Friday, February 14, 2020

Left Coast Affairs Correspondent: San Francisco Voters to Decide Prop D, a Per-Foot Tax on Vacant Retail Property

Click here to read the original Cautious Optimism Facebook post with comments

3 MIN READ - CO welcomes the embarrassment of riches which is the Cautious Optimism Correspondent for Left Coast Affairs and Other Inexplicable Phenomena—with an update on the latest ballot measure insanity from San Francisco.

Enlightened and progressive San Franciscans head to the polls March 3rd to vote for 2020 primaries candidates, fill district seats on the city’s Board of Supervisors, and consider several new ballot measures.

Among the measures is Proposition D, the “Vacancy Tax” that punishes storefront property for the sin of being empty—at a rate of $250 per sidewalk-facing foot per year in the first year of vacancy, $500 per foot the next year, up to a maximum of $1,000 per foot after three years.

That’s right, a property owner whose retail storefront measures a modest 50 feet in width can be subjected to a $50,000 per year tax just for not having a tenant.

The irony of this measure is particularly cruel considering it’s San Francisco government policies that empty out retail space in the first place, chasing away small shop owners via strangling taxes and regulations.

Consider just a few of the cost inflators on doing business in the City by the Bay:

-Regulation and permit overdose. It takes up to 24 different government permit application approvals, licenses, and multiple training classes to secure permission to open one restaurant in San Francisco, at an average cost of $750,000.

-San Francisco’s voter-approved “Health Mandate” tax, adding 4% to the cost of a restaurant diner’s bill (that’s on top of the 8.5% sales tax for a total of 12.5%—all before tipping).

-2018’s voter-approved Proposition C, a 0.5% gross receipts “homelessness tax” on San Francisco large businesses. That’s 0.5% of a firm’s top-line revenues—not profits—regardless of whether the company makes money or not.

Two weeks after Prop C passed pharmaceutical distributor McKesson announced it was moving its headquarters from San Francisco to Irving, Texas, and discount broker Charles Schwab will leave for its new Westlake, Texas campus.

-2019’s 143% increase in the “Jobs-Housing Linkage business fee” which now stands at $700,000 per 10,000 square feet of office space development.

-San Francisco’s voter-approved minimum wage of $15/hour which took effect in 2018, only to be raised to $15.59/hour in 2019 (and will rise to over $16 later this year and by several percentage points every year after that).

-San Francisco’s heavily unionized workforce which benefits from California’s refusal to adopt “right to work” laws and effectively allows the imposition of compulsory “closed shops” on businesses.

-And in one of the saddest paradoxes of all, 2018’s voter-approved 3.5% tax on “commercial rents” to fund child care. Yes, a tax on the very leases the city government is now accusing landlords of insufficiently providing.

And that was just a sample.

So San Francisco voters drive small businesses to ruin by drowning them in taxes and regulations, only to castigate landlords for not filling the retail space.

As usual, Prop D supporters, local politicians, and city left-wing activists argue that it’s the “greed” of commercial landlords who refuse to rent space at moneylosing prices that causes ugly empty storefronts. Therefore the heartless capitalists must be taxed into submission until they agree to lease at lower rates that more of San Francisco’s crippled businesses can afford.

But mirroring the argument that “greed” drives higher prices of everything in California, the fallacy of this pseudo-logic is that San Francisco is a city full of proud progressives who claim to have forgone caring about greed, exploitation, and profit long ago. Yet red state cities like Dallas, Houston, Nashville, Charlotte, Kansas City, Salt Lake City, and San Antonio are overrun by evil, money-lusting, conservative businessmen donning Lord Palpatine robes and MAGA hats while dreaming from their top floor corner offices of pushing grandma off the cliff to make an extra buck.

And strangely San Francisco’s epidemic of empty retail storefronts doesn’t afflict moneygrubbing middle America.

And in the greatest callous irony of all, Prop D’s authors claim the tax proceeds will be used to subsidize and assist San Francisco small businesses—surely many of the same that they drove into the ground with crushing taxes and regulations in the first place.

Imagine that, killing off businessmen by taking their dollars with one hand, then offering to help by giving them a little of the extorted money back with the other.

Ronald Reagan foresaw the Poop City’s circular reasoning and that of Prop D’s supporters nearly forty years ago when he observed that:

“Government’s view of the economy can be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

Proposition D requires a two-thirds majority to become law.

More details at Reason (below)

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