For a company that was established with a mere few hundred employees, the income tax bracket wasn’t so bad in the city of San Francisco. That company, the social microblogging site we’ve come to know as Twitter, is looking at a nice tax break.
The city of San Francisco wants tech startups like Twitter to stay, so officials have proposed some deals—controversial ones—that would either decrease or eliminate some taxes.
According to the San Francisco Gate, Mayor Edwin Lee and city supervisors, including Ross Mirkarimi and Board of Supervisors President David Chiu, are working hard on updating the measures with one such initiative including a two-year moratorium on taxing employee options. This would apply to tech companies anywhere in the city that maintain 100 or more employees and not publicly traded.
Twitter has 350 employees and plans to create more than 2,000 jobs in coming years. Company officials said they would stay in San Francisco if the tax break were approved.
The tax break could save Twitter an estimated $22 million in taxes over six years.
The Associated Press reports that many in city hall are upset over the proposed tax breaks because they feel that because the city is facing massive layoffs, an enormous budget shortfall and high real estate prices, lawmakers are bailing out venture capitalists.
“Who are the Twitter investors?” asked Supervisor John Avalos to the San Francisco Chronicle. “Probably some of the wealthiest people in this country. And we are giving them more wealth.”
For city officials, it’s not about the wealth but rejuvenating the neighborhoods. By cultivating a little Silicon Valley within the city limits of San Francisco, Chiu feels it’s a “step forward of really trying to bring back these neighborhoods and it is a first step forward for making sure that we get our economy back on track.”
For lower income residents, the concern is not so much about the rejuvenation of their communities, but a likely increase in rent due to increased property values.
According to the Associated Press, the legislation passed Tuesday will require Twitter and other larger companies in the area to enter into agreements with the city outlining actions the businesses will take to benefit the surrounding community. The agreements aim to assuage the concerns of low-income residents and the worry of increased rents.
"We ... want some assurance that the people will not be displaced," said neighborhood resident Jesus Perez, who attended the meeting to show his opposition. "All the property is going to start climbing up."
The board will vote again next week before it goes to the desk of the mayor, who is expected to sign it into law.
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