Twitter Tax Breaks Would Bring Millions to San Francisco, Controller Says

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Follow Twitter ... to Market Street
The city's number-crunchers today released an analysis that spins the highly criticized Twitter deal as a win for San Francisco taxpayers.

Businesses with an annual payroll expense of more than $250,000 now pay a 1.5 percent tax. Yet a break for Twitter would not only entice the company to stay, but generate as much as $54 million over 20 years, according to a new report issued by the city controller's office.

Of course, that's if the company chooses to stay and if it spawns a technology hub in the Central Market area.

The city's payroll tax has long been criticized for purportedly stunting San Francisco's business climate. Twitter tested this theory when the growing company threatened to move its headquarters from San Francisco to hip and happening Brisbane -- where it wouldn't have to shell out more in taxes.

You don't need a stable of accountants at hand to know that the move would save millions for the booming Twitter, which is now valued in excess of $7 billion.

The analysis claims Twitter would save $2.4 million by moving its headquarters to South San Francisco, another possible location the company is considering.

Supervisor Jane Kim stepped out of her progressive mold last month and proposed business-friendly legislation to try save the city from losing the microblogging giant. She rolled out a controversial deal that would give Twitter a six-year tax break on all new hires if it moves into the San Francisco Mart building at Market and 10th streets.

So Twitter would get some financial relief and San Francisco would get an anchor company to renew the dilapidated Central Market neighborhood.

Critics, namely progressives on the Board of Supervisors, have blasted the deal, calling it a sop to corporate blackmail.

Perhaps -- but it's a potentially profitable sop to corporate blackmail. Also, the handle @CorporateBlackmail is still available. Who wants it?

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Howard Epstein
Howard Epstein

Supervisor Jane Kim’s attempt to keep Twitter from leaving San Francisco through a payroll tax holiday is admirable but also short sighted. Focusing on one company, Twitter, or one geographical area of the City, the Mid-Market, does little to solve San Francisco’s unemployment or budget problems. Giving a tax holiday to any business that wants to locate or expand in San Francisco, regardless of industry or neighborhood, will produce greater rewards for the City. Lowering or abolishing the payroll tax would produce more new jobs and budget relief than a short-term tax holiday.

Richard H
Richard H

How about we just abandon the SF payroll tax along with all of our stupid, overreaching social services and create a level playing field? That way companies like Twitter can't threaten to leave. Well, that's all it is, a threat. Twitter will never leave. Don't cave in to them.

Also, I still don't think that Twitter will actually move in here.

zimmerman2000us
zimmerman2000us

It is time to stop tax breaks for the rich all over the country. Because your taxes are too high you get tax breaks to the rich. If your taxes were not too high in the first place the rich would not be moving someplace that is cheaper. There needs to be an equal rights law for all, including taxes. The federal government, state, local governments do not have a right to make unequal taxation. When you give tax breaks to the rich it is not fair to all the others.

Equal taxes for all, lower.

zimmerman2000us
zimmerman2000us

That is just like liberal Democrats. Give tax breaks to some but steal from others

h. brown
h. brown

Erin,

You're kinda anti-Progressive, huh? You didn't tell the entire story again. Or, you'd have mentioned that the deal for Twitter has been sweetened with the City offering (for FREEE!) a dedicated cop foot beat and an new bus line ... at a time when the cops are cutting foot beats and Muni is cutting service.

Today (3-16-11) at 10am, the Board's Finance and Budget will hear the billionaire giveaway proposal for Twitter (expanded into a huge swath of land - entire Tenderloin - to cover all of Shorenstein's property in that area no doubt) along with the multi-billion dollar property giveaway to Larry Ellison (Items #4 and #5 and #6).

If anyone needs tax breaks it's homeowners in danger of foreclosure. Not profitable billion dollar corporations.

Go Giants!

h.

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