CEO pay ratio tax

Prop L would assess additional gross receipts taxes to firms whose top-paid employee is paid at least 100 times the median San Francisco employee. The additional rate rises with the rate, with the top rate kicking in at a ratio of 600:1. For firms with only administrative offices in San Francisco---offices defined by the treasurer as those without “sales personnel or personnel actively engaged in marketing, research and development, direct customer service, and product support services”---the new tax is assessed on payroll rather than gross receipts.

The city economist’s report found that the tax would have the following effects:

• Add $60 million to $140 million in annual tax revenue (1-2 percent of the General Fund)
• Lose the city 615 employees (0.06 percent), most significantly in retail trade, financial services, and accommodations
• Reduce GDP by $60 million (0.03 percent)

While it’s temperamentally targeted toward tech companies, the retail trade sector would be the most disproportionately impacted, paying 23 percent of the tax while making up 7 percent of current employment.