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For months, San Francisco tech companies have been opposed to a local vote proposal that would tax businesses to fund initiatives to help homeless people.
But last week, this unified front collapsed when Marc Benioff, General Manager of Salesforce, the online software company that is the largest private employer in the city, left the pack. "Homelessness is our responsibility," he tweeted. Then, the billionaire promised $ 2 million to pass the tax measure and criticized his comrades hardworking technology for not worrying.
The San Francisco tech community is now raging against this initiative, known as Proposition C, which will be voted on November 6th. Capitalists and businesses, including the online payment start-up Stripe, are lobbying and donating money to defeat the tax. And Jack Dorsey, CEO of Twitter and Square, who opposes the measure, has publicly quarreled with Mr. Benioff. Friday, Mr. Dorsey tweeted"We need to put in place long-term solutions, not quick fixes, to make us feel good for a while."
Scott Wiener, a Democratic senator who represents San Francisco and its environs and is opposed to income tax, has become "clumsy" the embarrassment of choice among technical leaders. Nevertheless, he congratulated the companies for their increased involvement in local politics.
The dispute around Proposal C raises the question of the responsibilities of technology companies to problems in their own backyard. High-tech companies are often accused of exacerbating inequality and raising the value of property through the high salaries of their employees, contributing to homelessness. The question of what these companies may owe their hometowns is magnified because many of them have taken advantage of local tax breaks to stimulate their own growth.
The debate is going on beyond San Francisco and Silicon Valley. In Seattle, Amazon amounted in May to a tourist tax that would have financed services for the homeless. After intense opposition, Seattle officials have scuttled it.
In San Francisco, some tech companies, including Mr. Dorsey's Twitter, resorted to tax breaks in 2011, which the city had offered them to prevent them from moving away. In 2012, San Francisco also adjusted its tax code from a payroll tax to a gross revenue tax, a change that favored the information technology sector, which spends extravagantly to recruit the best engineers.
Many technology companies opposed to proposal C refused to comment on the registration. Opposing a measure to reduce homelessness is tricky for businesses, especially in a city that has the seventh largest homeless population in the country, behind cities like New York City and Los Angeles.
But in public comment, Mr. Dorsey and others have claimed that San Francisco officials, not businesses, are best equipped to tackle homelessness. They said the city had a new mayor, London Breed, who had been elected in June, partly to pledge to fight the problem, and that she needed time to carry out her campaign.
"I'm ready to help in any way possible, as long as the mayor has the responsibility," said Mr. Dorsey during an interview. He added that he was not afraid of being perceived as an anti-homeless supporter, "because that's the right thing to do to get into the nuances and bring out the concerns more." ".
Proponents of the new tax claim that they are not asking high-tech companies to come up with a strategy to save the homeless. Instead, they simply stated that they simply wanted to raise corporate taxes to fund their resources. The extra money from this proposal could be as much as $ 300 million a year and double the city's homelessness budget.
"You are either homeless or you are not," Benioff said in an interview. "Everyone is willing to say that this is a terrible problem and that the situation is getting worse, but a limited number of people are willing to write a check to improve it."
Proposal C was developed by the Coalition on Homelessness, a local non-profit group. The measure is designed to fund short-term shelter, permanent housing and mental health services for the homeless with a gross revenue tax and a payroll tax on businesses above a certain size. The city estimates that nearly half of the companies that would be affected by the tax are in the areas of technology and finance.
Sam Lew, Policy Director for the Coalition on Homelessness, said the proposal was a no-brainer because the funding would provide housing.
The measure qualified for the city vote in July. Polls conducted by the opposition campaign in early September revealed that 56% of likely voters were in favor of the tax, but that number dropped to 47% when they received a message. of opposition.
In August, an executive at Dolby Laboratories, an entertainment systems manufacturer, sent an e-mail to more than 30 tech companies in San Francisco asking if they would consider taking a position. Other companies listed on the e-mail include Salesforce, Stripe, Twitter, GitHub, Uber, Lyft, Zendesk, Slack and Yelp.
Salesforce and Stripe executives said they would probably oppose the measure, according to e-mails, which were obtained by The New York Times.
In an email, Darryl Yee, Salesforce Tax Officer, said: "I grew up in SF and I really want to solve the homelessness problem, but the city's budget already seems healthy enough, especially when we consider that we are only a population of 800,000 inhabitants. . "
Michael Yip, Stripe's chief tax officer, said technology companies could make important charitable donations to the homeless, "in the hope that this will be enough to convince the mayor to publicly oppose to that."
Twitter and Zendesk declined to comment. GitHub and Lyft did not return requests for comments. Yelp said that he was not "active" on the issue.
Some tech companies have started donating money to the tax campaign. In September, Stripe donated $ 20,000 to the "No On C" effort. In one editorial of the San Francisco Chronicle this month, his general counsel, Jon Zieger, wrote that "Prop. It's probably going to do more harm than good, "because there was no comprehensive plan to fight homelessness and the extra money could go nowhere.
Patrick Collison, CEO of Stripe, then tweeted that the measure was a "bad policy".
In a statement Friday, Stripe said that homelessness is complex and that "solutions require careful intervention". He added: "Anyone who claims that the C Prop is a business to be" for the homeless or against them "sells an easy lie."
Earlier this month, Mayor Breed said opposed to the proposal, saying that it was fiscally irresponsible. "I do not believe that doubling what we spend on homelessness without a new responsibility, while we do not even spend what we have now effectively, it's a good government," she said.
Mr. Benioff stated that the first conversations within Salesforce focused on the opposition to the tax since "all companies are supposed to oppose all taxes. One learns it somehow at the business school. But he changed his mind after meeting with his co-CEO, Keith Block, who often met homeless people while he was on his way to work.
"We said, you know what, I think we have to support that," said Benioff. He added that roaming – not taxes – had become an existential threat to the city's businesses and that Salesforce might have to leave if the crisis persisted.
On October 8, Mr. Benioff announced his commitment of $ 2 million to adopt this measure and tweeted his support for the tax.
In response, Mr. Dorsey tweeted his opposition. Mr. Benioff then asked about Mr. Dorsey's philanthropy; Mr. Dorsey insisted that Mr. Benioff re-read his arguments.
Dorsey is now considering giving $ 75,000 to the campaign against the tax, a Square spokesman said. The funding would help spread a more nuanced message about the voting initiative, Dorsey said.
Stripe has also recently made an additional donation of $ 400,000 to the campaign against the tax, according to public records. Michael Moritz, a venture capitalist at Sequoia Capital, also donated $ 100,000, according to public records. He did not respond to a request for comment.
Cisco CEO Chuck Robbins expressed his support for Benioff in a statement this week. He said: "We must end the homelessness and housing crisis our communities are facing." He said he was supporting an affordable housing financing proposal in San Jose, California, where Cisco's headquarters is located.
During a phone call after their exchange on Twitter, Mr. Benioff said that Mr. Dorsey had told him that the tax in Proposition C was too high. Mr. Dorsey stated that he was content to point out the disproportionate impact of the tax on payment processors such as Square. Mr. Benioff estimated that Salesforce would pay $ 10 million a year for the tax; Dorsey said Square, a much smaller company, would pay $ 20 million.
Since then, Mr. Benioff has continued to be interested in other technology leaders in San Francisco and their position on the C proposal. "They did not know that they did not like it until then. "They realize that I support it," he said.
When asked if he agreed with how Mr. Benioff described their conversation, Mr. Dorsey answered with one word: "No."
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