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Tech IPOS will radically increase housing costs and inequality, report shows

April 28, 2019

By Tim Redmond : 48hills – excerpt

Tech gets big tax breaks, small businesses have to pay more — and Sup. Gordon Mar’s IPO tax plan will be a defining issue in city politics this year.

The six tech IPOs that are likely to happen in the next year could drive up housing prices as much as 11 percent – that’s $147,000 on the median house – and create even more dramatic economic inequality in San Francisco, a new city report says.

The report by the Board of Supes Budget and Legislative Analyst, was released as part of a hearing into the impact of the tech IPOs – and the information presented at that hearing spurred Sup. Gordon Mar to announce he wants to put a small tax on stock awards to help mitigate the impacts of the new wealth…

Amanda Fried, policy chief for the Treasurer’s Office, explained how the city’s tax-law changes have helped the tech sector more than any other part of the business community. Under pressure from promoters of that one industry, the city shifted from a payroll tax to a gross receipts tax – and when that happened, tech-sector companies who had been paying $190 million a year in city taxes saw their bill drop to $165 million. That’s $25 million a year, a 14 percent cut – which other businesses had to make up with higher taxes

What about Breed’s pick for the Board of Supes, Vallie Brown, who is facing a challenge from Dean Preston, who told me he supports Mar’s tax?

This could be a defining issue in local politics: Who is on the side of tech tax breaks, and who is on the side of making the newly rich companies pay just a tiny bit to address income inequality?...(more)

RELATED:
Should IPOs Be Taxed in SF? (audio track)

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