Thanks Francoise…a re-read yielded a couple of fixes. Re-sent corrected.
Mike
Ordinance E, the Gross Receipts Tax measure suggests it will create a “fairer” taxing structure if there is such a thing. But when an admitted $28.5M tax increase, taking over 60 pages to explain, is submitted by the mayor just before election deadlines, you know it’s time to grab your wallet and run for cover.
E correctly states payroll taxes discourage job creation, economic growth and lowers wages. It makes sense. Tax something and you get less of it. Measure E acknowledges this by exempting small businesses with receipts less than $1M, presumably because San Francisco wants small businesses. There are many so this is also pandering for their votes and those of short-sighted, envious citizens by suggesting E will only tax the rich.
But medium and large companies represent huge economic activity and employment here. Yet E wants to progressively tax receipts so larger companies pay ever higher percentages. By this City Hall effectively says it doesn’t want successful companies to grow and stay.
If passed, there will be threats of and actual defections to more tax-friendly jurisdictions along with usual back room negotiations where exemptions are created for the large, politically-connected and powerful. When E is unsuccessful at solving San Francisco’s budget problems and these taxes are raised again, weaker, smaller companies who can’t leave or play the game will be left to pay the bills. Anyone thinking E will actually chase “the rich and powerful” needs to wake up and smell the coffee.
The payroll tax, while problematic, was at least a flat tax. But E says it “provides an unstable revenue stream.” City Hall and its minions, who consistently gorge themselves on citizens’ productivity, might be surprised at how unstable revenues can be with considerably fewer suckers sticking around to be fleeced. Vote NO on E.