4y ago
        > How do you explain the influx of businesses to places like Austin? It has nothing to do with taxes? Dude, SimCity isn't the real world, and cherry-picking some correspondence doesn't change that. Even a stopped clock will sometimes give you the right time.

deleted 4y ago

[deleted]

gamblor956 4y ago

PayPal is closing the SF office because the new tax regime makes their business model nonfunctional (as it does to all payments businesses). The tax would be effectively based on payment volume, rather than profit, and so more than their entire margin would burn up in taxes That is not how the tax works. It taxes gross receipts, in this case meaning Paypal's fees, not its total payment volume processed, because it only applies to amounts that would be considered income to Paypal for federal income tax purposes. Furthermore, the tax is allocated based on payroll, meaning that the tax is prorated based on the % of employees based in the city of SF vs elsewhere. Paypal reported net income (i.e., profits) of almost $4 billion last year on roughly $25 billion of revenue on roughly $1.250 trillion of payment volume. Only approximately 550 of their 26,500 employees were located in the SF office, meaning that their effective GRT rate would have been .016%, for a tax of roughly $4m, or approximately their costs for 10 employees. They can afford the gross receipts tax.

TedDoesntTalk 4y ago
I’m not sure I agree with your numbers, but even if they are correct, the tax punishes them for growth: growing their workforce or growing revenues.
- danamit 4y ago
  Well, looking at the numbers it does not seem to be that big of a punishment. By anyway, punishing growth should be valid, IT workers are doing well, the homeless that are to be helped is not like they gonna be hired as software devs at PayPal. Taxes are nothing but a reallocation of resources and it always has been, and it is the price you pay for living in a society, and it is worth it, you'd rather have the addicted and mentally ill outside of streets one day you might get stabbed by one of them. Also it is not just about taxes, the gov need to take some drastic measures too.
  - TedDoesntTalk 4y ago
    > Taxes are nothing but a reallocation of resources Only when they are used to pay for social programs. Not when they are used to pay things like infrastructure, defense, etc.