San Francisco voters pass 'Overpaid Executive Tax'

[ZiprHead]

The new law adds a 0.1 percent tax on companies whose executives earn 100 times more than the average worker.

Trying to address the growing wage gap between chief executives and workers, San Francisco voters overwhelmingly approved what is believed to be the nation’s first tax aimed at combatting pay inequity.

The “Overpaid Executive Tax,” formally known as Proposition L, will charge any company that does business in San Francisco and has a top executive earning over 100 times more than their “typical local worker,” according to the tax’s author, Matt Haney, a member of the city's Board of Supervisors.

Companies with top executives who fall into this category must pay a 0.1 percent surcharge on their annual business taxes. The surcharge increases by 0.1 percent per factor of 100, topping out at 0.6 percent. So top earners making 200 times more than the average worker pay a 0.2 percent tax and so on.

San Francisco voters embraced this tax at a time when CEO compensation is surging. A study published by the Economic Policy Institute found that chief executive compensation rose 14 percent in 2019 to $21.3 million. Chief executives now earn 320 times as much as a typical worker.

 

[Politesse]

I doubt other cities could get away with following suit. But executives already know that high taxes are the cost of doing business in the City.

 

[GenesisNemesis]

0.1% tax? Oh noes! Surely the economy of San Francisco will crumble under this measure! ... /sarcasm

 

[Shadowy Man]

This must be why no one wants to move to SF anymore.

 

[Metaphor]

What on earth does 'do business' mean? Amazon and Netflix have customers in San Francisco, are they going to be subject to this tax? Or is it based on where your head office is?

Also, from an Australian perspective, I'm really struggling to understand how a U.S. city can legislate and collect taxes on corporations. Wouldn't that be a state or federal thing only, surely?

 

[Derec]

This must be why no one wants to move to SF anymore.

That and shit on the streets.

 

[Politesse]

This must be why no one wants to move to SF anymore.

Is this a joke? We have one of the most desirable markets on the planet.

 

[Loren Pechtel]

Actual result: Outsourcing will increase, harming the average worker.

 

[Politesse]

Actual result: Outsourcing will increase, harming the average worker.

Oh, spilled milk and exaggeration. The company isn't going to reorganize its entire structure to save their CEO a few thousand bucks on his tax return.

 

[Shadowy Man]

This must be why no one wants to move to SF anymore.

Is this a joke? We have one of the most desirable markets on the planet.

Almost all of my posts are sarcastic quips.

 

[Politesse]

This must be why no one wants to move to SF anymore.

Is this a joke? We have one of the most desirable markets on the planet.

Almost all of my posts are sarcastic quips.

Ah. Sarcasm. I too am hip with the fly kids in da hood.

 

[prideandfall]

Actual result: Outsourcing will increase, harming the average worker.

could be... which is why this should be a federal law that applies to all companies operating in the US whatsoever.

 

[ZiprHead]

Actual result: Outsourcing will increase, harming the average worker.

could be... which is why this should be a federal law that applies to all companies operating in the US whatsoever.

I predict it will do nothing for workers and put a little more coin in the city's bank account.

 

[prideandfall]

Actual result: Outsourcing will increase, harming the average worker.

could be... which is why this should be a federal law that applies to all companies operating in the US whatsoever.

I predict it will do nothing for workers and put a little more coin in the city's bank account.

yes well, this is what happens when you try to put a single medium sized band-aid on a gushing arterial wound.

 

[laughing dog]

Actual result: Outsourcing will increase, harming the average worker.

WHen outsourcing increases, it has no effect on the "average" worker, since workers in the "exporting" area lose but workers in the "importing" region gain.

I strongly suspect in this instance, most companies will quickly find ways to compensate their executives without invoking the legal tripwire.

 

[Loren Pechtel]

Actual result: Outsourcing will increase, harming the average worker.

WHen outsourcing increases, it has no effect on the "average" worker, since workers in the "exporting" area lose but workers in the "importing" region gain.

I strongly suspect in this instance, most companies will quickly find ways to compensate their executives without invoking the legal tripwire.

I'm not talking about offshoring, just hiring out low wage functions. Hire a janitorial company rather than hire janitors.

The thing is you end up with a lot of small companies in the business and business relationships with such companies don't have the protections workers normally have. The janitor at BigCorp is generally better off than the janitor at TwoBitJanitors that's hired to clean BigCorp's buildings.

 

[laughing dog]

Actual result: Outsourcing will increase, harming the average worker.

WHen outsourcing increases, it has no effect on the "average" worker, since workers in the "exporting" area lose but workers in the "importing" region gain.

I strongly suspect in this instance, most companies will quickly find ways to compensate their executives without invoking the legal tripwire.

I'm not talking about offshoring, just hiring out low wage functions. Hire a janitorial company rather than hire janitors.

The thing is you end up with a lot of small companies in the business and business relationships with such companies don't have the protections workers normally have. The janitor at BigCorp is generally better off than the janitor at TwoBitJanitors that's hired to clean BigCorp's buildings.

How is this related to the OP topic of San Francisco taxing "overpaid executives"?

 

[Shadowy Man]

Actual result: Outsourcing will increase, harming the average worker.

WHen outsourcing increases, it has no effect on the "average" worker, since workers in the "exporting" area lose but workers in the "importing" region gain.

I strongly suspect in this instance, most companies will quickly find ways to compensate their executives without invoking the legal tripwire.

I'm not talking about offshoring, just hiring out low wage functions. Hire a janitorial company rather than hire janitors.

The thing is you end up with a lot of small companies in the business and business relationships with such companies don't have the protections workers normally have. The janitor at BigCorp is generally better off than the janitor at TwoBitJanitors that's hired to clean BigCorp's buildings.

With prop 22 passing maybe janitorial work will become part of the gig economy and janitors won’t get any protections.

 

[Derec]

How is this related to the OP topic of San Francisco taxing "overpaid executives"?

The "overpaid" is defined as 100x the median salary. If you outsource low-wage employees, you instantly raise your median wage.

 

[fromderinside]

Good thinking. Now you're getting it. We just continue up the chain until we outsource Board members. Somebody will be getting really rich until there are two of them then one will outsource the other.

Do I hear "Git a gun"?