A first-class tax for large companies helping homeless people has an early lead in the San Francisco elections

A first-class tax for large companies helping homeless people has an early lead in the San Francisco elections

To update: An earlier version of this article falsely stated that Proposition C was passed before the official call.

Based on early poll results, it is likely that San Francisco voters passed a measure that split the tech community and sparked a national debate over the industry's responsibility to tackle city homelessness.

Proposal C would increase the city's gross income tax by an average of 0.5 percent to over $ 50 million in annual gross revenues generated by companies such as Square, Lyft, and Salesforce. The new funds would earn an estimated $ 250 to $ 300 million a year – twice as much as the city currently spends annually to help homeless people in Tech's de facto capital.

"The first results are looking good and we are optimistic that this will happen," said Christin Evans, organizer of the Yes on C campaign. At 37 per cent of the vote, the measurement at 22:00 PT on Tuesday was 58 percent to 42 percent.

The thousands of people who live on the streets of San Francisco daily recall the economic inequality in a city that has one of the highest concentrations of billionaires in the nation. Earlier this year, a United Nations expert on housing called the living conditions of homeless people in the Bay Area "cruel" and "unacceptable."

The decision to increase funding for the city's most needy is a victory for the local charities behind the move and their technology sponsors, Salesforce CEO Marc Benioff, who has invested more than $ 7 million with his company in the campaign within the month before the election.

But it's a loss for many tech companies that have opposed the measure – including Square, Lyft and Stripe – and expressed concern for the new San Francisco Mayor London Breed regarding accountability for using the new funds.

The vote comes at a time when politicians and local nonprofit organizations are increasingly calling for tech leaders to become more non-profit and social members of their communities.

"Tech was the biggest wealth carrier in our generation, and if you look at that, you have to say, what is your responsibility?" Said Leslie Miley, a former engineering director at Slack, who voted yes on Prop C. "How progressive can you be if you pass people living on the street and do not lash them? All I know is doing nothing is not an option anymore. "

In the weeks leading up to the vote, Benioff drew attention to the campaign by publicly speaking with other tech titans who had publicly opposed Prop C Jack Dorsey, Stripe CEO Patrick Collison and Zynga founder Mark Pincus, At last week's WIRED25 conference, Benioff said, "They're either for kids or homeless or for you."

Opponents of Prop. C have argued that the decision is more nuanced. This points to the resources that the city already provides to the homeless, and the question of simply spending more money on the problem is the right approach.

"If homelessness was just a matter of money, that problem would already be solved," Collison wrote in a company blog post last month.

Benioff himself first expressed concerns about the measure in private talks, as recoding previously reported. But he said that after weighing the city's economic analysis – which found that the money would significantly reduce the homeless population – and talking to local housing activists, he decided to support them.

Especially Square and Stripe were the loudest opponents of tech technology. Dorsey twittered this square would probably be taxed with disproportionately higher rate the total revenue as a software company like Salesforce. This would be partly due to a complex urban tax structure that categorizes Square as a financial services company rather than an information services company.

Advocates of Prop C argue that tax categorization is a bigger problem that should not stop the funding of homeless people, and that Twitter and some other tech companies have actually benefited from special tax subsidies over the years. In 2011, when San Francisco tried to encourage more technology companies to maintain their headquarters in the economically strained neighborhood of the mid-market, the city agreed to temporarily exempt companies like Twitter from payroll tax. These tax credits expire next year.

Another complication to the Prop C saga: although the measure was passed, it could face legal challenges before it enters into force in January. There is currently a lawsuit pending in California Tax measures for specific purposes that have not been adopted by a two-thirds majority,

It is clear from today's vote that many voters in San Francisco are demanding that big companies give in at a higher price than they do now. Whether Prop C can force companies to do so without legal challenges remains to be seen.

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