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Head Tax on Google Headed for the Ballot in Mountain View

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Head Tax on Google Headed for the Ballot in Mountain View

Mountain View voters will decide this fall if Google and other Silicon Valley tech-giants will have to shoulder a “head tax” on their employee head count.  The measure is touted as a solution to the housing and transit crises in Silicon Valley and as a revenue generator that could be used to fund social relief programs to solve problems like the homelessness epidemic in California. The Mountainview City Council voted unanimously Tuesday evening to place the measure on the November ballot.

Mountain View, California, mayor Lenny Siegel (D) said, that his community has “too many good jobs” and not enough transit.  The solution?  Tax jobs.  Literally.  To the tune of $3.3 million.  And, fund transit?  That is the given rationale, at least.  But, as heavy of a toll as that may be, Google already pumped $14 million into local organizations voluntarily, and Google’s four properties are leased directly from the City at a rate of $13.7 million annually.  Add to that the fact that Google plunked down a $30 million “security deposit” at the commencement of some of the leases, and add-in some of the other costs, taxes and fees borne by Google, and it is hard to see the “financial need” for a measure of this nature.  The City seems intent on not using money received “from Google” from other sources to beef up infrastructure--but wants to set a precedent of Google directly bank rolling transit and construction projects that are at least arguably necessitated by Google’s burgeoning head-count.

 “Our needs for transit are enormous,” Larry Siegel said. “We can’t rely on not only the federal government, but the VTA.” Google’s head count has more than doubled in the past nine years, from 10,000 workers to more than 23,000, according to city documents. Even Siegel acknowledge that Google has worked hard to address the impact of its growth, with everything from commuter buses and employee bicycles to building housing as part of its North Bayshore expansion.

Businesses like Google have reacted to these measures strongly with the “No Tax on Jobs” campaign. They have also responded, not by packing up shop and moving, but rather by diversifying their operations and business campuses in a number of locations. Google has offices in Ann Arbor, Michigan; Atlanta; Austin, Texas; Boulder, Colorado; Cambridge, Massachusetts; Chicago; Irvine, California; New York City; Northern Virginia; Pittsburgh; Seattle; and elsewhere. Jobs are mobile and cities across the country are vying for the distinction of being the next tech hub and working hard to attract prominent businesses to their locales. No doubt, Google can quickly adjust where employees are located if measures like the “head tax” become more prominent in Mountain View and throughout Silicon Valley.

Cupertino, California, where Apple is headquartered, is exploring a business “head tax” too, but recently changed course.  In Cupertino, Mayor Barry Chang (D) wants to charge large businesses $1,000 per employee. He remarked that “If [Apple] leave[s], it will have a great impact to the city, no doubt about it,” but “[i]f that happens, something better may come up.”  Something better than Apple?  That seems to be wishful thinking of the highest order.  The head tax model already exists in San Jose, Sunnyvale and Redwood City. Cupertino city officials were considering a similar tax until last week, but apparently weren’t so sure that “something better” would come up if Apple reacted by moving operations elsewhere.




Category: Tax

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