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San Francisco Could Learn High Taxes Suck the Hard Way

While some states don’t have a income tax, some cities often will go the other way and impose a payroll tax on their employers.  One such city is San Francisco, which has a 1.5% Payroll tax in addition to whatever is charged by the state of California and the federal government.

Because of this, two rapidly growing tech employers initially located in the city — Twitter and Zynga, the makers of addictive Facebook games like “Farmville,” “Mafia Wars,” “FrontierVille,” and so on — are seriously thinking of hightailing it out of the City by the Golden Gate when they no longer can fit in their current office spaces because of the taxes the city forces on them.  But most embarrassing of all for San Fran, is some in city government either like things this way, or honestly think these taxes are what’s best for the city.

San Francisco, unlike most other cities in Silicon Valley, has a 1.5% payroll tax. And even more stunning is that they consider gains on stock options part of payroll, meaning that any San Francisco based company going public or being acquired could get hit with a massive tax bill in the tens of millions of dollars.

They’ve got Twitter jumping through hoops to avoid the tax. The company will be forced to move to a new location in order to get a six year payroll tax break. But only if the Board of Supervisors votes to approve the legislation on Wednesday. The upside is that Twitter employees will have immediate physical access to prostitutes, drugs and weapons – the qualifying area isn’t exactly an up and coming neighborhood.

The city isn’t thanking Twitter for bringing all these high paying jobs to San Francisco, either. Rather, some supervisors don’t want the tax break at all, and seem quite willing to see Twitter bail to tax-free Brisbane. Says Supervisor John Avalos: “Who are the [Twitter] investors? Probably some of the wealthiest people in this country. And we are giving them more wealth.”

The stupidity of that statement is self evident.

But the city has another potential disaster on its hands – Zynga. The company is already moving into its new 270,000 square foot headquarters on Townsend Street, which is outside of the proposed tax free/hooker area.

We heard Mayor Edwin Lee and Board of Supervisors President David Chu met with Zynga at their offices today to negotiate the issue. I contacted Zynga to ask about the meeting. They confirmed it happened, said it was “positive and productive,” and “they appreciated the city’s interest in Zynga’s future growth.” They wouldn’t comment further.

We have heard, however, that Zynga is already looking to expand beyond the city into other areas in Silicon Valley. They already have offices in Sunnyvale and Los Gatos, for example. Our sources say Zynga is prepared to drive future employee growth outside of San Francisco. They’ll always keep some presence in San Francisco, say our sources, but may even consider moving the corporate headquarters south.

Whatever happens specifically with Zynga and Twitter, the city needs to do a very big reality check and soon. Tech startups aren’t just driving some job growth in the city, they’re driving absolutely all of it. Zynga hired 800 people in 2010, and they’re hiring another 1,500 in the next year, most of which would be in San Francisco. Twitter has a similar story. Those two companies, plus Salesforce, account for most of the technology job growth in the city.

Silicon Valley is BIG.  Technology may have been the source of San Francisco “Boom Years,” but the city needs to realize (If it isn’t already) that it isn’t just competing with other nations or states for these high-paying, cutting-edge jobs, but also its own neighboring communities inside California.  Part of economic development for cities isn’t just offering the incentives to launch a business, it’s about making sure those business you’ve helped launch stay there and have the means to remain competitive in your city for years and decades to come.

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Stupid Right-Wing, Gun-Toting Crazy…

Oh, wait.  This was in Black Earth?

That’s in Dane County!

Remember folks; Dane County is supposedly where all the sane people in Wisconsin are. (Right John Nichols?)

Allegedly set off by Bristol Palin’s appearance on “Dancing with the Stars,” a rural Black Earth man kept police at bay outside his home for 15 hours Monday and Tuesday before he surrendered to police.

Steven N. Cowan, 66, railed at the television as the daughter of former Republican vice presidential candidate Sarah Palin appeared on the ABC program, his wife told police Monday after she fled from the town of Vermont house, according to a criminal complaint filed in Dane County Circuit Court.

Cowan had also been under stress because of a financial situation and was receiving care for a mental health problem, the complaint states. Cowan’s wife, Janice, told police that her husband had been drinking, but she did not think he was intoxicated.

The complaint charged Cowan with second-degree reckless endangerment.

According to the complaint, Cowan and his wife were watching “Dancing with the Stars” when Cowan jumped up and swore as Bristol Palin appeared, saying something about “the (expletive) politics.” Cowan was upset that a political figure’s daughter was on the show when he didn’t think she was a good dancer, the complaint states.

According to the complaint:

Cowan went upstairs for about 20 minutes and returned, demanding his pistols, which had been taken by his daughter about a month ago for safety reasons. He was carrying a single-shot shotgun, which he loaded and fired into the television.

Cowan continued to yell, demanding his pistols. He re-loaded the shotgun and pointed it toward his wife. She left the house and drove to Black Earth, where she called 911. She told police she was afraid for her safety.

Cowan kept sheriff’s deputies at bay outside his home until 11 a.m. Tuesday, when he surrendered without incident, sheriff’s spokeswoman Elise Schaffer said.

H/T Althouse.

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