In a bid to raise revenues from windfall gains in IPO’s, politicians in the tech capital of the United States are proposing to triple taxes on corporations offering stock compensation to employees. Taxes on IPO investments which are currently priced at 0.38 percent are likely to go up to the 2011 levels of 1.5 percent, generating revenues of $100-200 million in the first couple of years, according to the city’s supervisor. The revenues from the tax would be used to build affordable housing, transportation, and health programs for workers in the low-mid income group.
Even as the 11-member Board of Supervisors get ready to vote in favour of the proposal, the San Francisco Chamber of Commerce, supported by tech giants is against the tax hike, stating that the proposal will drive companies out of the city when they go public.
The Board of Supervisors are expected to vote on the proposal in the next few weeks, and if it passes, it would need the approval of the public to be enforced into law. In November last year, residents successfully voted on a bill to tax large corporates to raise money for the homeless.