San Francisco has a well-earned reputation as the most liberal city in the United States, but a proposed corporate tax to help the homeless is dividing some of the city’s tech billionaires.
On Tuesday, San Franciscans will vote on Proposition C, which would be the biggest tax increase in San Francisco history if passed, raising as much as $300 million per year from the city’s largest corporations. Those funds would then be used to help address the city’s housing crisis and provide aid for the estimated 7,000 homeless people living on the streets of San Francisco.
The proposition gained national attention after its most vocal billionaire supporter, Marc Benioff, the Salesforce founder and co-chief executive officer, began to spar on social media with other tech titans, including Jack Dorsey, chief executive officer of Square and Twitter.
Benioff, who helms San Francisco’s largest employer and already has his name on a hospital in the city, has donated more than $7.8 million in personal and corporate money to the campaign to pass the proposition. He also tweeted about it and even set up a phone bank for volunteers in the newly opened Salesforce Tower.
“San Francisco has never had a homeless crisis as big as this and it’s getting worse,” Benioff recently tweeted.
In another, he wrote: “Unfortunately, some C.E.O.s still are myopic & believe that they have a fiduciary duty to shareholders alone, with little or no responsibility to the communities in which they do business.”
If Proposition C passes, companies with more than $50 million in gross annual receipts will be taxed on any gross annual receipt revenue in San Francisco. The city already has a gross receipts tax, which is usually calculated by taking a company's global revenue and multiplying it by an "apportionment percentage," which is based on their business category. Depending on their category, businesses could pay an additional tax between .175 percent to .69 percent.
Salesforce, the largest employer in San Francisco, would pay around $10 million per year, according to estimates, while Square, a financial services company one-third the size of Salesforce, would pay more.
That’s just the beginning of the problem with Proposition C, according to other billionaires, who have sparred with Benioff on Twitter about it over the past few weeks.
Dorsey personally donated $125,000 to oppose Proposition C, according to the San Francisco Ethics Commission disclosures posted online. Stripe, a payments processor, donated $419,999 to defeat Proposition C, according to online records. Lyft dropped $100,000 to oppose it. Mark Pincus, the billionaire founder of Zynga, a mobile gaming company, has also been vocal about voting no.
Twitter has not taken a public stance on the issue. However, Dorsey shared his thoughts on the platform, speaking of the “unfairness” in the proposition.
“We’re happy to pay our taxes. We just want to be treated fairly with respect to our peer companies, many of whom are 2-10x larger than us,” Dorsey wrote on October 19. “Otherwise we don’t know how to practically grow in the city. That’s heartbreaking for us as we love SF and want to continue to help build it.”
Patrick Collison, co-founder and CEO of Stripe, said voting on Proposition C isn’t a matter of “being for the homeless or against them.”
“While well-intentioned, it is San Francisco’s largest-ever tax increase, and comes with no systemic changes or effective accountability,” he said in a statement.
Even San Francisco’s new mayor, London Breed, opposed the proposition.
Breed ran on a platform of solving the homeless crisis but said she does not support Proposition C because the city already needs to audit the more than $300 million it is spending on homelessness.
Funding has “increased dramatically in recent years with no discernible improvement in conditions,” she said in a statement. “Before we double the tax bill overnight, San Franciscans deserve accountability for the money they are already paying.”
Breed also cited a report from the city economist’s office, which estimated that Proposition C would shave $240 million off of San Francisco’s gross domestic product every year and potentially risk companies leave San Francisco, taking their headquarters and jobs to other cities.
“San Francisco can’t solve homelessness simply by writing even-larger checks to itself,” she said.