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Thursday, March 28, 2024

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UncategorizedThe Big Lie on the anti-speculation tax

The Big Lie on the anti-speculation tax

The answer is Zero -- and that's just fine
The answer is Zero — and that’s just fine

By Tim Redmond

The campaign against San Francisco’s anti-speculation tax is trying to replay the successful effort in Richmond to shoot down a soda tax. It’s not just misleading, it ignores the entire point of the tax measure.

A flier that arrived in my mailbox today – similar to one that was on the Board of Realtors website – argues that none of the money from the tax will go to affordable housing.

That’s what Big Soda did in Richmond – the companies argued that none of the money from a sugary-drink tax would go to fight obesity.

Clue phone: The state of California, thanks to some very bad laws, forbids cities from levying taxes to fund specific programs, unless there’s two-thirds voter approval.

The soda tax in San Francisco needs two-thirds for that very reason; organizers here were willing to risk winning a much higher threshold to avoid the argument that the money might (gasp!) go to general government activities (you know, like police, and fire, and parks, and Muni … that sort of thing.) They feared a repeat of the Richmond campaign.

The anti-spec tax drafters decided they would have a tough enough time getting 50 percent of the vote against a well-funded landlord onslaught, and two-thirds would be nearly impossible. So it’s not a special tax; it’s a general tax.

So what does the No on G flier say? “How much of the revenue raised from the Prop. G housing tax must go to creating affordable housing? Zero.” Yes, thank you: That happens to be state law.

But there’s a much larger point here.

The anti-speculation tax – no, it’s not a “housing tax,” it’s a tax on flipping property – isn’t designed to raise money.

Odd – a tax that isn’t about raising money. Most of the time, when you pass a tax bill, you expect revenue.

But in this case, the sponsors of Prop. G would be thrilled if it never brings in a penny.

That’s because the tax is designed to take the profit out of speculation, to make it much more expensive to buy a building, Ellis the tenants, and resell it quickly. You tax away a lot of the profit, and speculators won’t do the deal.

Nobody wants speculators to keep flipping buildings just so the city can bring in tax revenue – which, by the way, won’t make a dent in the affordable housing problem. It’s supposed to be a penalty, a disincentive to do something that most of us think is socially detrimental.

You can’t outlaw speculation; this is America, after all, and even the grossest forms of capitalist excess are protected by the Constitution. But you can make it unprofitable, maybe – and that’s why Prop. G exists.

So the campaign thus far is not only misleading; it’s completely wrong. Who cares where the money goes? If Prop. G works, people won’t flip buildings and we won’t get any money, not one cent for affordable housing. And the housing and tenant advocates will declare victory.

48 Hills welcomes comments in the form of letters to the editor, which you can submit here. We also invite you to join the conversation on our FacebookTwitter, and Instagram

Tim Redmond
Tim Redmond
Tim Redmond has been a political and investigative reporter in San Francisco for more than 30 years. He spent much of that time as executive editor of the Bay Guardian. He is the founder of 48hills.

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