We’re exactly one / less than a week away from election day. San Francisco voters are being asked to decide whether or not to leverage a new tax on “overpaid” CEOs. KALW’s Wren Farrell has more.
There’s been a fierce battle over Prop D, also known as the Overpaid CEO Tax.
Mayor Daniel Lurie, and other opponents, say that it will drive businesses out of San Francisco, and slow down the city’s so-called “comeback.”
“Prop D threatens our recovery. … When we push businesses out, we lose the revenue that pays for what every San Franciscan depends on; Muni, our parks, clean streets, first responders, our incredible libraries. Long-term, that means a bigger deficit and cuts to services.
But supporters of the measure say that it’s just common sense in a city with one of the highest concentrations of billionaires in the world.
So, what will Prop D actually do?
“What Proposition D would do is give very large corporations a choice.”
That’s Sarah Anderson, the executive compensation expert at the Institute for Policy Studies.
“They could either narrow the gaps between their CEO pay and their median worker pay to a reasonable level, no more than 100 to one, and then they wouldn't owe an extra dime in taxes.”
Or they can pay an additional tax which would go into the city’s general fund, and could generate more than 300 million dollars a year. Supporters of the measure say it would actually restore public services that were lost to corporate tax breaks.
Portland, Oregon passed a very similar tax in 2016. Anderson says there’s no evidence that it hurt Portland's economy, or made companies leave.
“It's the workers who are having to leave because they can't afford to live in these places.”
Anderson also pointed out that from 2022 to 2024, San Francisco had an overpaid CEO tax. It was overhauled when voters passed measure M, but…
“During those, that, that period between 2022 and 2024, um, the revenue was very, um, consistent. Y- they didn't see any exodus of companies. They didn't see any noticeable rise in, in consumer prices.”
Perhaps unsurprisingly, some of San Francisco’s wealthiest individuals and corporations have donated huge sums of money to the “No on D” campaign.
More than six million dollars have been raised so far. Notable donors include billionaire Michael Moritz, who owns the San Francisco Standard, billionaire Chris Larsen, who founded Ripple, billionaire Brin Sergey, who co-founded Google, billionaire Tony Xu, who co-founded DoorDash, and a number of corporations, including Williams Sonoma, PG&E, Amazon, Visa, and GAP — just to name a few.
Anderson authored a report analyzing those donors.
“The Gap retail store is the most extreme example. The gap between their CEO and median worker pay is 1,690 to one.”
The Yes on D campaign has raised more than two million dollars. It’s being supported by a number of local labor unions, Speaker Emerita Nancy Pelosi, and the majority of the Board of Supervisors.
Saikat Chakrabarti, who’s running to replace Nancy Pelosi in Congress, donated half a million dollars to the Yes on D campaign last week.
Anderson says that if the measure passes, it’ll send an important message to other cities.
“We're seeing the rise of a billionaire class that is not just holding excessive economic power. They're also holding excessive political power and having enormous impact over our political system and our democracy at the local, state, federal — every level. And if San Francisco voters pass Proposition D, it will be a huge inspiration for people in Los Angeles who are right now trying to put this on the ballot in November, for people in many other cities who are looking for ways to address a phenomenon that is really disturbing to a lot of people. This policy won't fix it all, but it will be a strong step in the right direction.”
The primary election is on June 2nd. If both Proposition C and Proposition D pass, whichever receives more votes takes effect, and the other becomes void. Both require a simple majority vote.
