Mountain View ‘Google tax’ plan advances to City Council

MOUNTAIN VIEW >> Plans for a “Google headcount tax” moved ahead Wednesday in Mountain View after a municipal panel recommended that the full city council approve the proposal.

A three-member subcommittee of the Mountain View City Council endorsed the concept on Wednesday of a tax on the number of workers a company employs within the city limits, although government officials refer to it formally as a “restructuring” of the business license tax.

The Mountain View City Council is scheduled to meet June 5 to make a final decision on whether it will order the city staff to prepare a ballot measure for voters to approve or reject in November.

“When you think of the six-figure incomes that tech companies pay their employees, a tax of $200 per employee doesn’t seem to be that much more to pay,” Mountain View City Councilman John McAlister, a subcommittee member, said Wednesday.

It’s anticipated the maximum amount required from the largest employer in Mountain View — Google — would be roughly $5.5 million in the first year the new employee headcount tax would take effect. Councilman McAlister said the amounts that businesses would pay could rise over time due to inflation.

“A jobs tax tends to discourage job growth,” said Carl Guardino, president of the Silicon Valley Leadership Group, a consortium of businesses and other organizations in the region.

Still, Mountain View officials believe they have little choice but to act to impose such a tax when confronted with a ballooning array of forbidding challenges such as traffic woes and housing costs.

“We need to reduce greenhouse gases, improve the quality of life, cut traffic out of local neighborhoods,” McAlister said. “We need

to do it locally because of all the demands from the region for state and federal funds to pay for transportation projects.”

Raising taxes on employers is a policy that bears risks, however.

Seattle-based Amazon suspended plans for a new office pending the outcome of negotiations with municipal officials for an employee headcount tax in that city. After the city approved a much smaller tax, Amazon said it will proceed with the building, but it remains “very apprehensive” about its future in Seattle.

Cupertino officials are pondering a similar tax increase to what’s on the table in Mountain View.

“Cities are saying in essence that they don’t value those company jobs as much as they value higher taxes, and employers will have to determine whether or not the new taxes are a tipping point,” Guardino said.