A “yes” vote supports authorizing an additional tax of 0.1%-0.6% of gross receipts or 0.4%-2.4% of payroll expenses for businesses in which the highest-paid managerial employee earns more than 100 times the median compensation of employees, generating an estimated $60-140 million per year.

  Result: pass
  Yes 212,464 
  No 113,510 

Intended consequences:

• Estimated additional tax revenue of $60-140 million per year, assuming businesses pay the new tax and make no adjustments.

• Or, according to supporters, "raise over $140 million every year which would allow the City to hire hundreds of nurses, doctors, and first responders."

• Reduced inequality of income, as businesses try to avoid the tax by reducing executive pay and increasing salary for the lowest-paid employees.

Possible unintended consequences:

• Reduced tax revenue, as businesses relocate to avoid this tax, and new businesses are more likely to incorporate elsewhere, or

• higher prices for customers, the source of all revenues used to pay taxes and other expenses.

• Reducing opportunities for part-time and temporary employees, to avoid "annualizing" such employees into full-time equivalents under Section 3302 (b). PDF

• Reducing workforce earning salary below the median, by using more automation and demanding more output from remaining employees.

• Avoiding hiring additional employees when approaching the minimum of 1000 which qualifies for the tax.

• Making layoffs more attractive when just over the 1000-employee threshold.

• Gaming the definition of employees who are counted when "a person is engaging in business within the City during the tax year" under Section 953.8. by encouraging or discouraging telework, postponing hiring until the tax year begins, or accelerating layoffs before the tax year ends.

• A surtax of 0.1 to 0.6% of executive compensation is probably too small to justify reducing pay for the CEO to reduce the tax burden. The value of the median does not change when the highest salary is reduced or the lowest salary is increased, it may be easier to raise the median by eliminating low-paid employees.