City advancing creative business tax changes 

The City Controller is studying ways to overhaul San Francisco’s business tax structure as city officials eye the November ballot to bring to voters a significant change.

The Examiner first reported the effort on Jan 31.

Among those involved in the effort is Gabriel Metcalf, executive director of the San Francisco Planning and Urban Research Association, a public-policy think tank.

In the association’s latest news report, Metcalf is identified as a member of the study’s advisory panel.

“San Francisco is one of the only cities in California to levy a tax on the payroll of private businesses,” the report says. “This is a direct disincentive to create jobs. SPUR and many others have argued that it would be preferable to shift the tax structure away from things we want more of (jobs) and onto things we want less of (waste and pollution, for example).

“Several years ago the city of Los Angeles phased out its payroll tax and replaced it with a gross receipts tax,” the report continues. “With these ideas swirling around, and a renewed interest in fostering a climate supportive of economic growth in San Francisco, the Controller’s Office is now undertaking a study to consider options for restructuring the business tax.”

Back in 2008, SPUR published an article about the business tax reform that suggested moving toward what is known as “environmental tax reform.”

“Environmental tax reform (ETR) is a policy tool San Francisco can use to address both its slow economic growth and its environmental ambitions. ETR decreases taxes on labor or income while simultaneously increasing ‘green’ taxes — taxes on waste and pollution — to discourage environmentally damaging behavior,” the article says.

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