Another Take on the San Francisco Twitter Tax

http://www.futureofcapitalism.com/2011/04/another-take-on-the-san-francisco-twitter-tax

For an example of how two different news organization or two different reporters can have completely opposing takes on the same story, look at how the Associated Press handles that fight about the San Francisco payroll tax that we had an item about last week.

While the TechCrunch article we linked last week saw it as an opportunity to get rid of the payroll tax entirely and make San Francisco more competitive with Silicon Valley for job creation, the AP sees it as an opportunity to dwell on income inequality: "In the shadow of San Francisco's stately City Hall, sidewalks abound with transients, drugs and crime....progressive politicians — and now the city's largest public employee union — call the proposal a poorly crafted giveaway to the rich....some low-income residents worry that revitalization will just lead to higher rents. And city employees facing layoffs and contract concessions thanks to a massive budget shortfall resent what they see as a giveaway to venture capitalists and a bailout for landlords. 'Who are the (Twitter) investors?' Supervisor John Avalos told The San Francisco Examiner. 'Probably some of the wealthiest people in this country. And we are giving them more wealth.'"

Update: The New York Times also does the class-warfare angle on the Twitter tax, beginning its news article as follows:

In a start-up's initial public offering, a lot of people can get fabulously rich: the founders, early employees and the venture capitalists who staked the company.

Should the city where the company resides also share in the windfall? San Francisco officials had thought so.

But two of the city's hottest technology start-ups, Twitter and Zynga, are threatening to leave San Francisco unless they get a break from a city payroll tax that could, given the estimated multibillion-dollar valuations of the two companies, amount to tens of millions of dollars.

By this odd conception, the only way a city can "share in the windfall" is by imposing a payroll tax. It's as if it hasn't occurred to the New York Times that a city might benefit from a company's presence in other ways, not only via other taxes paid by its owners and employees, such as the taxes on property and sales, but by the other jobs a company creates. The company's employees go out to restaurants. If they live in the city, they may hire household employees, or buy cars, or support the city's museums or performing arts institutions.

by Ira Stoll  |  Apr 4, 2011 at 9:43 am Related Topics:  Income Inequality, Taxes receive the latest by email: subscribe to the free futureofcapitalism.com mailing list