A solid tax plan

Devising a better tax system takes patience, buyin from interest groups and widespread public support. San Francisco voters saw those qualities in backing Proposition F, a balanced plan to widen business taxes and head off an enormous budget hole.

The measure weans the city off a payroll tax that discourages hiring and shifts levies to gross receipts, a better measure of business scale. It exempts small businesses and will be phased in to ease the pain during an epic economic downturn. Also of note: Both Mayor London Breed and her progressive foes on the Board of Supervisors are on board with the overhaul.

The business tax shift was years in the making, but timing is everything. The financial slam from the viral pandemic is producing a $ 1.5 billion future shortfall. The business tax boost embodied in Prop. F is part of the city’s strategy in plugging that looming gap. The approval by a 2 to 1 margin adds a layer of legal protection from challenges to its legality.

The measure comes with protections that will serve the city well. Hardhit businesses such as restaurants, retail shops and hotels will get a pass for the time being.

The city’s wobbly finances and serious needs generated two other tax measures of dubious value. A transfer tax on $ 10 million property sales will push the levy, already the highest in the state, to a new level. It may sound like a mansion tax, but it could chill land sales and add another cost on housing development.

Voters also went for the gimmicky Proposition L, which imposes a fee on companies with a top executive who earns more than 100 times the median of its San Franciscobased employees. That’s no inducement to locate here or stay put.

San Francisco took a major step in fortifying its finances with a business tax shift. The city should hope that change will more than make up for the distraction of two other tax boosts that aren’t needed.