CEO pay ratio tax
Would lose 615 jobs and disproportionately impact retail trade, not tech.
Prop L would assess additional gross receipts taxes to firms whose top-paid employee is paid at least 100 times the median San Francisco employee. The additional rate rises with the rate, with the top rate kicking in at a ratio of 600:1. For firms with only administrative offices in San Francisco—offices defined by the treasurer as those without “sales personnel or personnel actively engaged in marketing, research and development, direct customer service, and product support services”—the new tax is assessed on payroll rather than gross receipts.
The city economist’s report found that the tax would have the following effects:
- Add $60 million to $140 million in annual tax revenue (1-2 percent of the General Fund)
- Lose the city 615 employees (0.06 percent), most significantly in retail trade, financial services, and accommodations
- Reduce GDP by $60 million (0.03 percent)
While it’s temperamentally targeted toward tech companies, the retail trade sector would be the most disproportionately impacted, paying 23 percent of the tax while making up 7 percent of current employment.