That may be, but the quality of the jobs they provide is also extremely high compared to one of those sweatshops filled with old Asian ladies, with which the SF I came to know and (cough) love was well stocked.
High quality jobs improve the tax base, lessen the demands on social services, indirectly increase property values, and create fewer negative externalities (waste, pollution, noise, crime). They also have lower turnover, are less seasonal, and are more likely to result in SF homeowners as opposed to itinerant renters.
There's a balance to be struck, to be sure; "hedge fund manager" is a very, very high-quality job, but having 1 hedge fund manager isn't better than having 100 software developers, no matter what the numbers might say.
High quality jobs improve the tax base, lessen the demands on social services
Except in this case, not only is Twitter asking to be relieved of $500K/yr in payroll tax burden, but also to get $250K in additional police presence in the area.
$250k in annual police presence is 2 more cops 24/7 and covers the entire proposed exemption district, which includes the Tenderloin - not just the street between Twitter's future front door and the subway entrance.
To put this in perspective, if 2000 Twitter employees purchase lunch near the office 5 days a week at an average price of $10, the sales tax revenue will offset the cost of the payroll tax holiday - not to mention the benefits of an extra $5m/year flowing through the neighborhood economy.
Well, I don't know that adding two more officers to the Tenderloin is the same as adding two more to Twitterland. I guess if Twitter is smart they'll have a Starbucks nearby or inside; I'm sure it'll work out in their favor one way or another. I certainly don't think Twitter is asking for the police presence out of concern for those living three blocks north, it would be fiducially irresponsible.
2000 lunchers to the tune of $100,000 spent in the neighborhood per week, are you saying that Twitter is not going to have their own on-site cafeteria?
He gave one example of how the numbers for 2000 Twitter jobs can scale to revenue. He hasn't done an analysis of Twitter employee eating habits; he's just injecting more numeracy into the discussion. On the other hand, a protracted argument about exactly how much lunch business Twitter employees will do is likely to harm the overall discussion more than it helps.
I see, more numeracy. Let me add: 40. Fantasy numbers don't help, and "maybe the city will even out in side-effects" isn't exactly moving the discussion along, either.
I know those numbers sound high, but the number of high-quality jobs required to offset them are probably lower than you think, for two reasons (among many others): first, payroll tax incentives aside, Twitter employees still pay increased property taxes on average; second, low-income SF residents consume significant amounts of money in public assistance funds of varying forms.
It seems to me that it is more accurate to say that Twitter is seeking to not be specially treated with an extra-special tax that appears to exist nearly nowhere else in the US.
The article says "Going public from San Francisco could cost companies like Twitter, Zynga and Yelp as much as half of the IPO proceeds in taxes." I can't back this and would be interested in anybody who has more details about whether this is true, but if it is true, this isn't a company that is asking for special tax breaks that nobody else gets. This is a company that literally can not go public under a regime like that as it is, as the article says, an immediate failure to honor their fiduciary duties. They literally can not continue to function and grow normally and must leave.
(However that number seems high to me, even assuming it's 50% of what's left after everybody else gets their taxes. I have no inside information but my BS detector is twitching.)
The article says "Going public from San Francisco could cost companies like Twitter, Zynga and Yelp as much as half of the IPO proceeds in taxes."
Yeah, that part is total BS. The tax is 1.5% on payroll, and treats stock option gains like payroll. So if Twitter IPOed at $12 billion, and employees owned 1/4 of the shares via options, it could cost...$40-50 million. It would only be half in relation to the nominal value of the share options at time of issue, rather than post-IPO. Having said that, though, nobody is strenuously supporting the 'IPO tax' - not even the unions or the reflexively anti-corporate Bay Guardian. Almost everyone sees the point that share options are a carrot to attract talent to a startup business that could otherwise afford to go elsewhere, and the gains are the just reward for risk + economic growth, so any taxes should be on the low value of the share options at time issue.
The objections I've been hearing are towards other aspects of the plan, like the payroll exemptions for existing businesses and the expansion of the area to include properties owned by large commercial landlords, and less about Twitter than the headlines suggest.
It's the knock-on effect. The city anticipates that in ten years, other businesses attracted by Twitter's presence will create ~3-4,000 more jobs, paying about 25% more, than if Twitter does not move in. The company is big enough for other businesses to coalesce around, whereas without them it's questionable whether enough small businesses would have the critical mass to sustain economic growth. 'We're in the same building as/next door to Twitter' sounds encouraging; 'we're the only tenant on the 13th floor of the Scary Neighborhood Tower' does not.
How so? Based on the way the payroll tax works there (assuming the article is accurate), I can't see why any startup or rapidly growing business would want to be in San Francisco.
It doesn't seem to offer any real advantages over, say, Palo Alto or Sunnyvale or Cupertino or San Jose, and the tax situation sure seems like a significant disadvantage.
High quality jobs improve the tax base, lessen the demands on social services, indirectly increase property values, and create fewer negative externalities (waste, pollution, noise, crime). They also have lower turnover, are less seasonal, and are more likely to result in SF homeowners as opposed to itinerant renters.
There's a balance to be struck, to be sure; "hedge fund manager" is a very, very high-quality job, but having 1 hedge fund manager isn't better than having 100 software developers, no matter what the numbers might say.