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article imageHomeless tax in San Francisco could end up backfiring

By Karen Graham     Nov 8, 2018 in Politics
San Francisco - On Tuesday, voters in San Francisco passed Proposition C, a new corporate tax that will raise $400 million a year from the city’s largest companies and direct that money toward homeless services.
Human waste, dirty needles, and petty crime have become rampant in San Francisco, the city by the bay in California, so much so that residents passed Proposition C Gross Receipts Tax for Homelessness Services with 60 percent of the vote on Tuesday.
The homeless tax is designed to force large corporations to ante up more funding, in the way of a tax on the company's profits to help the city deal with the problem of homelessness. This was a local issue, but it did garner national attention when its most vocal billionaire supporter, Marc Benioff, founder and co-chief executive officer of Salesforce, argued in favor of the tax on social media.
It brings to mind the homeless tax the Seattle city council passed in May of this year. It was supposed to raise $48 million a year specifically earmarked for the homeless. But Amazon, headed by Jeff Bezos put so much pressure on City Council the tax was repealed a month later, according to Forbes.
File photo: Homeless and cold.
File photo: Homeless and cold.
Ed Yourdon via Wikimedia (CC BY-SA 2.0)
So when Salesforce founder Benioff came out in favor of the homeless tax in San Francisco, he caught the ire of a number of tech titans, including Jack Dorsey, CEO of Square and Twitter. Dorsey and others in large tech corporations don't think Proposition C was the right way to go about tackling homelessness.
Who will ultimately pay the tax?
San Francisco has a complicated tax code that will unfairly create a situation where smaller companies will end up paying more in taxes than large corporations. In Seattle - where Amazon employs 45,000 residents - City Council faced an impossible choice. The city had to risk raising taxes on employers, possibly driving businesses away, or continue to raise taxes on voters.
"Salesforce, the largest employer in San Francisco, would pay around $10 million per year, according to estimates, while Dorsey's Square, which is one-third the size of Salesforce, would pay more," reports NBC News.
Homeless veteran Joseph Shokrian speaks to AFP on a streetcorner near Skid Row in downtown Los Angel...
Homeless veteran Joseph Shokrian speaks to AFP on a streetcorner near Skid Row in downtown Los Angeles
“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 Oct. 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.”
Those corporations who opposed Proposition C say that higher taxes won't solve San Francisco's homelessness problem. As for Jeff Bezos - while he loves making money - he hates paying taxes. Even San Francisco's Mayor, London Breed was opposed to Proposition C.
Breed, who ran on a platform to end homelessness in the city said in a statement, "Funding for homeless services has increased dramatically in recent years with no discernible improvement in conditions. Before we double the tax bill overnight, San Franciscans deserve accountability for the money they are already paying.”
"Despite our progress  Los Angeles is facing a historic housing shortage  a staggering mental h...
"Despite our progress, Los Angeles is facing a historic housing shortage, a staggering mental health crisis and veterans are becoming homeless every day," Los Angeles Mayor Eric Garcetti says
Frederic J. Brown, AFP/File
How bad is the homeless problem in California?
Of the 10 urban areas in the nation with an acute homeless population - California has the top four: (Los Angeles City & County with an estimated 43,854 homeless; San Diego City and County, 8,669; San Francisco, 6,996; and San Jose/Santa Clara City & County, 6,524).
In 2016, the Department of Housing and Urban Development (HUD) put California's homeless population at 97,660. HUD estimated homelessness in Texas to be 15,959 that year. To look at the figures in another way, while California’s 39.5 million population is 39.6 percent larger than Texas’ 28.3 million, its homeless population is 512 percent larger.
There are a lot of reasons for the homelessness crisis in San Francisco and other cities in the state. Officials should be looking closely at the many factors that have added to the problem, like soaring rents, a lack of housing that is affordable, tax codes that are seemingly unfair and most importantly, the duplication of services in the public sector that exacerbate the problem, rather than help it.
More about homeless tax, Businesses, big corporations, San Francisco, Taxes
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