Name: SF proposal to tax companies with high-paid execs heads to November ballot
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SF proposal to tax companies with high-paid execs heads to November ballot

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San Francisco Supervisor Matt Haney will announce Tuesday that a long-discussed proposal to tax companies where top executives earn vastly more money than the rest of their workforce is headed for the November ballot.The measure, which Haney has dubbed the “overpaid executive tax,” would bring in between $60 million and $140 million annually by taxing businesses that pay the highest-earning person in the company 100 times or more the median salary of its San Francisco workers, starting in 2022.The concept was previously envisioned as a funding mechanism for Mental Health SF, a sweeping plan to overhaul the city’s fractured mental health care system championed by Haney and Supervisor Hillary Ronen. was quietly introduced last Tuesday.But since the onset of the COVID-19 pandemic, Haney said, should the measure pass with a simple-majority vote, he intends to lobby for the money to be used to ensure that the city’s broader health system can endure looming budget cuts — particularly any that might threaten the jobs of frontline health care workers.“These are the same people who just saved our lives and who are going to continue to need to protect the health of San Franciscans,” Haney said. “The pandemic is not over. We’re going to continue to make sure our hospitals are well-staffed and prepared.”More for youHaney said he was “terrified” at the thought of what health department layoffs might mean for the city’s ongoing emergency response “and also to the larger health and mental health challenges we have as a city.” The measure has so far been co-sponsored by Ronen and Supervisors Shamann Walton, Gordon Mar and Dean Preston. The four co-sponsors guarantees the measure will reach the ballot.Mayor London Breed ordered departments that rely on the city’s roughly $6 billion general fund to present budget proposals envisioning a 10% cut in the next fiscal year to contend with an economic collapse catalyzed by the pandemic. The mayor does not have to accept those proposals, however. Health department staff Tuesday, which “does not reduce services or result in layoffs” through the 2021-22 fiscal year.The measure, which would tax a company’s gross receipts — a measure of a company’s revenue — is also an instrument for addressing San Francisco’s wealth gap, Haney said — one that is painfully acute in a city where a wildly successful business sector is juxtaposed against stark income inequality and a growing homelessness crisis.Companies subject to the tax would have to pay 0.1% of their gross receipts earned in San Francisco to the city if their highest-paid employee makes 100 times the median salary of the company’s San Francisco-based workforce. The figure goes up to 0.2% for executives making 200 times the company’s median salary for local workers, and upward to 1% of gross receipts when top brass makes 1,000 times the median.Businesses must earn at least $1.17 million in gross receipts annually to qualify for the tax, which Haney said will exempt most small businesses, as the city defines them.The measure also includes “wages, salaries, commissions, bonuses, property issued or transferred in exchange for the performance of services (including but not limited to stock options)” in its definition of “compensation.” That may include some tech companies with top executives who supplement nominally small salaries with generous stock-based pay packages. Many companies with high across-the-board salaries — reducing the ratio of top earners to median earners — would be exempt from the tax, including many tech companies.by The Chronicle of companies that would likely be affected by the tax included Comcast, Bank of America, JP Morgan, Chipotle, Visa, Salesforce, Wells Fargo and Gap.The tax would shunt money to the city’s general fund. As such, it cannot be earmarked as a ballot measure for any specific purpose — doing so would require a two-thirds supermajority vote to pass. But Haney said he intends to wield every tool he has as a legislator to ensure the money is set aside to avoid cuts or layoffs for health care workers.Updated to include drought zones while tracking water shortage status of your area, plus reservoir levels and a list of restrictions for the Bay Area’s largest water districts.Haney’s measure also comes amid still-congealing plans by Breed and the Board of Supervisors to recast San Francisco’s system of business taxes. Both sides are expected to spend the coming weeks negotiating over just how high to raise taxes and how quickly, considering the pandemic. But Haney said he did not expect the executive tax to become a bargaining chip as part of broader reforms.“Regardless of the outcome of other reforms, we need the revenue to save health care jobs and fight inequality,” he said. “This measure does both so I don’t view it as contingent on the outcome of other negotiations.”Despite the broad, calamitous economic effects of the pandemic, Haney said well-off companies will be hard pressed to argue they can’t afford to pay the extra tax while their top brass enjoy high salaries.“We’re only taxing companies that have enough to pay their executives millions of dollars. They can pay their executives less, or pay their workers more and they won’t need to pay this tax,” Haney said.That will also likely be a salve to some of the city’s labor unions, which are expected to resist any calls for layoffs among city-government workforces they represent. Haney said the measure has already been endorsed by the San Francisco Labor Council, SEIU Local 1021 and other unions.Dominic Fracassa is a San Francisco Chronicle staff writer. Email: Twitter:Updated to include drought zones while tracking water shortage status of your area, plus reservoir levels and a list of restrictions for the Bay Area’s largest water districts.

San Francisco Supervisor Matt Haney will announce Tuesday that a long-discussed proposal to tax companies where top executives earn vastly more money than the rest of their workforce is headed for the November ballot.The measure, which Haney has dubbed the “overpaid executive tax,” would bring in between $60 million and $140 million annually by taxing businesses that pay the highest-earning person in the company 100 times or more the median salary of its San Francisco workers, starting in 2022.The concept was previously envisioned as a funding mechanism for Mental Health SF, a sweeping plan...

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Dominic Fracassa

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SF proposal to tax companies with high-paid execs heads to November ballot

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