Tech titans clash over new business tax to help homeless
A ‘‘homeless tax’’ that will hit some of the biggest technology companies and raise US$300 million (NZ$444m) to help those sleeping on the streets has caused deep divisions within Silicon Valley.
San Francisco has one of the worst problems with homelessness in the US. Residents face mentally ill people shouting on the streets, addicts openly injecting heroin, piles of excrement between parked cars and rows of homeless people sleeping in tents.
Such human suffering jars against a city that has enjoyed a tech-fuelled boom in wealth, with 70 billionaires, and an average house price of US$1.6m.
Supporters of the tax said that it would raise US$75m a year for mental health services and add 1000 beds in homeless shelters.
Voters approved the measure, much to the disappointment of the tech companies and venture capitalists based in San Francisco who had poured thousands of dollars into fighting the tax. They include Twitter, Visa, the payment processing platform Stripe and Lyft, the taxi company.
The tax, called Proposition C, will raise an estimated US$300m a year for services that will help the 7500 people a night who sleep on the streets of the city, population 885,000, boosting spending on homelessness by 80 per cent. The levy averages 0.5 per cent of the gross receipts of businesses with revenues of more than US$50m.
Tech company chiefs have argued that San Francisco already spends more per head on homelessness than other cities. Mark Pincus, co-founder of Zynga, the mobile games developer, who is worth US$1.5 billion, called it ‘‘the dumbest, least thought-out prop ever’’. Jack Dorsey, Twitter’s chief executive who is worth an estimated US$5.4b, had donated US$125,000 to fighting the tax and made a veiled threat that another of his businesses, the payment processing company Square, would leave the city if the tax were passed.
‘‘We’re happy to pay our taxes. We just want to be treated fairly with respect to our peer companies,’’ he wrote on Twitter. ‘‘Otherwise we don’t know how to practically grow in the city. That’s heartbreaking for us as we love SF [San Francisco] and want to continue to help build it.’’
Marc Benioff, chief executive of the cloud-based software company Salesforce, has been a supporter of Proposition C, putting millions of his own money into supporting the campaign.
He has clashed with Dorsey on
‘‘We’re happy to pay our taxes. We just want to be treated fairly with respect to our peer companies.’’
Jack Dorsey, Twitter chief executive
Twitter, pointing out that the social media platform has received tax breaks from the city since 2011, and added: ‘‘Exactly how much have his companies & personally given back to our city, our homeless programmes, public hospitals, & public schools?’’
After the vote, Benioff said: ‘‘Let the city come together in love for those who need it most!’’
However, the measure passed by 60 per cent, less than the two-thirds majority needed to guarantee its adoption, leaving it open to a legal challenge.
Stormy Nichole Day, left, sits on a sidewalk on Haight St with Nord (last name not given) and his dog Hobo while interviewed about being homeless in San Francisco.
A San Francisco city worker tells a homeless man that the area next to him is about to be power washed and points to an area where he might want to move.