By Darren Smith, Weekend Contributor
Voters within the City of San Francisco passed Proposition L, a measure designed to tax corporations having CEO compensation in excess of 100 times the median compensation of line employees. City analysts estimate the measure would raise between sixty and one hundred million dollars per year confiscated from large for-profit companies employing over one thousand persons nationwide and having administrative offices in San Francisco.
According to the San Francisco Voter Information Pamphlet:
• For a business that pays the Gross Receipts Tax, if its Top Executive Pay is more than 100 times Employee Pay, the business would pay an additional tax from 0.1% to 0.6% of its San Francisco gross receipts.
• For a business that pays the Administrative Office Tax, if its Top Executive Pay is more than 100 times Employee Pay, the business would pay an additional tax from 0.4% to 2.4% of its San Francisco payroll expense.
The Proposition invoked from a hearing of July 28, 2020 where the Board of Supervisors voted 11 to 0 to place Proposition L on the ballot. The government wrote:
The more inequity between the top executive and their workers, the higher the surcharge. Corporations can avoid the tax by simply paying their executives less or by raising their employees’ wages.
We believe that big corporations that can afford to pay their executives million-dollar salaries every year can afford to pay their fair share in taxes to help us recover. Over the last 30 years, executive salaries in the United States have skyrocketed by 940 percent. But regular workers’ salaries have grown by just 11 percent. Prop L incentivizes companies to invest in their workers, not just their executives ~+~
That’s quite an incentive? Yes, I would agree: Laying off workers is the incentive that might actually come to mind at some companies.
