Hope Johnson.
By Hope Johnson
March 3, 2011
Silence of the Lams?
President Obama recently hit the West Coast to first fraternize with wealthy Silicon Valley tech execs from Apple, Cisco, Facebook, Genentech, Google, Netflix, Oracle, Twitter and Yahoo and to size up Intel’s semiconductor computer chip plant in Oregon.
Most speculated his agenda was economic stimulus and re-election support, but that powerful techie networking list should leave us middle-class proletariat curious if the White House really just wants “best practice” tips on shutting down the internet and social media at the same time.
When we know Congress willingly extends the Patriot Act and the military’s psychological operations unit targets senators, there’s no reason to doubt our government might resort to limiting communication among its growing number of dissenters, especially with the threat of more worker protests like those in Wisconsin and Indiana.
Social media let Egyptians share their demands for democracy even when the internet was turned off by their government. President Obama’s West Coast whirl provided him undisclosed access to the top communication gatekeepers, capable of preventing that same kind of sharing here if more of the nation’s working class “go Cairo” to protest record unemployment, rising taxes, shrinking benefits and mass housing foreclosures despite last quarter’s highest ever corporate profits.
Speaking of exploiting the middle class to cater to the wealthy. . .
Nickel and Dimed to the Twitter End
Governor Jerry Brown wants to tax you more, Senator Mark Leno wants to increase your vehicle license fee, and the President wants taxes from your unemployment check. But district Supervisors Jane Kim and David Chiu are pushing for a corporate tax break. Their divisive proposal to amend San Francisco’s Payroll Expense Tax offers a tax reduction for businesses located in the mid-Market Street area by freezing their payroll expense tax for six years.
Supporters claim the proposal is intended to encourage job creation and revitalize a blighted area. However, Supervisors Kim and Chiu, along with appointed Mayor Ed Lee, openly acknowledge the tax break was created specifically to entice social media giant Twitter to move to a building owned by a politically well-connected developer. The move would likely increase the developer’s property value.
Many oppose Kim and Chiu advocating yet another tax break for yet another super wealthy company perfectly capable of meeting its tax obligations while San Francisco struggles to maintain even basic services. The proposal decreases the city’s expected revenue over the next eight years (when the tax break expires) while intentionally increasing revenue for Twitter, a company that recently closed a $200 million deal raising its value to $3.7 billion.
Losses to the city are difficult to estimate since the proposal leaves to chance future public benefit in exchange for guaranteed private gain. The tax freeze would allow mid-Market businesses to avoid tax not only on new jobs but also on pay raises, including the now common extravagant executive salaries and bonuses. No provision requires corporations actually hire workers to be eligible for the tax break or guarantees the creation of permanent, average salary jobs instead of temporary jobs, or just one high salary executive job.
The tax break would also counteract Prop Q passed by San Francisco voters in 2008. Prop Q eliminated loopholes in the payroll expense tax, finally requiring partnerships (think large law firms) to pay the tax. Public revenue gained when voters required the taxes from these partnerships would be offset for private business benefit.
No hard evidence supports the claim corporate tax breaks create jobs. Corporations are earning record profits, plus President Obama gave them $51 billion while record unemployment continues. Supervisors Kim and Chiu are offering Twitter this tax break (introduced Feb. 8th) on jobs it was going to create anyway (announced in early January). Twitter’s need for additional worker space is the reason the company needs to relocate in the first place.
Surprisingly, the proposal could increase hardships for small business despite Chiu’s mayoral campaign statement to help small businesses. Increasing property values would force small businesses to compete under high rents. While the proposed tax break provides extra revenue for wealthy businesses to compete, small businesses were offered only low-interest loans, requiring them to go into debt if financial assistance is needed to compete. Unfortunate since small businesses are more likely to create a wider variety of working class jobs than a social media company.
Twitter’s response to the generous tax break offer was an ungrateful complaint that the payroll tax still includes a 1.5 percent tax on stock options, even though San Francisco has never enforced that tax. Plus, Twitter is complaining about a tax impossible for it to owe for six years under the proposal since Twitter’s taxes would freeze at current levels which do not include tax on stock.
Would you support a payroll tax break for Twitter if you knew its co-founder sold stock this week worth $100 million? This is greed worthy of Dante’s Fourth Circle of hell.
Gung Hay Fat Choy, taxpayers! It’s another year for the corporate raider!
Politicians must stop compromising middle-class taxpayers. This corporate tax break should be rejected outright or, for the faint of heart, revised to include guaranteed public benefits in exchange for the public revenue loss. A good start is requiring the creation of a minimum number of permanent jobs to be eligible for the tax freeze, exempting executive pay and bonuses from the proposal, and financial assistance for small businesses without loan interest debt.
Clearly, more substantive action is needed to fulfill the promise of liberty and justice for all than simply refusing to recite the pledge of allegiance.
The Hunger Site
July 25, 2011 at 11:08 am
Nice work Hope!! We should have coffee soon.
March 15, 2011 at 2:07 pm
Hope, I am glad to see that you are back in action. I have missed your posts as much as I miss you! Keep it up girl!
March 10, 2011 at 8:45 am
Hope so glad you are back. Your comments here and on other matters have been spot on. Wish we had been able to do a lunch at MoFo. Mark
March 6, 2011 at 3:53 pm
“Supporters claim the proposal is intended to…”revitalize a blighted area”…
…”the tax break was created specifically to “entice”…
What about JFK’s exhortation to “Ask not what your country can do for you, ask what you can do for your country?” Where has that line of thinking gone? Why doesn’t Twitter resolve to get in there—free from tax breaks—with the attitude that by its example and presence, others might follow, thereby revitalizing a neighborhood? Maybe it’s an attitude enabled by the deficit-thinking as well as fear-based thinking of politicians who somehow feel they have to “entice”…in order to get a company to do what it ought to be doing in the first place—contributing its fair share.
“companies are becoming increasingly agitated…” (Chron article)
“Twitter’s response to the generous tax break offer was an ungrateful complaint “…
This attitude is one of: “They want to “take” from us.” Twitter feels threatened…A wealthy company. Again, scarcity thinking. Greed. Irresponsibility in the face of what they could easily contribute to the alleviation of an economic crisis.
While corporations have made record profits over the last 30 years and yet services for a healthy-functioning community are cut as a result of this kind of thinking the problem seems to be one of morality. These are myopic policies in my view, that, if unchallenged will come back to bite us all, including the very entities that are being coddled—because we’re all connected: a deprived people promotes personal suffering which will affect the efficient running of our economy…and create a host of other ills as well…
Glad you’re speaking out on this Hope, and yay for Oregon, who indeed last year passed a bill taxing the wealthy and corporations to solve the problem of this false premise of cutting needed community services…such as an Arboretum free for all and a thriving educational system…
March 6, 2011 at 11:53 am
@bobbycoleman
Thank you!
@marc
Excellent point, especially now that the real estate deal has come full circle in true San Francisco fashion and Shorenstein Properties is purchasing the building where our politicians want Twitter to move:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/03/04/BU3G1I49VL.DTL
March 5, 2011 at 1:34 pm
Perhaps if the City Attorney moved his offices out of Fox Plaza, that might get rid of that smell that contributes in part to the area’s uninhabitability?
Then, all that would be needed to active the streetscape is to take a wrecking ball to the Merchandise Marts and Fox Plaza and replace those wind magnet towers with a built form more appropriate to one of the windiest spots in the City.
-marc
March 4, 2011 at 5:47 pm
Great to see you back in action – good job!
March 4, 2011 at 12:18 pm
@ southside local
sorry for the typo – biotech added 250 jobs
March 4, 2011 at 12:16 pm
@southside local
Which part of this is actually rhetoric and which part do you simply disagree with?
What evidence can you provide to support your idea there would be “thousands of new employees”? No provision requires any new employees or other benefit for the area which provides a guaranteed benefit for business with just the hope that they will contribute to the public which is providing them money. Again, Twitter is worth over $3.7 billion and President Obama gave corporations $51 billion yet unemployment in California is at 12.4%.
There already is an exemption citywide for biotechnology companies which has a debatable outcome (though it doesn’t expire until 2014). It has cost the city almost $2 million in revenue (again, the controller admits this is difficult to calculate) and that industry has added only about 250 in SF over seven years.
What evidence can you provide to support your idea that no businesses are trying to move there? What are the wealthy property owners doing to help?
March 4, 2011 at 11:54 am
@h
I don’t mind Twitter or anyone else keeping their own money but obviously they don’t need to be given more of ours.
@el Greco
Oh, yes, how could I be so foolish as to just bring up the idea of shutting down the internet as a topic of conversation?
No matter that our government experimented with syphillis on black men, sprayed Agent Orange on our own military, black listed actors, created secret wiretapping rooms at AT&T, funded Osama bin Laden, placed MTBE in California’s water supply, “miscalculated” diesel emissions by 346%, and killed college students at Kent State.
You are certainly welcome to create humorous scenarios about conspiracy theories in response to these incidents but it won’t make them any less true.
Yes, why should we have a conversation about open government?
March 4, 2011 at 11:39 am
This just seems a wee bit hyperbolic. I understand the principle, but its not as if businesses are fighting over each other to locate themselves in mid-market — and getting thousands of new employees in the area is absolutely necessary (but not sufficient) for helping the neighborhood.
If this were city-wide (and not replaced by some other form of business tax), then this kind of rhetoric would be justified. But, there is a clear goal here and it makes sense.
March 4, 2011 at 7:09 am
There’s even more to the Obama/Silicon Valley dinner meeting than that, Hope!
Yes, Mark Zuckerberg and Larry Ellison (they’re co-developing Wii America’s Cup to reap more filthy gains from America’s adolescents) showed Obama exactly where the big Internet on-off switch is! They even let the President jiggle the switch a little bit, causing Charlie Sheen’s YouTube video to be unavailable for about 15 minutes! In return, Obama introduced them to Dr Strangelove, who gave Zuckerberg and Ellison the secret code that initiates the Doomsday Machine!
Thank goodness, you uncovered this nefarious scheme!
March 3, 2011 at 8:22 am
Great column!
Welcome back, Hope. We haven’t been blessed with one of your efforts for awhile now and it’s good to hear the rumbling of your thunder and see the flashing of your lightning bolts. So to speak.
How’s Kim feel about the Star Spangled Banner? The Board could drop the pledge of allegiance and have Walter Paulson open every Full Board meeting by singing it? Might make O’Reilly.
Here’s an idea for solving the economic crisis:
Take a page out of our fearless leader, Barrack Obama’s playbook and Freeze the Assets of the super rich. Then, redistribute them. Of course, you start by properly funding all of the workers pension funds and paying health care costs for everyone in the country?
Go Giants!
h.