Proposition L, the “Overpaid Executive Gross Receipts Tax,” would add a duty to companies whose executives earn 100 times or more the median salary of the rest of their San Francisco workforce. District 6 Supervisor Matt Haney, the measure’s lead advocate, estimates that the tax would generate between $60 million and $140 million annually for the City’s general fund.
Businesses that earn at least $1.17 million annually would be subject to the tax, equal to 0.1 percent of gross receipts made in the City. The levy would jump to 0.2 percent for executives making 200 times the company’s median salary; one percent for executives earning 1,000 times the median.
Compensation would include wages, salaries, commissions, bonuses, and property provided in exchange for the performance of services. Companies likely to be taxed under the initiative include JP Morgan, Bank of America, Comcast, and Gap, according to the San Francisco Chronicle.
Wells Fargo paid its chief executive officer $23 million in 2019; the company would have to pay its median worker at least $230,000 to avoid the lowest tax rate. A Wells Fargo spokesperson said the company doesn’t have a position on the measure.
Comcast’s CEO earned $36 million in 2019, according to U.S. Security and Exchange Commission reports, and would have to pay a San Francisco median worker at least $360,000 to avoid the lowest levy.
The proposition is supported by the San Francisco Democratic Party, San Francisco Labor Council, Service Employees International Union Local 1021, the International Federation of Professional and Technical Engineers Local 21, and other unions. Opponents include the San Francisco Taxpayers Association and San Francisco Chamber of Commerce.
Richie Greenberg, who ran for mayor in 2018, called the measure “misguided,” asserting that salaries are based on experience and the value an individual brings to a company. “By enacting such a bizarre hocus-pocus tax on executive salaries as Proposition L seeks to impose, the incentive for hiring new entry-level employees, or retaining current employees due to COVID-19 changes in business, would diminish,” he wrote in an argument submitted to the Department of Elections. “In other words, companies would reduce or stop hiring low-level employees as an answer to this measure, if it should pass.”
