San Francisco voters passed Proposition C yesterday with a 60% majority, Recode reports.
The proposition establishes a tax between 0.175% and 0.69% on the gross income of businesses reporting over $50 million in annual turnover, along with a 1.5% payroll tax for certain companies with $1 billion in turnover to fund housing and homeless services. The city predicts it will generate between $250 million and $300 million to help needy causes.
It already set off a multi-million dollar funding battle among tech titans: Salesforce CEO Mark Benioff and Twitter CEO Jack Dorsey exchanged barbed tweets and campaign contributions in the lead-up. Executives at Lyft, Stripe, Sequoia Capital, and others either donated or spoke out against the tax.
San Francisco’s own mayor, London Breed, opposed the measure, which puts her in charge of a fund, alongside a board of supervisors. Coins2Day’s own Adam Lashinsky wrung his hands last week over how best to help San Francisco’s homeless.
Since the tax hits turnover, not profits, companies with tighter margins will suffer more. Perhaps 400 businesses will be affected by the new tax, Bloomberg reports. Many of those companies, including Twitter, had negotiated tax breaks when they set up shop in San Francisco. Twitter’s is worth $22 million, according to CNET.
San Francisco’s homeless population was last counted at around 7,500 people and perhaps 20,000 people used the city’s homeless services over the course of the year, at a cost of around $380 million. The controller’s office estimated that Proposition C could add $60-75 million a year to that amount, the San Francisco Public Press reports.