money.jpgSan Francisco voters will indeed be asked to tax themselves this November — always a fun proposition in a recession — but not to the extent originally feared by Mayor Gavin Newsom, the Chamber of Commerce and other tax haters.

Only one tax — a tax on real estate sales of $5 million or more, proposed by Supervisor John Avalos — was forwarded to the ballot on Tuesday. A parking tax, proposed by Supervisor Ross Mirkarimi, and a combination payroll/commercial rent tax, proposed by Supervisor David Chiu, were both dropped.

Supervisors in the progressive camp — of which Avalos, Chiu and Mirkarimi are all card-carrying members — have long said that they want to find a way to raise $100 million of new, ongoing revenue.

This is seen as the only long-term solution for the city’s dire finances following a series of brutal budget years. Beginning in 2008, Newsom balanced repeated deficits — exceeding $500 million in the last two years, with similar deficits projected for the next few fiscal years — with budget cuts and additional fees, Avalos said.

“We have cut to the bone,” said Avalos, whose tax would raise $35 million annually, according to a report from the Controller’s Office.

Supervisors voted 8-3 to put the real estate property transfer tax on the ballot. Supervisors Sean Elsbernd, Michela Alioto-Pier and Carmen Chu, all Newsom allies, voted against the tax measure.
It remains to be seen exactly how Newsom will react to having a tax measure on his city’s ballot. The mayor has said that the Board must drop the tax measures before he would agree to sign the budget or to spend the monies included therein (the City Charter says that while the Board appropriates money, only the stroke of the Mayor’s pen will guarantee that the money is spent).

Newsom stands firm that new taxes are not needed, according to mayoral spokesman Tony Winnicker. “The Mayor trusts the voters to decide whether new tax increases are wise amidst a lingering economic recession and a still-jobless recovery,” Winnicker wrote in an e-mail, before naming a veritable shopping list of long-term revenue fixes like labor concessions and the smallest City workforce since 1998.

“Every year a deficit is projected and for the past five years we’ve balanced the budget without new taxes and without appreciable service reductions, we’ve even expanded education, capital and other programs,” Winnicker wrote. “We will do the same again next year, as we’ve always shown we can. The deficit is NOT the $700M that some still use; it’s well below that as a result of the approval of the balanced budget today.”

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  • bloomsm

    Well at least the more ludicrous tax schemes were dropped. I wonder how many folks pay a transfer tax on property sales over $5 million? Chris, maybe the Treasurer/Collector or Tax Assessor knows the percentage of homes in SF that are over $5 million.

  • bloomsm

    Well at least the more ludicrous tax schemes were dropped. I wonder how many folks pay a transfer tax on property sales over $5 million? Chris, maybe the Treasurer/Collector or Tax Assessor knows the percentage of homes in SF that are over $5 million.

  • JayDizzletonTheFourth

    Thank you Chris for bringing the straight facts and about these taxes. If I had to pay any more payroll or parking taxes to live in this great city, I would move to Sausalito. At least there I can get a good turkey deli meat…

    I look forward to reading more of your work. I think we have a young Clark Kent on the rise!

  • JayDizzletonTheFourth

    Thank you Chris for bringing the straight facts and about these taxes. If I had to pay any more payroll or parking taxes to live in this great city, I would move to Sausalito. At least there I can get a good turkey deli meat…

    I look forward to reading more of your work. I think we have a young Clark Kent on the rise!

  • mikesonn

    JDTF, what straight facts? I was hoping that the three taxes and their benefits/down-sides would be laid out, but nothing was mentioned about them at all. All that was said is who is on who’s side and how taxes in a recession don’t go over too well. Same old, same old.

  • mikesonn

    JDTF, what straight facts? I was hoping that the three taxes and their benefits/down-sides would be laid out, but nothing was mentioned about them at all. All that was said is who is on who’s side and how taxes in a recession don’t go over too well. Same old, same old.

  • marcos

    The gross receipts and payroll tax would lower the amount of payroll taxes paid for most businesses and apply a gross receipts tax to replace that which would impact on business classes according to their margins.

    Currently, small business pays no local taxes at all. They are exempt from the payroll tax and pass through all other taxes, such as sales and property, to the customer. They also pass on fees and requirements such as Healthy SF to the customer in many instances.

    Many classes of larger businesses are exempt from the payroll tax, and the gross receipts tax would have made sure that all businesses paid their fair share. As it stands, the current tax regime only captures a subset of business.

    Chiu’s tax measure would have only increased taxes if one sees applying taxes equitably across all classes of larger business which had been untaxed as a tax increase.

    So the situation remains that San Franciscans are subsidizing businesses with our taxes, even if that business benefits significantly from the infrastructure and services we pay for.

    Delightful.

    -marc

  • marcos

    The gross receipts and payroll tax would lower the amount of payroll taxes paid for most businesses and apply a gross receipts tax to replace that which would impact on business classes according to their margins.

    Currently, small business pays no local taxes at all. They are exempt from the payroll tax and pass through all other taxes, such as sales and property, to the customer. They also pass on fees and requirements such as Healthy SF to the customer in many instances.

    Many classes of larger businesses are exempt from the payroll tax, and the gross receipts tax would have made sure that all businesses paid their fair share. As it stands, the current tax regime only captures a subset of business.

    Chiu’s tax measure would have only increased taxes if one sees applying taxes equitably across all classes of larger business which had been untaxed as a tax increase.

    So the situation remains that San Franciscans are subsidizing businesses with our taxes, even if that business benefits significantly from the infrastructure and services we pay for.

    Delightful.

    -marc

  • bloomsm

    The concept that “San Franciscans are subsidizing businesses with our taxes” is hard to support and generally speaks of the same re-treaded anti-corporate diatribe that the SF Bay Guardian has been running since I moved here in the 80s. The climate at City Hall in the last few years has been hostile towards business in general, which is a self-defeating attitude because that’s where the bulk of revenue and job creation comes from. It’s great that our Supes–who are almost completely lacking in any experience running a business–think that further taxes are an answer. Instead, I’d love to see concrete ideas for job growth and real results.

  • bloomsm

    The concept that “San Franciscans are subsidizing businesses with our taxes” is hard to support and generally speaks of the same re-treaded anti-corporate diatribe that the SF Bay Guardian has been running since I moved here in the 80s. The climate at City Hall in the last few years has been hostile towards business in general, which is a self-defeating attitude because that’s where the bulk of revenue and job creation comes from. It’s great that our Supes–who are almost completely lacking in any experience running a business–think that further taxes are an answer. Instead, I’d love to see concrete ideas for job growth and real results.

  • marcos

    The argument from the trickle down side is that businesses pass their taxes on to their customers, so people end up paying all taxes anyway.

    Fine, since we end up paying all taxes at the end of the day, we should get to decide whether those taxes are paid directly by human persons or indirectly through corporate persons.

    This notion that corporations should enjoy all benefits of personhood without having to bear any of the responsibilities don’t cut it.

    There are no examples of a successful, sustainable economy where corporations are untaxed and the total tax burden is shifted directly onto humans.

    -marc

  • marcos

    The argument from the trickle down side is that businesses pass their taxes on to their customers, so people end up paying all taxes anyway.

    Fine, since we end up paying all taxes at the end of the day, we should get to decide whether those taxes are paid directly by human persons or indirectly through corporate persons.

    This notion that corporations should enjoy all benefits of personhood without having to bear any of the responsibilities don’t cut it.

    There are no examples of a successful, sustainable economy where corporations are untaxed and the total tax burden is shifted directly onto humans.

    -marc