The 1.5% stock-based compensation payroll tax has been shelved for this year, but Supervisor Mar is talking like he intends to revive it for 2020.
Our collective freakout over the San Francisco IPO boom that was supposed to be happening right now has not been justified; these IPOs’ performance has been kind of a mixed bag. Slack stock debuted like gangbusters but has dipped since, while Uber’s IPO sputtered before modestly recovering. With the expected tech trillions not trickling in, City Hall seems to be recalibrating its own strategy to get a piece of that action (whenever it arrives). Most significantly, the San Francisco Examiner reports that Sup. Eric Mar is yanking his “IPO tax” measure from this November’s election ballot, and hopes to reintroduce his Stock Compensation Tax for the 2020 election instead.
“The Stock Compensation Tax is an important tool for addressing economic inequality,” Mar told the Examiner. “By moving it to the November 2020 ballot we gain the time we need to work with community and labor leaders to connect, coordinate, and present comprehensive solutions for the issue of economic inequality — the Stock Compensation Tax is one part of this broader strategy.”
What Mar does not acknowledge there is that his 2020 effort would face a much lower threshold. The San Francisco Business Times explains that Mar’s just-abandoned IPO tax measure would have needed a two-thirds supermajority to pass, because the earmarked funds are for specific programs like housing. The same bill he intends to reintroduce next year would instead direct the revenue toward the city’s general fund, and therefore only needs a simple 50% majority from San Francisco voters.
But as the Chronicle points out, Mar’s move potentially leaves a great deal of money on the table. By not passing the measure this year, they’re missing out on whatever IPO revenue could have been taxed in 2019. Mar is essentially trading the possibility of a few million bucks this year for a next-year measure that would be logistically much easier to pass.
“We will be losing some of the near term revenue in making this move,” Mar’s legislative aide Edward Wright told the Chronicle. “But alongside the urgency of the IPOs that are happening now, we are focused on the urgency in the overall crisis of our city's economic inequality.”
The ballot deadline is next Friday, July 26, and other measures in the works are also being yanked. Sups. Ronen and Haney will shelve their proposed Excessive CEO Salary Tax that was also slated for this November, but say they’ll reintroduce it a Breed-backed “unity measure” next year. The $600 million affordable housing bond, paid for by additional taxes on rideshare companies like Uber and Lyft, is still scheduled for the Nov. 5 ballot.
Photo: Arch_Sam via Flickr