San Francisco’s reliance on major businesses for tax revenue is potentially risky, according to a report. The report finds that the city’s top 10 companies owe one-third of business taxes. This concentration of tax revenue puts the city at risk if these companies decide to move elsewhere. The report recommends that the city diversify its tax base and implement progressive taxation to reduce the concentration risk.
The report also notes that San Francisco’s economy is at risk of a “doom loop” due to remote work keeping office workers away from the city. This could further exacerbate the concentration of tax revenue from major businesses.
In addition, some San Francisco businesses are demanding tax refunds for 2022 due to rampant crime and drug use in the Tenderloin district. The business owners claim that the city has abandoned its commitment to provide safety, and are calling for the removal of drug dealers and ongoing law enforcement in the area.
To address the concentration risk of tax revenue, the report recommends implementing a progressive tax system and diversifying the tax base. This could include taxing high-income earners and implementing a vacancy tax on unoccupied commercial properties. By reducing the concentration of tax revenue from major businesses, San Francisco can reduce its risk of losing tax revenue if these companies decide to move elsewhere.