San Francisco Forces Large Corporations to Pay "Homeless Tax"

Expect homelessness to rise in San Francisco as a result of the city's passage of a homeless tax.

Proposition C, the largest corporate tax increase in San Francisco history, passed with 59.9 percent of the vote. As a result, San Francisco's Biggest Companies Now Forced to Pay a Homeless Tax.

Companies with more than $50 million in gross annual receipts will now be taxed on any gross annual receipt revenue in San Francisco. The city already has a gross receipts tax, which is usually calculated by taking a company's global revenue and multiplying it by an "apportionment percentage," which is based on their business category.

The tax code is complex and will not hit corporations equally.

Salesforce, the largest employer in San Francisco, would pay around $10 million per year, according to estimates, while Square, which is one-third the size of Salesforce, would pay more.

Homelessness in San Francisco

Image from the San Francisco Chronicle article Situation On the Streets.

The article notes that the overall homeless population in San Francisco has fallen from 8,640 in 2004 to 7,499 in 2017. Yes, but at enormous expense. Since 2004, San Francisco has doubled the money it spends on homelessness, to more than $300 million.

And the result feels worse. Why?

  • Tents:The proliferation of tents all over the city, in places where before there were mostly just blankets and tarp lean-tos, has been perhaps the biggest driver. The Occupy protest movement that flared in 2011 and died out in 2012 infused hundreds of tents onto the streets, and kindhearted residents followed by raising donations to buy even more.
  • Gentrification:As the city’s tech-driven economy exploded, traditional homeless hangouts in places like central SoMa or around the Transbay Terminal were revitalized. Unable to blend in so easily, the homeless migrated elsewhere, causing fresh alarm to those unused to seeing camps.
  • Panhandlers: As many as 50 percent of them, by some estimates, are formerly homeless people who now live inside but are so dysfunctional they revert to the one moneymaking technique they’ve always known. They look homeless, but they’re not.

Sheer Idiocy

The proposal is so stupid that even the mayor London Breed opposed Prop C.

Funding for homeless services has “increased dramatically in recent years with no discernible improvement in conditions,” she said in a statement. “Before we double the tax bill overnight, San Franciscans deserve accountability for the money they are already paying.”

Expect Problems to Rise

If you want more of something, subsidize it. Reported homelessness is down slightly, but tents are up, panhandlers are up, and problems are up.

Throw enough money at the problem and people will move in from all over the county.

San Francisco is begging for more problems, and it will get them.

Prop C is lunacy.

In case you missed it, please consider Under Pressure, Seattle Reverses Idiotic Tax on Corporations to Support Homeless

Mike "Mish" Shedlock

Comments (26)
No. 1-14
Sechel
Sechel

Homeless probably are already attracted to the good weather

Stuki
Stuki

The solution to homelessness, is extremely simple: More homes. In the places people want them. That's it. Hardly rocket science, although if one is meaningfully dumber than even a common housefly, I guess virtually anything may seem like difficult beyond all hope of comprehension..

You rarely hear of a clotheslessness problem amongst the poor in San Francisco. Although clothes, like homes, are simple, manufactured, durable goods. That people have known how to make for centuries. And that improving technology has made infinitely cheaper and simpler to make as years have gone by.

Like any other supposed "-lessness" problem, it is only a problem in severely unfree places. Virtually anything is in short supply in North Korea. Ditto the Soviet Union. While freedom ensures virtually nothing is in short supply at all. Doubly so homes, as they last long enough to remain useful long enough that continuously added supply inevitably render the least desirable ones virtually free. Just like clothing.

SMF
SMF

Assisted in a homeless shelter almost two Xmases ago. Out of 16 in the shelter for the night, 12 or 13 had phones provided by the state.

Had a friend who had just been released from jail. She placed a facebook update how she was homeless for the night because she broke a rule. Assume she had a smartphone, provided by the state.

Quatloo
Quatloo

Really sad. San Francisco could clean up its blighted, unsightly, unsafe areas quickly and easily. All it would have to do is permit development without ridiculous requirements to provide 'affordable housing'. In just weeks, beautiful new buildings would start to be constructed on city streets that today serve as latrines and garbage dumps. In normal cities, the further away from the city center, the cheaper the housing. San Francisco doesn't work that way because the residents want the homeless there. More than ever will surely come as a result of this initiative.

shamrock
shamrock

$300M? How many people does that get off the street? Unclear.

shamrock
shamrock

Instead of tax why don't they just ask corporations to help out, voluntarily?

TexasTim65
TexasTim65

300,000,000/7500 = 40K spent per homeless person.

That's over $100 a day. For that cost they could rent every homeless person a room at Motel 6.

If you look at it another way, 40K is higher than the median income (31K) for a single person in the USA! So being homeless makes more money than working by 9K and they don't pay tax.

And they want to spend more money per person. Insane.

abend237-04
abend237-04

I no longer care. This will be my last comment on San Francisco insanity. I wish them luck. They're certain to need it.

pi314
pi314

Expect corporations (e.g. Square) to relocate elsewhere...

Dlw
Dlw

We should not assume our ideas of capitalism apply to China. Culture, population, geography and form of government are appropriate for each of our countries. While the U.S. and China people have similar capitalist objectives, China has a vast emerging middle class with government oversight and control in all aspects of their daily lives. The PRC governing leadership can move quickly and decisively, as conditions may require, to control domestic as well as economic circumstances. Which brings our similarities full circle.

ReadyKilowatt
ReadyKilowatt

Part of the problem is that there are reasons why a city might not want to build more buildings. SFO has some extremely tight regulations because one of the draws for the area is the "charm." It is much the same as what happened in Aspen Colorado -vs- Vail. You drive through Vail and it is almost all high-rise hotels and roads designed to move vehicles. Aspen is still attempting to hold on to their "charming" qualities through restrictive building regulation. Any time there's a builder or project that needs an exemption from the regulation there's always a public comment about not wanting to see the "Vailifcation" of downtown Aspen.

Believe it or not, there are homeless people in Aspen. Actually living in the streets, although more of them are couch surfers. The more common solution is incredible traffic headed into town from all the commuters. The fix (apparently) is more government projects, in this case the Aspen housing authority. It doesn't work either since all it really does is attempt to control, though heavily weighted lotteries, the low cost housing market.

Kinuachdrach
Kinuachdrach

It is so easy for voters to be generous with other people's money.

Blurtman
Blurtman

Soylent Green - the only solution.

RonJ
RonJ

Solving a problem by creating a new problem.

They are all smiles in the Yes on C photo, until they have to deal with the equal and opposite reaction by the corporations affected.