Why are businesses leaving San Fran—along with productive people? A crazy tax can explain it. Literally, the goal of this tax is to have mediocre people run companies in San Fran.
“The city of San Francisco took in $206 million in fiscal year 2023 based on a new tax that penalized private businesses who it was determined had “overpaid” its executives.
The Overpaid Executive Tax was approved by voters on Nov. 3, 2020 and became effective Jan. 1, 2022.
Under the scam, even if the employee does not work in the City, the company gets taxed. So, the best and brightest will work for another firm—outside the city. That leaves behind the mediocre—a great want to kill companies and the City.
San Francisco’s new tax on ‘overpaid executives’ brought in $206 million in 2023
By Tom Gantert | The Center Square, 1/11/24 https://www.thecentersquare.com/california/article_7629c9a2-b0c6-11ee-ada6-43264075afa9.html?a?utm_source=thecentersquare.com&utm_campaign=%2Fnewsletters%2Flists%2Ft2%2Fcalifornia%2F&utm_medium=email&utm_content=headline
(The Center Square) – The city of San Francisco took in $206 million in fiscal year 2023 based on a new tax that penalized private businesses who it was determined had “overpaid” its executives.
The Overpaid Executive Tax was approved by voters on Nov. 3, 2020 and became effective Jan. 1, 2022.
The city’s recently released audited budget stated that 2022-23 was the first year the tax was collected.
The Overpaid Executive Tax imposes a gross receipts tax on businesses in which the highest-paid employees – even outside city limits – earns more than 100 times the median compensation of that company’s employees.
The higher the gap between the top-paid executive and the company’s median salary for employees, the higher the tax rate.
Certain non-profits as well as banks and insurance companies are exempt from the tax.
The city provided an example of how the tax works. A company that had just over 1,100 employees who had a median compensation of $50,000 and whose CEO made $8 million. That company had gross receipts of $36 million. The Overpaid Executive Tax would be $36,000.
