San Francisco voters overwhelmingly approved a tax measure this week penalizing large corporations whose CEOs are paid far more than their average workers. This tax is intended to close an income gap that has been widening for decades.
Proposition L – also known as “Overpaid Executive Tax” – requires San Francisco companies to pay an additional 0.1% surcharge on their annual business tax payments if their top executive earns 100 times more than their average employee.
“OVERPAID EXECUTIVE TAX” WILL BE VOTED IN SAN FRANCISCO IN NOVEMBER
The larger the gap between top management and employees, the higher the bonus. For example, if a CEO earns 200 times more than the average employee, the bonus increases to 0.2% and 300 times to 0.3%.
Critics called the bid an obvious attempt at redistributing wealth and said it was poorly timed.
“The middle of a pandemic shutdown is the wrong time to collect taxes,” said Jim Wunderman, president and CEO of the Bay Area Council corporate group.
However, the measure’s author, city overseer Matt Haney, had argued that it was a necessary step as cities across the country prepare for another surge in coronavirus cases. He noted that the move would raise over $ 140 million each year, which would allow the city to hire hundreds of nurses, doctors, and first aiders.
ULTRA-WEALTHY IN CONFIDENCE TO PLAN FOR POSSIBLE TAX HIKES
The voters were convinced. The measure was passed with more than 65% support in almost all counties, Haney said on Twitter.
The results “show that Franciscans are concerned about growing economic inequality,” Haney said on Wednesday. “The very rich win more and more. They got a lot richer during the pandemic while everyone else stagnated. “
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Over the past 30 years, according to Haney, executive salaries rose 940% while employee salaries rose only 11%.
“Prop L is an incentive for companies to invest in their people, not just their leaders,” wrote Haney.
Companies can easily avoid the tax by “simply paying their executives less or by raising their employees’ wages,” Haney added.
The Associated Press contributed to this report.
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