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Money Talks

Jun
3
2004

The press roll out has been steady and sure – Pete Ragone displaying once again all the tricks he learned in the Old Country (Washington, D.C.) – and finally San Francisco Mayor Gavin Newsom’s budget has arrived.
In a nice bit of psychic journalism, The SF Guardian doesn’t like it sight unseen. The Ex says it’s a good start and The Chron’s Rachel Gordon, who is allowed to write about money but not marriage, sums up the cuts and tax increases.
Here’s what looks like the biggest sticking point: Extending the payroll tax to LLCs and LLPs. That’s lawyers, venture capitalists, hedge funds, CPAs and the like, big Newsom supporters all. At least one lobbyist – who heard the screeching at one big law firm – says he can see a professional corporation exodus to Oakland.
Probably not Oakland. If they go, they’ll follow the money to Silicon Valley, where office space is, for now, cheap and taxes are low. San Francisco’s more and more the bedroom community of choice for the valley; this is just another step on that ladder.
It’s another reason — as if we need one — why the state’s tax structure needs to be overhauled. Right now, San Francisco depends on tourists and businesses to pay its bills. That’s not a stable tax base; not as stable as that which would be provided by a fair and equitable property tax system. Prop. 13 doesn’t just kill schools by depriving them of property tax revenue, it set the stage for a series of municipal bidding wars — if you don’t like a payroll tax move to San Mateo! — that are as wasteful and ineffecient as the government taxing and spending that Prop. 13 was supposed to keep in check.

Share  Posted by Chris Nolan at 11:24 AM | Permalink

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