SF Tax Schemes Could Hurt In The long Run

Dear All;

This article says what no one has been willing to say to the progressive supervisors about their tax plan schemes - in the long run they will cost SF jobs and business. As always the unintended consequences of not doing what you should do and doing what you want politically forces tax payers and businesses to pay the piper.

BTW: The special election for the tax scheme is still up in the air and the types of taxes are still up in the air.

Ron Getty - SF Libertarian
Hostis res Publica
Morte ai Tiranni
Dum Spiro, Pugno

http://www.sfexaminer.com/local/Tax-increase-plans-could-hurt-in-the-long-run-39477417.html

http://snipurl.com/brtup [www_sfexaminer_com]

Tax-increase plans could hurt in the long run
Examiner Staff Writer 2/12/09Tax-hike proposals for a possible special election this summer could stimulate the local economy at first but cost jobs and impair business growth in the long run, according to a new City Controller’s Office report.
The report comes as the Board of Supervisors is considering holding a June 2 special election to bring before voters tax-increase proposals to boost city revenues.
Supporters of the election say San Francisco should turn to tax increases to soften the blow of the deep budget cuts that need to be made to balance The City’s projected budget shortfall of $460 million for the fiscal year that begins July 1.
“The conclusion from our analysis is that the short-term economic impact of raising the taxes is not negative. The long-term impact is negative,” Ted Egan, the Controller’s Office chief economist, said during Wednesday’s Board of Supervisors Budget and Finance Committee hearing.
The board is looking at three tax-hike proposals: a sales-tax increase from 8.5 to 9 percent, a 0.1 percent tax on big businesses’ gross receipts and a 1.395 percent gross-receipts tax on commercial real estate rental income.
The three proposed taxes were introduced by District 11 Supervisor John Avalos.
Egan warned that the sales-tax hike would “encourage San Francisco residents, tourists and residents of other areas of the Bay Area to shop outside of The City, to shop online or in some cases to consume less.”
Egan said it would lead to “slower growth in the affected sectors, such as retail trade” and result in the loss of hundreds of jobs annually.
The sales tax proposal, which would generate about $51 million annually for The City, would expire in 2012.
The gross-receipts tax on large businesses would generate $38 million annually and provide a short-term stimulus, but would ultimately discourage businesses from locating to The City, Egan said.
The tax on commercial rental income has the largest short-term stimulus effect on the local economy, compared with the other proposed taxes, Egan said, and it would generate $34 million a year. However, Egan said, the tax increase would result in rental increases and a job-growth slowdown over time.
The full Board of Supervisors is scheduled to meet Tuesday and possibly vote on the proposed tax measures.
jsabatini@sfexaminer.com