

SF Approves Twitter Tax Break Deal - rsuttongee
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/04/05/BA7R1IQM9D.DTL&type=printable

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ajays
IMHO, this entire 1.5% payroll tax should go. And while we're at it, lets
bring the property tax below 1%. And sales tax should go back to the 8% that
it used to be.

Yesterday I got an email from SEIU (the government employees union), asking me
to write in opposing this deal. It turns out there are over 14,000 city
employees in the City + County of SF. For a population of under 800,000 . Wow.
And in last years election, they were pushing hard for a ballot initiative
that would have slapped an additional tax on hotel rooms.

There is just too much bureaucracy in this city. As revenues have gone up, the
bureaucracy has ballooned. The City's annual budget is $6 Billion; and yet
they can't find the $300K to support the SF Botanical Garden? In the meantime,
personnel costs keep skyrocketing. Politicians keep hiring their cronies. For
example: a local politician served before there was a law providing for
healthcare benefits upon retirement for politicians. So he was hired for a
month on the City payroll; his previous service counted, and voila! Now he has
subsidized healthcare for the rest of his life. Lucrative Parking Garage
management contracts are awarded at below market rates to cronies, who make a
tidy profit.

Abuse is rampant all across San Francisco. The only way to stop is to stop the
flow of funds that enables such abuse.

[edit: I had written 34,000 earlier; corrected it to 14,000 _City_ employees]

~~~
Duff
Try living in Upstate NY. My school taxes were $2,500 in 2007. With no change
in property assessment, they are up to $3,400 this year. And we just found out
that the local library wants to jack their portion of the tax by over 25%.

This place was a boomtown in the 1960's. Today, the booming business is in
demolishing abandoned buildings.

~~~
ajays
In San Francisco, a 2-BR condo goes for around $800K. At a 1.16% property tax
rate, you'll be paying $9000/year in property taxes. How's that for a tax
rate?

~~~
Duff
In my city, a 3 BR home assessed at $175k goes gets hit for $3100 school and
$2100 city/county taxes. A little less than 3x more.

That said I'm not claiming that San Francisco is a cheap place to live, but
I'm assuming, that like NYC, living there comes with other opportunities that
may balance the costs somewhat.

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Aloisius
Actually, San Francisco got it right.

Instead of giving Twitter a tax break, they're giving anyone who moves into
mid-market or the Tenderloin a tax break. Mid-market has been a blight for
decades and plans to revitalize the area have never panned out. The Tenderloin
(especially lower Tenderloin), isn't any better.

I think this is a great alternative to the city dumping money into the area.
It'll create a powerful incentive to move there regardless of the blight and
the effect of a few thousand engineers moving into that area will be dramatic.

I just wish it was for more than 6 years since I think it'll take longer than
that to revitalize the neighborhood.

------
uuilly
Bureaucrats and politicians who make ad-hoc decisions like this do a lot of
indirect damage to companies. What they have effectively done is raised
uncertainty for businesses in SF. Will we get a break? Will our competition?
Etc, etc. Uncertainty adds to risk and risk adds to costs.

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orijing
Apologies in advance for sounding so pessimistic, but this is just another
example of _beggar-thy-neighbor_ tax/tax-break policies that limit government
revenue potential.

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OstiaAntica
This is outrageous and, in my opinion, is unconstitutional. Americans and
American businesses are entitled to equal protection under the law, and
handing out customized tax breaks to a couple neighborhoods in order to
benefit a specific company is shameful and corrupt.

~~~
jessedhillon
First off, the payroll tax applies only to companies with payrolls > $250k;
does your demand for 'equal protection' mean that you insist on companies of
all sizes paying this tax?

Second, the tax break is not Twitter-specific (although even if it were, that
would not be unconstitutional). It applies to businesses located in a certain
part of SF, and it exempts a company from the first six years of payroll
taxes.

Third, city supervisors have the authority to adjust tax structures with a
level of geographic-granularity. Why shouldn't they be allowed to make a dumpy
part of town more attractive to businesses?

Do you complain when cities and states make themselves more attractive to
outside businesses by giving exemptions to certain classes of companies? Do
you complain when cities block big-box stores like Walmart from opening in
their limits? (Since those are as targeted as this exemption.)

~~~
hugh3
_Do you complain when cities and states make themselves more attractive to
outside businesses by giving exemptions to certain classes of companies? Do
you complain when cities block big-box stores like Walmart from opening in
their limits? (Since those are as targeted as this exemption.)_

Personally, yes, I complain about both of these.

As for this specific deal... I'm not too concerned about it, but I think it's
the kind of special deal that cities shouldn't be allowed to make. There's
just too much potential for corruption when city hall can say "OK, businesses
inside this particular neighbourhood don't have to pay taxes". (Gee, Mr Mayor,
I've been so good to you with campaign donations over the years, how about you
declare _my_ block to be dumpy too?)

