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San Francisco, California, Proposition L, Business Tax (November 2020)
| San Francisco Proposition L | |
|---|---|
 | |
| Election date November 3, 2020 | |
| Topic Local business tax and City tax | |
Status Approved | |
| Type Referral | Origin Lawmakers |
San Francisco Proposition L was on the ballot as a referral in San Francisco on November 3, 2020. It was approved.
A “yes” vote supported authorizing an additional tax of 0.1%-0.6% of gross receipts or 0.4%-2.4% of payroll expenses for businesses in which the highest-paid managerial employee earns more than 100 times the median compensation of employees, generating an estimated $60-140 million per year. |
A “no” vote opposed authorizing an additional tax of 0.1%-0.6% of gross receipts or 0.4%-2.4% of payroll expenses for businesses in which the highest-paid managerial employee earns more than 100 times the median compensation of employees, generating an estimated $60-140 million per year. |
A simple majority was required for the approval of Proposition L.
Election results
|
San Francisco Proposition L |
||||
|---|---|---|---|---|
| Result | Votes | Percentage | ||
|
|
268,370 | 65.06% | ||
| No | 144,097 | 34.94% | ||
Text of measure
Ballot question
The ballot question was as follows:[1]
| “ | Shall the City place an additional tax permanently on some businesses in San Francisco when their highest-paid managerial employee earns more than 100 times the median compensation paid to their employees in San Francisco, where the additional tax rate would be between 0.1%-0.6% of gross receipts or between 0.4%-2.4% of payroll expense for those businesses in San Francisco, for an estimated revenue of between $60-140 million a year?[2] | ” |
Ballot simplification digest
The following summary of the measure was prepared by the office of the Ballot Simplification Committee:
| “ | The Way It Is Now: The City collects a tax on gross receipts (Gross Receipts Tax) from some businesses in San Francisco at a rate from 0.16% to 0.65% annually.
Businesses with more than $1 billion in gross receipts, 1,000 employees nationwide and administrative offices in San Francisco pay an administrative office tax (Administrative Office Tax) based on their payroll expense instead of their gross receipts. This tax rate is 1.4% of their payroll expense. State law limits the amount of revenue, including tax revenue, the City can spend each year. State law authorizes San Francisco voters to approve increases to this limit to last for four years. The Proposal: Proposition L would place an additional tax on some businesses in San Francisco when their highest-paid managerial employee (Top Executive Pay) earns more than 100 times the median compensation paid to their employees in San Francisco (Employee Pay). • For a business that pays the Gross Receipts Tax, if its Top Executive Pay is more than 100 times Employee Pay, the business would pay an additional tax from 0.1% to 0.6% of its San Francisco gross receipts. • For a business that pays the Administrative Office Tax, if its Top Executive Pay is more than 100 times Employee Pay, the business would pay an additional tax from 0.4% to 2.4% of its San Francisco payroll expense. Proposition L would also increase the limit on the City’s annual tax revenue spending by the amount of additional taxes collected under the proposed tax. The increased limit would last for four years. A 'YES' Vote Means: If you vote 'yes,' you want to place an additional tax on some businesses in San Francisco when their highest-paid managerial employee earns more than 100 times the median compensation paid to their employees in the City. A 'NO' Vote Means: If you vote 'no,' you do not want to make this change.[2] |
” |
Full text
The full text of the measure is available here.
Support
Supporters
- San Francisco Democratic Party[1]
- San Francisco Labor Council[1]
- Assemblymember Phil Ting (D)[1]
- Assemblymember David Chiu (D)[1]
- State Senator Scott Wiener (D)[1]
- San Francisco Democratic Party Chair David Campos[1]
- San Francisco Board of Supervisors[1]
- District Attorney Chesa Boudin[1]
- Public Defender Mano Raju[1]
- Board of Education President Mark Sanchez[1]
- City College Board of Trustees President Shanell Williams[1]
- Former State Senator Mark Leno (Nonpartisan)[1]
- Former Assemblymember Tom Ammiano[1]
Arguments
- Supervisor Matt Haney, the sponsor of the proposition, said, "It’s a very simple, straightforward tax measure. Big companies that can afford to pay multimillion-dollar salaries every year can afford to pay more taxes."[3]
Official arguments
The official arguments in support of Proposition L were authored by San Francisco Democratic Party, San Francisco Labor Council, Assemblymember Phil Ting (D), Assemblymember David Chiu (D), State Senator Scott Wiener (D), San Francisco Democratic Party Chair David Campos, the San Francisco Board of Supervisors, District Attorney Chesa Boudin, Public Defender Mano Raju, San Francisco Board of Education President Mark Sanchez, City College Board of Trustees President Shanell Williams, Former State Senator Mark Leno, and Former Assemblymember Tom Ammiano:[1]
| “ | CITY LEADERS AGREE ON THE OVERPAID EXECUTIVE TAX
The Pandemic isn't over. Cities around the country are preparing for another spike in the curve by stocking up on medical equipment and hiring nurses, doctors, first responders, and other essential healthcare workers. San Francisco needs to be ready. Prop L is expected to raise over $140 million every year which would allow the City to hire hundreds of nurses, doctors, and first responders. The tax is simple. If the measure passes, any large corporation that pays their top executive 100 times more than their average worker will have a 0.1% surcharge added to their annual business tax payment. The more inequity between the top executive and their workers, the higher the surcharge. Corporations can avoid the tax by simply paying their executives less or by raising their employees' wages. We believe that big corporations that can afford to pay their executives million-dollar salaries every year can afford to pay their fair share in taxes to help us recover. Over the last 30 years, executive salaries in the United States have skyrocketed by 940%. But regular workers' salaries have grown by just 11%. Prop L incentivizes companies to invest in their workers, not just their executives. Prop L is a consensus measure with broad base support. Please join us in voting for Prop L. [2] |
” |
Opposition
Opponents
Arguments
- Jay Chang, public policy director of the Chamber of Commerce, said, "When we look at the November ballot, what is concerning is that we have all three tax measures piled up on top of each other. The concern is that all three together is what is going to push the economy off the cliff."[3]
Official arguments
The official arguments in opposition to Proposition L were authored by Richie Greenberg:[1]
| “ | Simply put, it is abundantly clear the author of this misguided ballot measure has no education nor practical experience with regards to economics and statistics.
The damage to our city's business infrastructure is already being hit hard by the current pandemic, and this proposition would serve no meaningful purpose. Employees' salaries are based on experience and on value to a company. By enacting such a bizarre hocus-pocus tax on executive salaries as Proposition L seeks to impose, the incentive for hiring new entry-level employees (or retraining current employees due to Covid-19 changes in business) would diminish. In other words, companies would reduce or stop hiring low-level employees as an answer to this measure, if it should pass. Moreover, such a tax would most likely prevent the attraction of new businesses to relocate to San Francisco, at such a time as we are seeing unprecedented economic downturn due to the pandemic. Bear in mind, the sentiment of many of City Hall leaders is that the technology sector has created economic imbalances- yet these same leaders ignore the fact that state of the art advanced medical research facilities and the financial services sectors have a large impact and employee base in the city. An unhealthy obsession with social media and information technology, which city hall leaders suffer from, is blinding them to the reality behind the salary structures. San Francisco is much more than simply social media tech. Join me in opposing this misguided and bizarre proposition, and send a message to city hall to support our businesses, not chase them away. Vote NO on Prop L.[2] |
” |
Media editorials
- See also: 2020 ballot measure media endorsements
Ballotpedia identified the following media editorial boards as taking positions on the ballot measure. If you are aware of a media editorial board position that is not listed below, please email the editorial link to editor@ballotpedia.org.
Support
- San Francisco Bay Guardian: “Another smart move, by Sup Matt Haney, would address, a modest way, income inequality, Prop. L would increase city business taxes on any company that pays its CEO more than 100 times what its lowest-paid worker makes. If it passes, not only will it bring in revenue, it could start a national trend that could lead to higher worker pay or lower CEO compensation – both excellent ideas. Vote Yes."[5]
- Bay Area Reporter: "This would create an additional tax that would generally apply to all companies conducting business in the city for which the compensation of the business' highest-paid managerial employee compared to the median compensation paid to the business' employees based in the city exceeds 100:1. Known as the overpaid executive tax, it's expected to raise $140 million a year, which would allow the city to hire hundreds of nurses, doctors, and first responders. Corporations can avoid the tax by paying their executive less or raising their employees' wages. Vote YES on Prop L."[6]
Opposition
- San Francisco Chronicle: “The levy, bound to produce lawyerly end runs, isn’t a major money maker for city by bringing in revenue from the Elon Musks and Mark Zuckerbergs of the world. It’s also unlikely to do anything to raise rank-and-file wages. It’s yet another anti-business jab bound to dissuade firms from staying or moving here. It’s a zany dose of populism being hawked by Supervisor Matt Haney. Vote No.”[7]
Path to the ballot
This measure was put on the ballot through a unanimous vote of the San Francisco Board of Supervisors on July 28, 2020.[1]
See also
External links
Footnotes
- ↑ 1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 San Francisco Elections Office, "Qualified Local and District Measures," accessed October 12, 2020
- ↑ 2.0 2.1 2.2 2.3 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ 3.0 3.1 San Francisco Chronicle, "SF tax on companies with highly compensated CEO’s goes to ballot in November," July 28, 2020
- ↑ California Choices, "San Francisco Ballot Endorsements," accessed October 20, 2020
- ↑ San Francisco Bay Guardian, "Endorsements Fall 2020," October 1, 2020
- ↑ Bay Area Reporter, "Editorial: Vote yes on all SF props," September 23, 2020
- ↑ San Francisco Chronicle, “Editorial: San Francisco ballot recommendations cover taxes, housekeeping and social change.,” October 6, 2020
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