San Francisco, California has long grappled with its homelessness problem. Just recently, it was reported that city officials in San Francisco are planning to slap taxes on tech companies to help curb its homelessness problem.
The proposal, called the Homeless and Housing Impact Technology Tax, would require tech giants to pay a 1.5 percent payroll tax. It aims to use the taxes on building programs for the city's homeless people and to help solve San Francisco's affordable housing market problems, The New York Times reported.
Eric Mar, one of San Francisco's Board of Supervisors, said tech companies in the city aren't "paying their fair share," the news outlet added. If implemented, the tax hike would raise about $140 million annually that would balance the city's $9.6 billion budget.
"The surge in housing demand brought on by the rapid growth of tech sector and its highly paid workforce makes it increasingly difficult for working people to remain in their homes in San Francisco, live near where they work, and contribute to our city," Mar said in an email quoted by CNET.
Mar believes that the proposal will better encourage small businesses' operation. The tax plan would also implement cheaper registration fees for small businesses that have gross receipts of $1 million or lower.
Most Expensive City
San Francisco has surpassed New York in recent years when it comes to rental markets, earning the status as the United States' most expensive city. One-bedroom rental houses in San Francisco cost about $3,510 per month, Curbed noted.
Around 6,700 homeless people are on San Francisco's streets, with the city's overall population reaching approximately 865,000 according to the San Francisco Chronicle. On Wednesday, June 29, the San Francisco Chronicle and around 80 other news organizations teamed up to reduce or end the city's homelessness problem and improve homeless people's quality of life.
Who Will Be Affected
San Francisco's proposed tax hike will affect big companies like Twitter, Uber, and customer service firm Zendesk, Business Insider reported. Twitter, along with five other tech companies, was previously granted with a tax break, which exempts the tech giant from paying payroll taxes and stock options as long as its headquarters is situated in the city.
That tax break deal made the involved companies save $34 million in payroll tax in 2014. San Francisco Mayor Ed Lee said the tax break helped developed the city's rougher Mid-Market and Tenderloin neighborhoods.
The proposal is facing a tough fight to gain approval. For the proposal to be implemented, six out of 11 Board of Supervisors members and two-thirds of voters should support the measure.
