Oh, give me a break. I live in the supposed "tax free hooker area", and there are probably more hookers in the lounge of the Ritz Carlton than there are near the SF Furniture Mart (where the city wants Twitter to move). It's not like they're proposing to move them into an abandoned Happy Donut at the corner of 6th and Market.
City hall and the Asian Art Museum are one block north. The opera, symphony and ballet are two blocks northwest. There are two high-rise, luxury condominium buildings directly across the street. Walk 10 minutes west, and you're smack in the middle of one of the city's up-and-coming neighborhoods (Hayes Valley), replete with boutique shopping, gourmet coffee stands and antique stores.
If offering Twitter a sweetheart lease on a gigantic building in a gentrifying urban neighborhood and giving them a tax break is enough to drive them away, then I sincerely wish Twitter luck in trying to retain their employees once they move to Brisbane. What've they got out there? A Taco Bell?
This is the same game of chicken as played between sports teams and municipalities. It's interesting because it's highflyin startups instead of the New York^W^W San Francisco Giants, but the outline is the same.
Muni wants to keep tax base and halo effect, but maybe also wants an extra cut of the upside. Startup wants to expand, but also establish a base of operations. Everyone wants something and has a backup threat just in case. The dance ensues.
SF has some interesting tax policies. I had a startup in SF lo so many years ago. Our total capitalization was $30K. We spent about $15K (on equipment and rent, no salaries) total before shutting down. A few months later SF City/County tried to collect a /$69K/ payroll tax bill based on... well, I never figured out what. I sent them a letter + documentation and never heard about it again.
No, they don't even have a Taco Bell. You may ask what is Brisbane then? Its a residential area with a few industrial parks. The gasoline for the greater San Francisco area is pumped from the Brisbane junction.
For anyone who wants to move a company there, they don't have much amenities. They have a single chinese restaurant, una taqueuria, and have a stellar coffee shop, but its not open long enough for the hacker personality.
Brisbane is a small town that used to be lively during the days of Johnny Cash. Its not a substitute for a city like San Francisco or even a south bay area like Mountain View. Its that mountain town you see up in Tahoe, but 1 mile south of the city. I actually suggest making a daytrip to hike the abandoned railroads through it.
If they were to move into the open buildings in the area, this could make lives of people who use public transit annoyed. The Caltrain stations are 1 mile away on each side away from Brisbane, there is only a single SamTrans running along Bayshore and forget BART, its way too far. Biking is your best bet via caltrain.
Since Brisbane is an economical situation where they are talking about shutting down the elementary and highschools, this could be a very good thing for the city. As for Twitter and other companies alike, its a question about what type of culture they want to grow. As a resident of the area, I prefer living in Brisbane, rather than working.
The city, is just too enamored with itself, especially when the city is represented by the BOS. If SF wants to behave like this, (making a tax grab) they'll likely end up alienating what they're attempting to co-opt.
You hear SF trying to ride the coattails of stratups everywhere. SF the 'heart of silicon valley', 'the epicenter of entrepreneurship', etc, etc. but on the other hand, it s as if they want to do as much as they can to drive job-growing business away and let SF just become the kitchen/dining room to silicon valley.
My company is right next to that donut shop on 6th, hooker area hasn't got anything on the strung out homeless people near my office. I know this isn't the point of the article, but the bigger issue here is how the city handles its homeless. SF pays $200 million/year on homeless programs targeting the 7k homeless people, something is wrong with this picture.
Well, there aren't any donut shops in Queensland anymore either. They all got washed away by the recent epic storm that made Katrina look like a fourth grade spitball contest.†
†This is of course, patently false. Oh sure, the storm was bigger and nastier, but if you do insist on building your city below sea level, then route crucial funds from the Army Corps of Engineers who are supposed to keep the levees strong, to some Blackwater dudes playing 'choose your own adventure' in the Middle East...
That's so completely besides the point that I feel I should be sending a quote with context to somebody compiling a rhetoritician's dictionary.
Let me help you, since you are being so pointedly blind to your own offensiveness. (Which only hurts your ability to be pithy and forceful, by the way.)
This is a conversation about tax breaks and municipalities, in this case, the subjects involve SF and some startups.
This particular thread was an aside about Australia, because of the name "Brisbane".
You derailed it into a micro-rant about a recent tragedy, and then threw in an even less relevant slam on the US.
I'm not the most popular person here on HN. I've gotten into it with Justin of Justin.tv before because I was calling out some of the more offensive startup hysteria/bullshit.
You are something else entirely. You're not an iconoclast.
You are the 25 year old whose parents died when he was 2 y/o and won't shut up about it at the bar.
Have yourself a coke, a smile, and shut the fuck up.
Plenty of companies are located in the far more boring Silicon Valley. And assuming they are talking about Sierra Point, a place close to a freeway and caltrain. Doubtful it'll be a problem. :)
I appreciate it when people pay taxes because I like public transportation, fire safety, paved roads, bridges, public schools, police officers, health inspectors, safety inspectors, public parks, libraries, clean air, (relatively) fair corporations, airports, hospitals, court systems, electricity, vehicle regulation, elections, veteran associations, child support, public television...
San Francisco is a pretty nice place to live. Sometimes you need to pay a little more for nicer things.
public transportation? I live in Vancouver and recently flew in to SFO. Being from Vancouver I thought I know I'll save time and money and just take the subway in. BART is fucking disgusting and I couldn't sit down on the train for fear of picking up god knows what. In Vancouver if you start a startup and hire someone under 30 with a degree the gov't will pay you the first $15/hour of their salary, the rest you can avoid paying all taxes on if you make a SRED claim. All that AND we have public transportation you can sit down on, and even inside the tunnels you still have 3G connections. All that AND 'free' health care, and there is no f'ing way the city would ever levy a 1.5% payroll tax, let alone on stock options. In Vancouver we live in the best city on earth and pay less tax to the city than in SF.
If you include the portion of your federal & provincial taxes that are then granted/budgeted to the city, I bet the tax you're paying "to the city" is a lot higher than you think it is, and per-capita are probably on par with SF.
Also, unrelated question: How much harder is it for a 31-year-old to find work?
That question largely depends on your skill set and who you know. If you know lots of people in SF then it's going to be more difficult in Vancouver if you don't know anyone.
I'm not sure what age has to do with the question though? Either you have have marketable skills or you don't.
edit: After reading jackowood now I realize what the issue was, most places are up front about it and they look like really shitty places to work that are more concerned about saving $15/hour than figuring out how to make an extra $15/hour. They take a total labour mentality to programming instead of the view of code as a capital good with near-zero cost of reproduction. (aka, their idiots). I've never had a problem finding work in Vancouver and I'm 29 with no degree.
I think his point was that if that subsidy exists for hiring people <30, once that subsidy stops applying, you'd expect companies to be less willing to hire you. The idea being that they could hire someone with basically the same experience and also get the subsidy.
The problem with Bart is 1) cloth seats, and 2) a large homeless population. Not a great combination. There's been some talk of replacing the cloth seats with plastic seats, which will be less comfortable but much easier to clean. I'm not as creeped out by bart as you are, but it is kind of gross.
Vancouver is a great city, no question about it. I think San Francisco is bigger, more disgusting, more thrilling, and in my opinion uglier and more beautiful than Vancouver depending on where you're looking. Keep in mind that part of the reason for our homeless problem is that we're a magnet for the cast-offs of an entire nation with less of a support system than you have in Canada - it's not like San Francisco manufactures homeless people in some factory south of market and dumps them out on market street every morning. We're not purely innocent victims in all this, San Francisco has done plenty to earn that magnet status. Every now and then a mayors of some other city starts a kerfuffle by offering homeless people $50 and a one way bus ticket to SF (though SF actually used to bus its own over to Oakland).
I think a very well implemented national health care program can be a competitive advantage. The other things you mentioned seem less important to me, valuable at the margins, but not game changers in any way. It comes down to UBC vs (Stanford + UCSF + UC Berkeley). UBC is a wonderful university, don't get me wrong, but as long as the Bay Area has those three, it will be a huge player in high tech.
The (biggest) problem is that BART has cloth seats, which are absorbant and more difficult to clean than plastic seats.
btw, the cloth BART seats pictured in that article are some of the cleanest I've seen. I ride BART every day. Most seats are collapsing, ripped, and filthy.
It's up to SF to manage their city accordingly. If anything the city has been blessed by the types of organizations that keep it afloat. They can definitely tax, but they should look to make it competitive. For instance...the projected number of 3000 Twitter employees in 2013 at a rent rate of 1000 dollars per employee per month equates to 172M dollars in rent a year in the city of SF. Of course, not everyone will live IN SF, and perhaps the average will be lower -- but that's still an enormous amount of money moving out of the city (to pay for all those nice things you mention).
Furthermore, and I'm still figuring out the numbers on this one, I am curious to see what the sales tax losses (among others) will be when major companies like these move away from the city.
And really, it puts entrepreneurs in an awkward position of being forced to go to SF (because that's where all the talent want to be) and having to find a way to survive as well. San Francisco is definitely right to earn taxes on the many wealthy individuals that live in its borders, but I do think there is a more symbiotic relationship to be had.
> I appreciate it when people pay taxes because I like public transportation, fire safety, paved roads, bridges, public schools, police officers, health inspectors, safety inspectors, public parks, libraries, clean air, (relatively) fair corporations, airports, hospitals, court systems, electricity, vehicle regulation, elections, veteran associations, child support, public television...
I'll be sure to remember that every time the government raises taxes and pay up without asking any questions or being critical.
I don't appreciate the extravagant waste and the entitlement of the state to impose it's will on the people. With our taxes, we also support bailouts, wars, and other profiteering of those in control. Also, these institutions are basically monopolies, where the people in charge are not really accountable to run them efficiently or effectively.
Does giving the government more money make the government more effective?
Nice straw man. The originating subject was on taxes (since it takes more than a city to provide all of those services), not only SF taxes :-)
San Francisco residents live in the United States of America. The United States of America imposes federal taxes. Federal taxes have been used to fund wars and bailouts of various failed businesses.
Of course, no real city has the authority to have a military. The city does have a police force, which often acts in ways that do not better the lives of SF residents (parking tickets for example).
It's not like "public transportation, fire safety, paved roads, bridges, public schools, police officers, health inspectors, safety inspectors, public parks, libraries, clean air, (relatively) fair corporations, airports, hospitals, court systems, electricity, vehicle regulation, elections, veteran associations, child support, public television..." is entirely in the domain of the city government.
I just have a adverse reaction to arguments that claim I should appreciate a service provider that charges too much. Sorry, don't like getting ripped off.
As it says in the article, the problem is that the law covers not just salary but employees' stock gains as well. Twitter and Zynga uncomplainingly pay payroll tax on salaries like other companies, but the growth in their valuation combined with the fact that lots of employees get stock means that if the law were enforced, Twitter and Zynga would be hit with huge extra bills that other companies aren't.
This is probably because other companies either aren't in SF, or aren't winning the Startup Lottery. You yourself have long advocated that the former greatly increases your chances of the latter.
Now, it's late, so correct me if I'm wrong in my thinking here:
If twitter magically gained $3 billion in additional valuation, and all employees cashed in all their options, all at once, it would result in a "huge" tax bill of .... $13 million or so. Compare to the ~$270 million in capital gains taxes the employees would have racked up when they exercised their options.
Yeah, I think that Twitter could live just fine with that. Making a large and loud public fuss is cheaper, of course.
In light of all that, I think "huge" is a misleading word to use.
(Assumptions: a full 30% of the company as employee options; directly translating a higher valuation into the strike-vs-share price spread that's actually taxed.)
Actually I've never said that startups do better in SF specifically, but rather the Bay Area. This problem is limited to the city.
The difference between the two cases is that the employees are being taxed out of money they have (if they exercise and sell) whereas the company is being taxed based not on revenues but on the appreciation of its stock. So a company whose valuation shot up in advance of anticipated revenues could find itself with a bill it had no money to pay.
The tax bill your hypothetical company faces will be based on options that are actually exercised. Except for an incredibly fortunate few early employees, I'd wager the vast majority of options have a strike price something higher than 1.5% current valuation ... and, viola, there's your cash to pay the bill, perfectly timed. Crisis averted!
More generally, a company whose valuation shoots up but which is unable to find cash to meet shorter-term needs is Doing It Wrong and doesn't deserve the higher valuation.
Musing about this tax in general, without specifically debating:
I think payroll taxes of any form are one of the worst kinds of tax, so from that point of view we can agree. (Somehow I don't think you'd agree that significant increases on taxes for the wealthiest are a better alternative, though.)
But, if you're going to tax wage and salary compensation, then it's more than fair to tax options and other forms of compensation, too -- otherwise you end up with a regressive payroll tax, which punishes poorer workers & companies at the same time as being far less efficient at raising the needed revenue.
(edit: Part of my post was in response to something I hadn't noticed you'd edited out, so I snipped it belatedly.)
Ah, OK, now I understand a problem I can agree with - so it's not so much the damage from paying 1.5% on a profitable transaction (employees exercise options as part of winning start-up lottery) but rather the company has to pay cash for a gain it only realised in paper. So now I understand why they were saying a company going for IPO would have to pay most of the money raised as taxes, rather than just 1.5% of it.
Why is no one suggesting applying the 1.5% when cash exchanges hands? Everyone is either suggesting keeping the 1.5% as is, or scrapping it completely for stock options. But surely a middle ground allows cash for taxes as a small percentage of cash from profits?
I'm not sure I follow your post; apologies if it's my own up-too-late-itis. "When cash exchanges hands" is when the tax does apply, assuming by that you mean options being exercised.
That's why in my imaginary example a post or two ago, one of the more fantastical & unlikely parts of it was a full 30% option pool all being exercised at once.
Hence, (and I apologize for any inaccuracies in paraphrase) the post you are replying to is recasting the tax as a potential cash-flow issue, rather than a great and unfair ongoing burden: because it's not.
My understanding was the same as yours above, but it seems that if there is a valuation event – an IPO, for example – then the rise in value of all shares is counted, not just the ones which were sold.
Separately, I do not think the tax is unfair. Tax has to come from somewhere, and if SF can show a nicer environment for employees and founders to live in, then they can charge a higher price for the environment. Tax competition takes care of testing whether this is a wise decision, and there is plenty of tax competition in the region surrounding SF.
To me, tax becomes unfair if it is arbitrarily applied to some people, but not to others, e.g. letting Twitter and Zynga off, while taxing other start-ups.
> My understanding was the same as yours above, but it seems that if there is a valuation event – an IPO, for example – then the rise in value of all shares is counted, not just the ones which were sold.
Well, that would explain a bit of the whining, but I will need a nice solid citation before I believe a word of it.
First, because I cannot fathom how it could possibly work: What's a qualifying "valuation event"? What if another event comes along and the valuation has dropped -- is the company entitled to a refund, then?
Second, because that would be the only tax scheme I've ever heard of, except maybe some proposed & hair-brained wealth taxes, that directly taxes unrealized gains. (Wealth taxes I'm aware of that actually exist tax unrealized gains under simple growth assumptions, not based on any sort of actual valuation.)
Third, because if that were the case you'd think that the vocal opposition would be able to articulate it more clearly.
> To me, tax becomes unfair if it is arbitrarily applied to some people, but not to others, e.g. letting Twitter and Zynga off, while taxing other start-ups.
Exactly the problem that the options tax was introduced to solve, as well. If there is a tax on employee compensation, why shouldn't the executive compensation of $1 salary + $300 million in options be taxed at the same effective rate as the janitor's wages?
(N.b.: I think a payroll tax is dumb, but a regressive payroll tax is dumber!)
(Edited a bit for clarity & removed a side comment.)
That doesn't seem like a satisfactory answer to the question. It essentially translates to "they deserve to get special treatment because they're rich."
Why should a company with lots of tax gains not have to pay the same taxes on them as the company next door? Certainly they were familiar with the tax code and its consequences when they set up shop in that city.
The whole article reads me as simply "big successful company wants to avoid paying taxes."
the problem that the companies the law applies to aren't necessarily rich; they're not being taxed on their revenues, but on their valuations, which reflect investors' hopes about their future revenues. So they're effectively being asked now for money they don't have yet.
But in any case it would not be "special treatment" to exempt them; this is one of those laws that is so weird (zero other cities have it that I know of) that the only reason it has stayed on the books is that it has not actually been enforced in the past.
You're splitting hairs. A company whose valuation rises enough for this to become an issue is very rich in a very real sense.
Second, most events that would cause such a huge rise in valuation are accompanied by a huge influx of cash. There may be some tiny edge cases, but a gangbusters IPO ain't one. The bill is due once a year, and imagining a company being without the cash for it stretches my imagination to the breaking point.
Third, "being asked now for money they don't have yet" is the entire reason the company is selling equity in the first place. They can surely budget for an extra 0.015 of an already proportionally tiny amount.
Fourth, they aren't taxed on valuations but on, to coin a term, their employees' realized compensation. This may be based on valuation, but justifiably so, since compensation is compensation.
Hell, a company with bottomless greed and a deep commitment to nickle & diming could probably find a way write the tax bill into their options contracts.
Fifth, the weird part of the law is that it is structured as a payroll tax rather than as an income, capital gains, or wealth tax.
Otherwise it appears to be a very honest attempt to fairly tax different forms of compensation in a non-regressive way.
Kind of what's going on here is that only very successful companies face a large enough impact from the tax that exercising the option of exit is at all attractive. Say your SF startup was being acquired for $50mm, $10mm of which is employee equity hit by the tax (investors and founders don't pay it). You end up having to pay $150k between you, which only now is starting to be a big deal -- even one order of magnitude down, it's not worth the hassle of moving your office to a low tax jurisdiction just to dodge 15k of taxes imposed over 2-5 years -- and of course you have bigger issues to worry about so the tax doesn't matter that much. Spread over 100 or so employees and it looks like a fairly small salary increase to be paid for cost of living reasons.
I faintly recall a discussion of when you should accept dilution (which a tax is) if it raises your chances of success. I tend to assume that startups locate in SF rather than the non-SF bay area for reasons that they feel give them more than a 1.5%*employee equity higher chance of success (shorter commutes for your people, etc.).
More generally, it's only going to be the very large companies that want to exercise their option of exit for this reason: moving sucks and nobody wants to do it. By the time it's millions of dollars in taxes (i.e. valuation > $1bn or so) you'd think about it, but I'd guess not before. So it's not the greatest idea from a tax equity perspective: a tax only the extremely wealthy find it worth their while to dodge is still regressive. Lame capitulations to keep the few companies with this high-class problem in the city are probably correct from a utility-maximizing perspective, if kind of morally distasteful.
That's not the issue - or rather, not for the city. They are not particularly anxious to get their hands on a slice of everyone's stock options. Losing payroll revenue from Twitter for 6 years is worth less than the potential overall gain from getting the company to move into the mid-market corridor over the long term. San Francisco is facing a 3 million sqft glut of empty office space in that area over the next 12-24 months, which will mean another 10-20 years of blight if they don't head it off.
I think it has more to do with the timing...in that, these are two companies that are going to be seriously affected by SF policies in the short term.
Why Twitter and Zynga might be more deserving than a non tech company is because of the relatively high salaries of their staff. This extra disposable income flows up and down to the rest of the city.
Look at it this way. You run a dry cleaning business. These are your choices:
Your city can give Twitter a tax break to open shop near you (the same city). This will hopefully bring you new customers and help your business. This can work very indirectly. Twitter Employee >> Diner Waitress >> You.
Or
Your city can give you a tax break, but not one to Twitter. Twitter goes to a different city (because you can always find someplace that has lower taxes). Now neither you nor the diner have new customers. In theory, the tax break that you get ends up being less money than the extra money you would have made had Twitter opened shop.
a) Not more deserving, but most companies in the city don't have to deal with the secondary tax mentioned. The 1.5 payroll taxes on gains from stock options is aimed at high-growth / go-public companies.
b) The article is asking why do this to ANY company in the city. Even in small biz an additional 1.5% in regular payroll taxes hurts.
I don't think that was the point of the article. Rather, Arrington was commentating on the state of taxes in San Francisco, and he used Twitter and Zynga as an example of high-profile companies which were facing these taxes.
The author makes the case that these companies are driving job growth, and that the tax on stock being treated as payroll is unusual and counterproductive.
It has nothing to do with those companies deserving anything. The problem that is being solved is that if Twitter or Zynga leaves San Francisco and continues to grow and hire people in their new location, that will be used against the current politicians in upcoming elections. Challengers could point to the new jobs being created in another Bay Area city and say, "San Francisco could have had those jobs, but Politician X let them leave. I will make sure we keep the new jobs in San Francisco." On the other hand, if the current politicians give Twitter or Zynga too big of a tax break, they'll get challengers claiming that they gave away the store to these rich companies, along the lins of what some politicians are already saying about any proposed deal. Hence, the negotiations.
>The problem that is being solved is that if Twitter or Zynga leaves San Francisco and continues to grow and hire people in their new location, that will be used against the current politicians in upcoming elections
Maybe, but what you're saying is politicians are more interested in the politics in and of itself than really serving the citizens. They should do what they think will benefit the majority of the citizenry with disregard what it will do to their political 'career'.
One other pet peeve I have with the city is its requirement that construction jobs must include a large percentage of city residents. This is a city which prides itself in being open and welcoming of the whole gamut of locals and all immigrant types. How does that reconcile?
What if San Mateo county got the itch and said, you know what, anyone not from San Mateo working in San Mateo will be levied a non-resident payroll tax.
Why yes, because hoping to take this insane amount of money flowing into the city (and state!) and use it to make everyone else's lives that much more livable is a terrible, horrible, no good very bad thing. I'm sure nobody involved in the tech sector has ever benefited from any public monies; it's only right that they shouldn't have to pay any taxes!
Having lived in cities on various parts of the city-services spectrum, I do think it overall improves the quality of life to have higher city taxes and more services (especially public transit). But fortunately people who think otherwise can choose where they want to live accordingly, since many cities are available on different parts of that spectrum. For example, if you prefer the tax/services tradeoff Houston makes to the one San Francisco makes, you can live in Houston (and many people do).
If I understand correctly, all this fuss is about a 1.5% tax on wages. If so, it seems nonsensical: settling in the Silicon Valley costs much more than that, yet companies still prefer to settle there than in the rust belt or in Europe. There is a significant advantage in being in the SF area, and companies already evaluate this advantage to much, much more than 1.5% of payroll.
Now I understand that big companies try to pretend otherwise, so that they can scare the city and save these 1.5% for themselves, but don't take this for anything other than BS.
It's a 1.5% tax on wages and stock gains. They pay the 1.5% on wages already and are fine with it. They just don't want a massive tax bill when they go public for all of the stock they gave to employees.
According to one of the previous articles on this subject, this provision actually requires companies to pay taxes on their employees' options based on the company's valuation, even if those employees aren't even able to sell those shares.
The example I remember was that if a company raised a bunch of money at a ~$1B valuation but was later acquired for a significantly smaller sum, they would have already paid taxes on their employees' stock option gains at the ~$1B valuation based on the increase in perceived value of their shares at the time they raised money.
Edit: what I said above is in line with what pg said in his comments here:
The difference between the two cases is that the employees are being taxed out of money they have (if they exercise and sell) whereas the company is being taxed based not on revenues but on the appreciation of its stock. So a company whose valuation shot up in advance of anticipated revenues could find itself with a bill it had no money to pay.
You know what ?
Sometimes it can't be about the money, sometimes it's about what you can do for the community and the city you choose to have a business in, and the quality of living there. Why do most startups are located there and in cities nearby ?
I'm pretty sure Twitter wouldn't be twitter if they weren't in SF.
And this is what's scares me about this whole "bubble 2.0" thing. People (investors) are getting too greedy, they rather move an entire company, including reallocation of it's employees than to pay a fraction of their $xxB evaluation.
I don't give a damn about the investors, they knew where this companies was located. If they aren't informed before their investment, this just shows how much they know about their own country and cities.
Besides, you have no idea how much tax europeans startups have to pay, If there was a place like SF in Europe, I would be moving there tomorrow morning.
And finally, we are talking about Twitter. Have they finally got a way of making any real money ? Or this company based only on paper money ?
The SF Chronicle has long been playing it the other way: the city government has been tripping over itself to brown-nose Twitter and other companies.
Being able to work in the city is a huge draw. Just ask the many people who live in SF and commute down to Stanford, Google, or elsewhere in the South Bay.
There is a reason why people set up in San Francisco even though it costs more. We have an office there, and in terms of both recruiting and business contacts, moving it out of San Francisco would be a waste of money.
We also have an office in NYC -- also not cheap, but totally worth it. Between NYC and SF we have no trouble recruiting employees who want to live in a desirable location (and we, the officers, want to live here too!), and nearly all of our partners and business contacts are either in SF or NYC, too.
Not sure if he has a study to prove this.. But can you think of any other industries in SF that have generated huge job growth during the past 10 years?
I can't. That doesn't mean Arrington is right, but I can't think of a reason to doubt that statement.
And I know I've heard that many of the financial companies have moved out of the city or downsized operations here during that span in order to avoid the high cost of living and tax rates.
Has the tech industry in SF generated huge job growth recently? From the scarce statistics I can find, it seems SF tech employment has actually declined over the past few years.
This is likely to be a political battle between the progressive members of the Board of Sup and what former Mayor Newsom had apparently set up with Twitter.
Newsom had always focused on developing and growing high tech companies in SF to increase jobs and revenue for the city. On the other hand, certain members of the Board strongly believe in taxing our way out of the deficit. As a startup founder in SF, it's sad that I may one day have to deal with this.
No one in their right mind thinks Twitter's moving to Brisbane except for the jokers in city hall. Their employees would sooner quit than have to commute to an office park wasteland everyday.
«The company will be forced to move to a new location in order to get a six year payroll tax break». No. The company is forced to pay tax, just like everybody else. Tax must be payed to keep community-owned stuff rolling, functioning and improving. If a company jumps trough hoops to avoid that, they are putting efford in being selfish, scrooges. And should probably be banned from your community in the first place, since they only leech and don't contribute back. It might be, that growing up in western Europe has made me a bit too soft, but I think this article illustrates perfectly why so many people despise "big companies", rather then embrace and love them for doing their good work for their great country.
I'm probably a "fecking eejit," but what exactly is so stupid and ridiculous about the quote "Who are the [Twitter] investors? Probably some of the wealthiest people in this country. And we are giving them more wealth."?
I mean, would the tax really hurt Twitter or Zynga? This stuff is just kind of disheartening. Oh no, your multi-billion dollar massive success of a company might lose a couple mil to taxes, better throw a fit or pack up and move to a new city.
Maybe i am too, but I can't figure out how SF is "giving" [the companies] wealth? Said companies are earning their own wealth. SF is not "giving" it to them, I'm sure.
Let's say you were going to lease storage (physical) and outfit A had a flat fee of 50/mo. Outfit B had a flat fee of 70/mo plus appreciation on the goods you stored. Let's say 20/mo difference had negligible impact on your disposable income. Who would you choose?
If you have a choice, why choose the costliest one?
I might choose the one that is closer to me, or closer to where I would want to use the stored items. I might choose the one that also offers a parcel reception service. I might choose the one that has better security - some storage outfits are just a single room separated into lots by loose cardboard. I might choose the one with greater hours of access.
One day people will get that there is far more to 'value' than 'money'. SF is a nice place. People want to be there. Why shouldn't they capitalise on it? Boo-hoo, stupidly wealthy company can't take the heat, so go move to Idaho and see if that tax is really the kind of thing that cripples your tech company.
Rah, rah, private companies should be allowed to accrete wealth for their superior products because that's The American Way. But should a city offer a superior product, suddenly we're all supposed to be communist equalists when it comes to the public life?
Exactly. I could count on two hands the number of places I'd be willing to live (unless you were paying me truly obscene amounts of money and doing incredibly interesting work). Proper cities with good public transport and fun things going on. In a country where I speak at least a bit of the language.
Quality of life is not something to be ignored; requiring employees to live elsewhere or make long commutes is a big deal. When you're a startup looking for younger employees and fostering that kind of culture, location is vitally important.
If only businesses were as simple to manage as leasing physical storage space.
It's not just City versus Company. Your employees are a factor in this, and employee decisions are based on lots of different variables.
Employees are the most perishable resource a company has. If my company told me they were moving my downtown Chicago office to the suburbs, I would start looking for a new job. I'd wager that half to 2/3rds of my office would not like an office move either, primarily because of the increase in commuting time and cost. (Hell, I would have to buy a car!)
Twitter and Zygna have an enormous investment in the talent of their employees. Many of them are likely to prefer working in SF rather than Brisbane. So they may play hardball with the City, but I'll bet they ultimately do what their employees want them to do.
Cutting straight to the chase, there may be hidden opportunity costs as well. You might attract better engineers if your company were in San Francisco rather than Brisbane.
Twitter is almost certainly not going to pay this tax. The finance committee supervisors (who will consider it tomorrow) are fiscally conservative and Avalos and Mar are the only major opposition to the tax break when it comes before the full board next week. Mar will roll over in the (unlikely) event that the board is split.
This is not really about the tax, though. The city is not so much fixated on taxing anyone's options, as it is using the exemption to make it worth Twitter's while to stay in the city. Taxes are lower in Brisbane, but rents are higher because the building on offer there is newer. Over 6 years, Twitter stands to save ~$15 million by staying in the SF Mart building, notwithstanding the higher initial refurbishment costs.
The only problem here is that the U.S has completely different tax laws for each state. If everyone wasn't so fanatical about state's rights it would be far more difficult for companies to jump ship in order to evade tax, and far less administrative burden caused by tax compliance issues.
I like to think of the states as "regulatory laboratories". In an ideal world, states would learn from their neighbors' regulatory successes and failures.
Is hiring 800 people really that big of a deal for a place like SF? The article made it sound like 2400 new jobs accounted for not only most of the tech jobs in SF, but most of the growth all together.
That's not really unusual actually. It was submitted 31 minutes ago and has 6 up-votes. That's enough for just about any story submitted by anyone to get on the front page (unless there is a filter in place that requires more votes, like anything Julian Assange related).
3-4 up-votes in the first 10-15 minutes of submission is going to get your story in the middle of the front page. It only sucks that TechCrunch is popular here, IMO.
San Francisco needs to run the city more efficiently. I'm tired of paying lazy lifers to do nothing but collect extravagant salaries and lifetime benefits. Work hard for a living dammit. We do.
Oakland could has so much going for it, yet the city continues to nosedive. Oakland is:
* centrally located to SF, SJ, and the rest of the Easy Bay.
* cheaper than SF or SJ (unless you live in the Hills)
* an international airport.
* an international shipping port.
* convenient BART access from SF and the East Bay
* not far from UC Berkeley.
* (somewhat) cleaner than SF.
Full disclosure: I live in Oakland, but plan to move. I was bullish on Oakland, but not its city government.
I'm sorry, but I didn't read the article. I'm just posting right now because I clicked on it accidentally for the exact same reason that I decided to quit reading Tech Crunch: there is little to no substance there, but there are tremendous amounts of gamey, overblown, linkbaiting article titles.
I'm really frustrated right now, for several reasons.
One, I know that a portion of the articles I'm scouting around for are being shoved aside to make way for these techno-celebrity gossip columns. Only so many articles can get in the top 40-50, and I only have so much time in a day.
Two, I clicked on it. Which means Tech Crunch is correct in their assessment of my interests and certain keywords that instinctively drive my click impulses.
If you're aware of a better place to discuss my dissatisfaction with a recurring news source, here, I think that, itself, would be more newsworthy than this article.
City hall and the Asian Art Museum are one block north. The opera, symphony and ballet are two blocks northwest. There are two high-rise, luxury condominium buildings directly across the street. Walk 10 minutes west, and you're smack in the middle of one of the city's up-and-coming neighborhoods (Hayes Valley), replete with boutique shopping, gourmet coffee stands and antique stores.
If offering Twitter a sweetheart lease on a gigantic building in a gentrifying urban neighborhood and giving them a tax break is enough to drive them away, then I sincerely wish Twitter luck in trying to retain their employees once they move to Brisbane. What've they got out there? A Taco Bell?