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Google’s hometown passes new business tax to cope with rise in tech commuters

(Stephen Lam/Reuters)
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Voters in Mountain View, Calif., approved a ballot measure Tuesday to tax businesses as much as $150 per employee, with millions of dollars expected to be collected from hometown tech giant Google.

The initiative, Measure P, could generate as much as $6 million for the city’s general fund, affordable housing services and efforts to ease traffic congestion, according to the Mercury News. The city will charge businesses on a progressive payment scale, with larger companies paying more for each employee as their head counts rise. Three nearby cities have already levied a head tax on local businesses, according to the report, but critics say Measure P unfairly singles out Google, which will absorb 60 percent of the tax.

The passage of the initiative comes as voters in San Francisco approved Proposition C, a tax on the city’s largest businesses to combat homelessness. Together, the ballot measures highlight the tension between the massive wealth generated by the area’s tech industry and the push by local residents for greater civic contributions from corporations. Proponents of the initiatives say the taxes will help ease some of the problems created or exacerbated by the tech industry’s success, notably the rising cost of living and transportation woes.

San Francisco’s Proposition C will levy a tax on companies of about .5 percent of gross receipts but will only apply to businesses with revenue greater than $50 million. The measure is expected to generate as much as $300 million per year or about double the amount the city currently spends on homeless services, according to the San Francisco Chronicle. The tax will supply funds for housing and mental health services.

The measure was backed by tech billionaire Marc Benioff, founder of Salesforce, who celebrated its passage on Twitter, saying, “Prop C’s victory means the homeless will have a home & the help they truly need! Let the city come together in Love for those who need it most!” But opponents of the initiative had their own tech mogul allies, who have criticized the business impacts of the tax and its supposed lack of accountability. Twitter and Square chief executive Jack Dorsey, Stripe chief executive Patrick Collison, and Zynga chairman and co-founder Mark Pincus have voiced opposition to the measure.

The Mountain View head tax will phase in over two years beginning in 2020. San Francisco’s tax to tackle homelessness may be delayed for months or years, according to the Mercury News, because while it passed, it did not earn more than two-thirds of the vote, leaving it vulnerable to legal challenges.