MENU

Reason.com

Free Minds & Free Markets

San Francisco Ballot Initiative Would Tax Ridesharing Companies, Internet Sales, and Robot Cars

City Supervisor Aaron Peskin is on a quest to tax everything good about the 21st century.

Julie Bly/Dreamstime.comJulie Bly/Dreamstime.comDoes San Francisco City Supervisor Aaron Peskin want to tax everything good about the 21st century? He's pushing a plan to levy new fees on ridesharing companies, internet sales, and driverless cars.

Peskin's ignoble effort began with a desire to squeeze the San Francisco–headquartered companies Uber and Lyft for more tax revenue. The companies currently pay San Francisco's gross recipients tax—as does most every business in the city—but California law forbids cities from imposing per-trip fees on ridesharing businesses, forcing Peskin to get creative.

In April he introduced legislation that created a whole new, higher-taxed category of San Francisco's existing gross receipts tax for "transportation network company services." It would apply almost exclusively to Uber and Lyft. In late May, city staff projected that the law would raise roughly $32 million a year.

Fearful that this might not pass legal muster, Peskin amended his legislation in June to also include "autonomous vehicle passenger services"—hitting driverless car companies such a Google's Waymo—and other private transit vehicle services.

The Supreme Court then ruled in South Dakota v. Wayfair that states and localities could in fact tax the internet sales of businesses that had no physical presence in their jurisdiction. So Peskin expanded his legislation again to incorporate any e-commerce businesses that make over $500,000 in sales in the city.

Peskin currently plans to put his proposal on the local November ballot, where it would need to earn only a bare majority to pass. Four supervisors need to approve Peskin's proposal before August 3 for it to qualify for the November ballot.

Despite the huge amounts of revenue this tax will generate—particularly after the inclusion of internet sales—its specific purpose isn't entirely clear. The revenue it collects will go straight to the city's general fund, from which it can be spent without restriction.

Peskin himself suggests that the taxes could pay, basically, for all good things. "It could go toward police enforcement. It could go to street resurfacing. It could go to traffic calming and pedestrian safety that we call Vision Zero. It could go to a whole host of things," he told local CBS affiliate KPIX earlier this year.

The actual text of his legislation argues that the city must raise taxes to "maintain a high quality of life and continued economic growth."

With the addition of e-commerce companies to the levy, protectionism has become a justification as well. Peskin legislative aide Sunny Angulo said at a Budget Committee hearing that "these e-commerce, internet businesses have had such a profound impact on our local small businesses, our brick-and-mortar mom-and-pop businesses in San Francisco." Taxing them would help level the playing field, she suggested.

Observers could be forgiven for calling the proposal a cash grab. And if that is indeed what Peskin's taxes are, then he has chosen a great means for getting the job done, says Nicole Kaeding of the Tax Foundation.

"For all their flaws, gross receipts taxes...produce a great deal of revenue because their base is much bigger than it would be under a sales tax and it also produces a very stable form of government revenue," says Kaeding.

The downside is that gross receipts taxes are blunt instruments that raise costs on all aspects of a company's business.

"That tax is going to get captured somewhere. It's either going to be through increased prices to consumers or to their labor force," says Kaeding. Uber or Lyft might choose to "not hire as many people, or not expand as fast in the city, or reduce hours or wages or benefits."

Ride share companies themselves have argued much the same thing.

"This is a lose-lose proposition for the people of San Francisco, directly costing residents millions of dollars while stifling economic opportunity for thousands of drivers. Living and working in San Francisco is expensive enough already, and this new ridesharing tax will only make it worse," said a Lyft spokesperson in a statement.

A principle of good government is that you should only ask voters for more money when you have a specific and pressing public need for it. Peskin's proposal instead operates on the principle that the money flowing to cutting-edge e-commerce businesses, ride-sharing services, and goddamn robot cars would be better spent by bureaucrats.

Photo Credit: Julie Bly/Dreamstime.com

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Weigel's Cock Ring||

    What about the filthy, disgusting bums defecating in the streets?

  • Giant Realistic Flying Tiger||

    It's like a jungle sometimes. It makes me wonder how they keep from going under.

  • BestUsedCarSales||

    People pissing in the streets, you know they just don't care.

  • Yellow Tony||

    It's okay: they'll let you and your friends continue painting the streets brown and red.

  • Diane Reynolds (Paul.)||

    We're focused on straws right now.

  • Diane Reynolds (Paul.)||

    City Supervisor Aaron Peskin is on a quest to tax everything good about the 21st century.

    Maybe because that's where the money is.

  • BYODB||


    Peskin's proposal instead operates on the principle that the money flowing to cutting-edge e-commerce businesses, ride-sharing services, and goddamn robot cars would be better spent by bureaucrats.


    This is San Francisco we're talking about, right? This is literally what 'good government' looks like there.

  • Leo Kovalensky II||

    Go ahead tax the robots. Piss them off. In a state which used to have a Terminator for a Governor, you'd think they'd know better.

  • Happy Chandler||

    Uber and Lyft can't be based in San Francisco! Those commies are terrible for business! All the businesses have left!

  • Sevo||

    There's plenty of lefty imbeciles here; you'd fit right in.

  • Yellow Tony||

    A principle of good government is that you should only ask voters for more money when you have a specific and pressing public need for it. Peskin's proposal instead operates on the principle that the money flowing to cutting-edge e-commerce businesses, ride-sharing services, and goddamn robot cars would be better spent by bureaucrats.


    Is Britches retarded? He wrote this damn article, but he must have forgot the content he just wrote! Look:


    Peskin himself suggests that the taxes could pay, basically, for all good things. "It could go toward police enforcement. It could go to street resurfacing. It could go to traffic calming and pedestrian safety that we call Vision Zero. It could go to a whole host of things," he told local CBS affiliate KPIX earlier this year.


    These are all great things, tremendous things! They can spend more money on keeping the local dog population in check!

  • Fist of Etiquette||

    Aptly named.

  • StackOfCoins||

    There is a special place in hell for City Supervisors.

  • Brandybuck||

    ""levy new fees on ridesharing companies... and driverless cars.""

    This guy WANTS traffic in San Fransisco! Sheesh.

  • turco||

    Detroit on the Pacific?

  • Don't look at me.||

    If all those great thing are so great, he isn't doing a great job because even higher taxes would pay for more great things. Wouldn't that be great?

  • Longtobefree||

    Even more money is available by taxing contributions to the democratic party at 300%.

  • Rockabilly||

    How about a tax on the ballot initiative?

    First your taxed for having a ballot initiative, and if it passes your taxed and if it doesn't pass, your taxed.

    That only seems fair.

  • Exsqueezeyou||

    Peskin himself suggests, ..."It could go to street resurfacing."

    With all that piss and shit on the roads that should consume most of the revenue. A new tourism slogan could be;
    San Francisco: The Chi cago on the coast.

    A Tribute to Billlie Boggs
    "She lies there all year around, and she defecates in her own clothing when she is not lucid, and when she is lucid, she defecates on the sidewalk, " Mayor Koch said later in a speech to the American Psychological Association.

    Billie Boggs was a real trailblazer who made it easier for people to follow. Best not done barefooted.

  • Exsqueezeyou||

    At least "Trucker Bombs" discarded along the highway are done by working folk too busy being productive. And Truckers are considerate and couthe enough to limit it to urine.

    "An all to common scene along our highways.various containers from milk,juice and pop bottles are filled with urine,capped off and thrown from a moving vehicle some retain their seal and in the heat of the summer the piss jugs build up pressure and when nudged by highway clean up crews they may explode,or be sliced open and flung into the air by ..

    https://www.youtube.com/watch?v=zZooyMT9MSI

    Increased respect for those that "Adopt a Highway."

  • Mark22||

    I hope San Francisco votes for this! They deserve it!

  • JP88||

    "People are leaving San Fran because of the high costs of living. What should we do?!"

    "We should tax them more!"

    "But sir, that..."

    "Shut up! The government knows best!"

  • majil||

    They should use the stolen money to clean up all of Gomer's Piles around town

  • NoVaNick||

    About 15 years ago, I had a potential job offer in SF but declined because I didn't think I was weird enough to fit in, and there were hardly any attractive women as far as I could see. Glad to know I made the right decision.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online