Tech ti­tans in tweet dustup over Prop. C

Dorsey, Be­nioff clash on S.F. home­less ini­tia­tive

San Francisco Chronicle Late Edition - - FRONT PAGE - By Melia Rus­sell

Two San Fran­cisco tech moguls worth $12 bil­lion be­tween them got into a heated ex­change of tweets Fri­day over a city bal­lot mea­sure aimed at end­ing home­less­ness.

Jack Dorsey, the head of Square and Twit­ter, took to the so­cial app he runs to ex­press his op­po­si­tion to Propo­si­tion C, draw­ing ire from its most vo­cal sup­porter, Sales­force chief Marc Be­nioff.

Prop. C, which ap­pears on the Nov. 6 bal­lot, would tax the big­gest busi­nesses in San Fran­cisco to raise as much as $300 mil­lion for home­less pro­grams.

Be­nioff on Mon­day came out strong for Prop. C, pledg­ing at least $2 mil­lion of com­pany money and his per­sonal for­tune to help pass the ini­tia­tive.

“I want to help fix the home­less prob­lem in SF and Cal­i­for­nia. I don’t be­lieve this (Prop C) is the best way to do it,” Dorsey tweeted, in­clud­ing a link to an ear­lier tweet by Be­nioff

about his own sup­port for the mea­sure.

Be­nioff re­sponded: “Hi Jack. Thanks for the feed­back. Which home­less pro­grams in our city are you sup­port­ing?”

The Sales­force co-CEO then asked Dorsey on Twit­ter how much money he’s do­nated to the $37 mil­lion, 2-year-old Hamil­ton Fam­i­lies Head­ing Home Cam­paign, which Be­nioff helped start with the city for hous­ing home­less fam­i­lies. The pro­gram has housed nearly 400 fam­i­lies through rent sub­si­dies.

Be­nioff noted Dorsey’s es­ti­mated net worth of $6 bil­lion — Be­nioff ’s for­tune is be­lieved to be around that range as well — and asked how much he has given.

“Ex­actly (how) much have his com­pa­nies & per­son­ally given back to our city, our home­less pro­grams, pub­lic hos­pi­tals, & pub­lic schools?” Be­nioff tweeted.

Sev­eral hours later, Dorsey re­sponded: “Marc: you’re dis­tract­ing. This is about me sup­port­ing Mayor @Lon­donBreed for *the* rea­son she was elected. The Mayor doesn’t sup­port Prop C, and we should lis­ten to her.”

The ex­change seemed heated, but Be­nioff says he and Dorsey are friends.

“My re­ac­tion was that this was giv­ing me a great op­por­tu­nity to tell my story,” Be­nioff said. Of Dorsey, he said, “I just saw him at the War­riors fi­nals. If you can’t ask your friends hard ques­tions, are you re­ally friends?”

Be­nioff, who has do­nated mil­lions of dol­lars to house home­less fam­i­lies and strongly ad­vo­cated for more street pro­grams, told The Chron­i­cle on Mon­day that the only way to sig­nif­i­cantly re­duce the cri­sis of 7,500 in­di­vid­u­als and 1,200 fam­i­lies lan­guish­ing in the streets is to scale up govern­ment spend­ing. Prop. C would gen­er­ate an amount of fund­ing that about dou­bles what San Fran­cisco al­ready spends to as­sist home­less peo­ple and keep them housed.

Af­ter an­nounc­ing his sup­port, celebri­ties in­clud­ing Chris Rock, Jewel and William James Adams Jr., known pro­fes­sion­ally as, ral­lied around Be­nioff on Twit­ter.

Op­po­si­tion to Prop. C picked up mo­men­tum in Oc­to­ber when Breed, state Sen. Scott Wiener, D-San Fran­cisco, and Assem­bly­man David Chiu, D-San Fran­cisco, said in state­ments that there isn’t enough ac­count­abil­ity in the mea­sure to en­sure funds would be prop­erly spent. But Be­nioff, whose Sales­force is the city’s largest pri­vate em­ployer and projects ap­prox­i­mately $13 bil­lion in rev­enue this year, said he thinks he can per­suade other big-busi­ness lead­ers to show sup­port.

On Twit­ter, Dorsey said he sup­ported Breed and Wiener’s stance on the is­sue, as well as their “com­mit­ment” to ad­dress­ing the home­less­ness cri­sis “in the right way.”

“Mayor Breed was elected to fix this,” Dorsey tweeted. “I trust her.”

Be­nioff said Breed had called him Fri­day to dis­cuss the prospect of him giv­ing $8 mil­lion per­son­ally to fund a home­less shel­ter. The mayor’s of­fice said there had been dis­cus­sion but would not con­firm de­tails.

In re­sponse to Dorsey’s orig­i­nal tweet, more than 100 peo­ple posted replies to crit­i­cize his po­si­tion. Some peo­ple called into ques­tion the tech bil­lion­aire’s mo­tives for op­po­si­tion.

Also known as the “Our City, Our Home” ini­tia­tive, Prop. C would im­pose an ad­di­tional gross re­ceipts tax of about 0.5 per­cent on cor­po­rate rev­enue above $50 mil­lion. A re­port by the city’s Of­fice of Eco­nomic Anal­y­sis con­cluded that 300 to 400 of the largest busi­nesses in San Fran­cisco would pay the tax.

A pay­roll tax break for com­pa­nies in the Mid-Mar­ket area known as the “Twit­ter tax break” is set to ex­pire in May. While Twit­ter has taken ad­van­tage of that break on the pay­roll tax — a fact Be­nioff pointed out on Twit­ter — Square, which is out­side of the des­ig­nated area, has not.

Twit­ter de­clined to com­ment.

A Square spokesman noted that a quirk of the gross re­ceipts tax could dis­pro­por­tion­ately harm it and other San Fran­cisco pay­ments com­pa­nies like Stripe. When a re­tailer uses Square to process a credit card trans­ac­tion, Square col­lects a 2.75 per­cent fee. For a given sale, San Fran­cisco could col­lect the gross re­ceipts tax twice — on the orig­i­nal pur­chase and on Square’s fee.

“Home­less­ness in San Fran­cisco is a hu­man­i­tar­ian cri­sis,” Square said. “We are eager to col­lab­o­rate with City Hall, lo­cal or­ga­ni­za­tions, other busi­nesses on a uni­fied ap­proach to this is­sue. Prop. C is not that ap­proach.”

Greg La Blanc, a lec­turer at UC Berke­ley’s Haas School of Busi­ness, said he can un­der­stand why San Fran­cisco com­pa­nies that process lots of trans­ac­tions, like Airbnb or Square, are wor­ried about the im­pli­ca­tions of the tax.

Those com­pa­nies have “taken the risk of lo­cat­ing in that area and plant­ing their flag right smack in the mid­dle of all these home­less peo­ple,” said La Blanc. Square may “see them­selves as a tar­get” if the city moves to tax its big­gest busi­nesses to “take care of this” is­sue.

Amanda Fried of the city’s Of­fice of the Trea­surer and Tax Col­lec­tor said she can’t com­ment on a par­tic­u­lar tax­payer’s obli­ga­tions. Gen­er­ally speak­ing, busi­nesses that process a pay­ment be­tween third par­ties do not need to in­clude the full amount of a trans­ac­tion in their gross re­ceipts but may owe tax on a “lesser amount,” she said.

Stripe has do­nated $19,999 to the Cham­ber of Com­merce’s “No on Prop. C” cam­paign; its gen­eral coun­sel, Jon Zieger, wrote an opin­ion piece in The Chron­i­cle urg­ing a no vote on the mea­sure.

Stripe CEO Patrick Col­li­son said in a tweet he sup­ports Dorsey. Dorsey retweeted Col­li­son’s tweet, broad­cast­ing it to his 4.1 mil­lion fol­low­ers.

Be­nioff noted that Stripe had re­cently been val­ued by in­vestors at $20 bil­lion. Col­li­son and his brother, John, re­port­edly own nearly a quar­ter of the com­pany, mak­ing their stake worth bil­lions.

“The first day we started Sales­force, we com­mit­ted 1 per­cent of our eq­uity, time and prod­uct,” Be­nioff said, not­ing a pledge the com­pany had made to do­nate shares and soft­ware and com­mit em­ploy­ees’ vol­un­teer time.

Gensler, a San Fran­cisco de­sign and ar­chi­tec­ture firm, last month do­nated $10,000 to the “No on Prop. C” ef­fort.

Later on Fri­day, Be­nioff tweeted, “If you’re go­ing to fight a rel­a­tively small tax, which is one half of one per­cent to help our num­ber 1 is­sue, then you bet­ter be pre­pared to talk about what you are do­ing ver­sus what you don’t want to do.” San Fran­cisco Chron­i­cle busi­ness ed­i­tor Owen Thomas and staff writer Do­minic Fra­cassa con­trib­uted to this re­port.

Drew An­gerer / Getty Im­ages

Jack Dorsey, the head of Square and Twit­ter, left, op­poses Prop. C, which Sales­force chief Marc Be­nioff sup­ports. The mea­sure would tax big busi­nesses in S.F. to fight home­less­ness.

Gabrielle Lurie / The Chron­i­cle

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