San Francisco Looks To Tax Tax-Dodging Tech Companies

All of us suffer consequences when corporations cheat. Silicon Valley’s tech companies make a lot of money, but many of them dodge paying taxes. San Francisco is going to try to do something about it. Three supervisors are proposing that the city tax tech companies to help pay the costs these companies impose on the city.

Silicon Valley housing costs have skyrocketed thanks to the high salaries and stock options tech companies pay to attract skilled workers. In San Francisco and much of the area, the median rent for a one-bedroom apartment is over $3,500. The median home sells for over $1 million. This has pushed many long-term residents to the edge of or even into, homelessness.

San Francisco is a mecca for young, affluent tech workers. In some areas of San Francisco the streets are lines with sidewalk restaurants, brewpubs, great shops, all the things that make an urban environment a fun place to be. In other parts of the city the streets are literally lined with homeless people, many pushed out by the lack of housing that people making only double or triple the national median income can afford.

The Tax

Three supervisors have proposed a ballot proposal to approve a 1.5 percent payroll tax on “tech companies” with more than one million dollars in gross revenue. This would raise around $115 million annually for the city, which would go to homelessness programs and affordable housing projects. Also in the proposal as many as 75,000 small businesses would have their business registration fee cut in half.

Thomas Fuller Reports in The New York Times, in “San Francisco Considers Tax on Tech Companies to Pay for Boom’s Downside“:

Eric Mar, a member of the city’s Board of Supervisors, announced the proposal last week for a 1.5 percent payroll tax that would serve as a form of indemnification for what he described as the downside of the technology boom.

Tech companies have been “a tremendous benefit to the city in many ways,” Mr. Mar said. “But I don’t think they’ve been paying their fair share.”

The proposal for what has become known as the tech tax comes as officials struggle to fill growing gaps in the city budget. Money from the tech tax would go toward paying for programs for the homeless and the housing “affordability crisis,” Mr. Mar said.

Opponents say it is hard to define what a “tech company” is. But according to SFGate’s Emily Green:

The measure identifies tech companies by the type of tax code they use under the Internal Revenue Service’s North American Industry Classification System. Companies classify themselves. They may face penalties if a government audit finds they are misidentifying themselves.

Community Groups Back Tax

The community groups backing the tax include:

Causa Justa/Just Cause, “a multiracial, grassroots organization building community leadership to achieve justice for low-income San Francisco and Oakland residents. … [W]e are a force for justice and unity among Black and Brown communities. … We provide tenant rights advocacy and information to tenants through our Housing Committee/Tenants’ Rights Clinic. We build our membership through recruitment in the tenants’ rights clinics and through neighborhood door knocking and outreach. We fight grassroots campaigns to win immigrant rights and housing rights and work toward building a larger movement for social transformation.

San Francisco Rising, which organizes “in African-American, Latino and Asian/Pacific Islander communities in San Francisco. … [T]he members of SFR seek to build a new, community-based political infrastructure and to make lasting change on a broad set of issues impacting their communities.”

Jobs with Justice, which “believes that all workers should have collective bargaining rights, employment security and a decent standard of living within an economy that works for everyone. We bring together labor, community, student, and faith voices at the national and local levels to win improvements in people’s lives and shape the public discourse on workers’ rights and the economy.”

The Coalition on Homelessness “brings together homeless folks, front-line service providers, and their allies to build a San Francisco that everyone can call home. We are working every day to expand access to housing in one of the richest cities in the country, protect the rights of the poorest people on our streets, and to address the root causes of homelessness and poverty.”

Tax-Dodging And Extortion

Many of the giant tech companies use various schemes to dodge paying their taxes. Apple, for example, pretends that an Irish subsidiary owns the “intellectual property” behind the company’s products, and this subsidiary charges high fees, so Apple’s profits are in Ireland. This enables Apple to dodge paying U.S. taxes. Apple also pretends that it is based in a mailbox in Nevada to avoid paying corporate taxes in California. Google, for example, notoriously makes billions of dollars of profits in low-population Bermuda.

On top of tax dodging, tech (and other) companies often extort local tax breaks. Twitter, for example, extorted millions in tax breaks from San Francisco by threatening to leave the city. SFGate explains Twitter’s tax break, in “Companies avoid $34M in city taxes thanks to ‘Twitter tax break’,”

Businesses in San Francisco’s Mid-Market district skirted nearly $34 million in city payroll taxes last year thanks to a controversial incentive program known as the “Twitter tax break” intended to keep tech firms from fleeing for Silicon Valley.

That sum, published in a report released Monday by the San Francisco Controller’s Office, increased by about $30 million from 2013 and is five times greater than the amount of taxes companies avoided in the two previous years combined.

The aforementioned New York Times report explained what Twitter did to get this: “Twitter received the tax breaks after threatening to leave the city, creating resentment among tech companies in other parts of the city that did not get such incentives.”

Opponents are also using extortion to fight the proposed “tech tax,” calling it a “job-killer.” They say the small payroll tax will cause companies to pack up and leave the city so the city has to give in (a.k.a extortion). But the reality is these companies are desperate to bring in tech-skilled employees. So tech companies offer many perks to attract tech-trained employees. Aside from very high pay, employees get free lunches, snacks and beverages. At many companies even dinner is free. They get child care. They get stock options and generous benefit packages. Some even offer backrubs and yoga classes.

One of the biggest perks a tech company can offer is being located in San Francisco itself, instead of having to use their private bus network to bring employees from San Francisco.

Private bus networks? What? The February 2015 post, “Tax Scams, Google Buses Mean Silicon Valley Is #StuckInTraffic” explained:

The traffic in Silicon Valley is absolutely terrible. We the People sit in traffic, with few alternatives. The Caltrain line that runs between San Jose and San Francisco is standing room only during the hours people are trying to get to work. The Bay Area Rapid Transit (BART) rail system doesn’t go where it needs to go, and its parking lots are full where there are stations further north. Light rail is limited. The bus system is a few buses on a few of the main roads.

… But companies like Google, Facebook, Apple and others have built their own private bus lines. These are mostly shiny, white luxury buses that bring employees to work and take them home. Locally, we call them all “Google Buses.” There have even been protests because these buses bring affluent tech employees up to San Francisco neighborhoods, causing rents to soar.

There’s a relationship between those “Google Buses” and the rest of us sitting still, stuck in traffic.

Why can’t we afford to maintain our 1970s-level public transportation system? (Never mind bringing it into the 21st century.) Where did the money go? You’ve heard about companies like Apple using schemes and scams like the “Double-Irish With a Dutch Sandwich” to dodge paying taxes. Remember when an Apple executive said to The New York Times that these tax scams are just fine, because giant multinationals “don’t have an obligation to solve America’s problems.”

Commuters sit in traffic jams because tax-dodging corporations are not helping pay for transportation options. Meanwhile those companies use their tax-dodger money for beautiful, modern private transportation “Google bus” systems for themselves. They extort tax breaks. They externalize problems onto communities and offer little help – because giant multinationals “don’t have an obligation to solve America’s problems.”

Warning Shot

This proposal needs six of the eleven members of the Board of Supervisors to get on the November ballot, which is unlikely. The measure singles out “tech” companies and not others, and only those based in San Francisco. Giant companies like Facebook, Google, Apple and others are not based in San Francisco, but they deliver their high-paid employees to San Francisco’s housing market in their private bus networks.

This modest, local tax is not likely to pass, but should serve as a warning shot to giant companies – whether defined as tech companies or not – that people and communities are more than fed up with their tax dodging and their ducking responsibility for their practices.


This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progressive Breakfast.

Windows 10 Doesn’t Work

Here are my experiences with Windows 10 so far.

1) After a few days it started saying it wasn’t “activated. Some of the things you can usually do stopped working, like personalization. There was nothing I could do. I managed to find a phone number (!), Microsoft support told me I have to reinstall the Windows 7 that came with the computer (not 8) and then update to 10 again. Of course this involves first backing up all my files, and then finding the CDs and reinstalling all my apps, etc. (Note that the place where it says you can revert back to Windows 8 did not work even though it has been less than a month.)

2) Skype doesn’t work. At first it just wouldn’t quit no matter what without a restart. After a while it started not opening much of the time. Then crashing on opening. I could get it to work one out of 4 tries. But then it started crashing during calls.

3) OneDrive decided it isn’t installed anymore, keeps saying install me, won’t install.

4) Here’s the big one. All of a sudden all of my files are “read only.” They can’t be changed back. So I can’t run things like Quicken at all.

5) And now Windows itself just crashes spontaneously, even if the only thing I’m using is Solitaire.

Good thing I have been switching over to a Chromebook. But all my files, Skype and Quicken…

Note – post updated to add the part about Onedrive.

WTF Apple?!

So my wife uses a Mac. She gets the new OSX update, and it REPLACED iPhoto with a different program that doesn’t do the same things. “Events” appears to be gone.

I go online and Apple proudly proclaims it’s “Your entire photo collection. Framed in a whole new way.”

Great. Have to learn an entirely new interface, etc. Functionality is different. Great.

Also it crashed twice already.

So I am starting to learn how to use it. It is obvious that it is all about moving you to iCloud — which Apple charges to use.

It’s like how Microsoft decided everyone in the PC world now has to learn an entirely new way to interact with their computers — as if they are tablets — with Windows 8. Great.

Like I said earlier, I have said goodbye to my iPhone, and have a Chromebook. The Chromebook is slowly replacing everything I do on my Windows computer.

Goodbye iPhone!

I installed the new iOS 8.3. The next day I get a message that there is not enough room in iCloud to back up the iPhone and I need to PURCHASE more room.

So I went right out and bought the new Samsung Galaxy 6.

I have the Nexus 7 tablet, and that got me into Android. I use GMail, Google Calendar, etc. I’m in the Google ecosystem and no longer use Apple’s. I even have a Chromebook. So what the hell. I took the leap and this Galaxy 6 is a wonderful device. (But the camera is too wide-angle, and distorts a lot.)

The iPhone 6 and 6 Plus are beautiful hardware but buggy software that seems entirely about finding ways to pay Apple, so goodbye.

I still haven’t figured out iCloud.

iOS8 Works Fine On iPhone 5 – Upgrade Recommended

I upgraded my iPhone 5 to iOS8 yesterday. Everything looks fine, works fine.

There was just one glitch, automatic brightness is too dark, very hard to see the screen. I turned it off, upped the brightness, then turned off and on, then reset (hold down power and ‘home’ button at the same time until it restarts.) This seems to have fixed it.

The changes to the keyboard are GREAT!

So for at least iPhone 5 and newer, I recommend upgrading. Because what I say matters so much.

Ford C-Max Is Awesome

I bought a C-Max Hybrid in May. I have had it for a few months and I love this car, so I’m writing this review about it.

I had a 2000 Honda Accord and it was losing its reliability. I spent a lot of time researching cars. (My wife was finally saying “Jeeze, just buy a car already, I don’t care anymore, just buy any car and get it over with.”)

Before trying the C-Max I researched and drove (and rented when I could) Ford Focus & Fusion, Honda Accord, Chevy Malibu, Chevy Volt, Toyota Prius and Toyota Camry. My favorite of those was the Volt but it was more expensive and my wife wasn’t as enthusiastic. I also liked the Accord.

The Fusion was nice but oddly my wife could barely see out of the passenger window and there were no options for raising the seat. (She is not short.) After driving the Fusion the salesperson suggested trying a C-Max — otherwise I would not have thought of it and hadn’t really even heard of it. This is when I discovered the C-Max, and both my wife and I loved it.

Gas Mileage

Even though I liked the Accord, I finally decided to buy either a hybrid like the Prius or a plug-in like the Volt or Ford’s Energi. (Notes: 1) I vastly prefer the C-Max now that I have been driving it. 2) Honda’s Accord Hybrid and plug-in Hybrid weren’t readily available yet and more expensive than they should be.) I’m just sick of being so dependent on the oil companies, shelling out huge amounts of $$ every time I fill up and filling up so often. I didn’t want a pure EV like the Leaf because of range. I want the freedom to take longer trips without renting a car. But the plug-in Energi didn’t work for me for a few reasons. (I am starting to regret the decision to just go hybrid.)
Continue reading

More Yahoo Trouble

Recently in the post Avoid Yahoo I wrote about how Yahoo treats their customers. (Hint: terribly.)

I’m just trying to gain access to a control panel for a domain registered at Yahoo years ago. Yahoo “lost” the info about how to access it. This is done through Yahoo Small Business.

Emails get nowhere, and they ask you to call. But a call involves a promised wait of at least half an hour. I tried and gave up several times, including at 1am on a Saturday morning and again Sunday at that time.

So I gave up because of time, and am trying again. I have been holding 45 minutes so far.

Here’s the thing. THEY don’t know why I am calling, they just know that one of their “Small Business” customers needs help. 45 minute wait time SO FAR with no end in sight.

I’ll keep you posted, but obviously never, ever, ever do any kind of business with this company.

Update – been on hold for an hour now…

Update – 1 hour 7 min, reached a support rep. I ended up having to PAY YAHOO to get access to the control panel for this already-owned domain.

Avoid Yahoo

Avoid Yahoo. I just have to say it. I’m helping someone try to get access to a domain they registered at Yahoo a few years ago, still registered there but they “lost” the info about how to access it to change things…

Yahoo is “saving money.” Like so many tech companies they pretty much offer no custmer support. It’s terrible. They have automated everything and you just can’t get anything done.

Called, I get “your estimated wait time is over 30 minutes.”


So people, avoid Yahoo. Don’t do anything with that company. Seriously.

Congratulations China!

China has soft-landed a probe on the moon, named the Chang’e 3 lander, and it has successfully deployed a rover named Yutu. This is a big deal. Congratulations.

This is the first moon landing since 1976.

The moon has no atmosphere, so a lander has to use rockets. This is a big technical achievement. China hopes to have a base on the moon in the 2020s.

iOS7 Not For People Over 40

If you have to use glasses to read, then the new iPhone OS is not for you. They made all kinds of things too small to read (or even to see in many cases), especially in the Music app. I’d guess that Apple has too few people over 40 to tell them this.

PS To second comment: I started one of the first Mac software companies.