The controversial San Francisco homeless tax that pitted tech billionaires Marc Benioff and Jack Dorsey against each other passes
- San Francisco's Proposition C, which will tax the city's biggest businesses to raise funds to combat homelessness, passed Tuesday.
- The measure divided the tech industry, with Salesforce CEO Marc Benioff stepping up as most vocal proponent and detractors like Jack Dorsey, Michael Moritz and Mark Pincus speaking out against it.
- Proposition C will increase gross receipts taxes for companies with more than $50 million in annual revenue by an average of 0.5 percent, generating up to $300 million a year in new funds for shelters and mental health services.
The controversial San Francisco "homelessness tax" that divided the tech industry passed with nearly 60 percent affirmative votes, according to poll tallies Tuesday night.
Proposition C will increase gross receipts taxes for companies with more than $50 million in annual revenue by an average of 0.5 percent, generating up to $300 million a year to combat the city's homelessness crisis through initiatives like new beds in shelters and increased mental health services.
Prop C had both vocal proponents and vehement detractors in the tech industry.
Salesforce CEO Marc Benioff strongly endorsed the measure as a moral responsibility of tech companies, many of which have received tax breaks to maintain offices downtown. Together, Benioff and Salesforce contributed more than $7 million to support the proposal, which could cost Salesforce up to $10 million in additional taxes a year.
On the other side, Twitter and Square CEO Jack Dorsey spoke out against Prop C, as did the CEO of payments company Stripe and the founder of Zynga, Mark Pincus. Lyft, venture capitalist Michael Moritz and Y Combinator's Paul Graham all donated at least $100,000 to the "No on Prop C" campaign, too.
Critics of the proposition argued that it lacked proper accountability and oversight, and would unfairly affect financial services companies like Square. Outside the tech industry, San Francisco Mayor London Breed and state Sen. Scott Wiener opposed the measure as well.
In the weeks leading up to the election, the measure became a point of tension in a city where tech-fueled wealth stands in stark contrast with the human suffering on display on its sidewalks.
Overall, more than 7,000 people experience homelessness in San Francisco. The median house price hit $1.6 million earlier this year and one-bedroom apartments rent for an average of $3,300.
Benioff was quick to sound off on the proposition's passing on Twitter:
Supporters were hoping for the proposition to pass by a more than a two-thirds vote, which it ended up just shy of, to avoid any legal challenges. Benioff told The San Francisco Chronicle that he would fund a defense: