In the search for new revenues with which San Francisco’s government can support affordable housing, public education, and mass transit, City Hall ought to consider initiating a luxury tax. This would not be a wealth tax; almost no one who can afford it wants to pay a wealth tax. A luxury tax is different. The city probably doesn’t even need state permission to launch this money-maker, since it’s a form of sales tax that can be locally imposed with a vote of the people.
San Francisco offers many choice luxuries which could be taxed. You could buy a mansion in Pacific Heights for $65 million, or for much less purchase Game-Worn Air Jordan tennis shoes (from half a million to two million, check with your broker).
Those seeking more affordable luxuries can buy a giant croissant, a French pastry ten times the usual size, with nearly a pound of butter in it, for only $22 at a local bakery.
If enough of these luxuries are taxed, City Hall won’t need to finance projects by pleading for gifts from philanthropists or imposing more regressive sales taxes that hurt the poor and working class; it just has to tax the philanthropists (and giant croissant eaters) when they buy themselves fancy gifts.
Of course the word “luxury” means different things to different people. For some shoppers, a new pair of shoes is a luxury. But I am not talking about them; I’m talking about a tax on wildly expensive shoes, such as the $500,000 collector’s items scooped up by some rich sports fans. Nobody will ever even wear them.
Not everyone is going to buy those shoes; even most professional basketball players pay a lot less. But those who can afford them can also afford to pay a little more, that is to say, an added luxury tax.
Consider the case of two San Franciscans. I’ll call them Y and Z to protect their privacy. They are no relation to X, formerly Twitter; but speaking of X, the city ought to consider assessing a special luxury tax from any buyer who can afford to share their income with Elon Musk. The taxes that Tesla and Space X avoids when it doesn’t pay the Federal government ought to be charged and redirected toward San Francisco’s treasury if goods from them are purchased here.
The “added Tesla tax” can be used to help those Federal employees in San Francisco who are now unemployed due to DOGE (Musk’s Department of Government Efficiency) layoffs.
But Y and Z are quite happy and still solvent as they sip champagne in the company of their agent, who has just led them through a new Pacific Heights home and told them: “This classic ten-room mansion with multiple views of the Golden Gate Bridge comes with a five-star live-in chef, a small orange grove on the roof and helicopter landing pad with helicopter up there, too. It will only cost you $65 million, luxury tax included.”
The couple gladly signs the contract knowing that the million-dollar luxury tax included in the sale price goes directly to San Francisco’s new affordable housing fund and subsidizes rents for low-income families struggling to stay in the city. Besides, they don’t even notice it.
To celebrate the acquisition, they call a limo to take them to lunch. The short ride in a very long driverless car will cost them more than many people spend in a year on Muni, but they charge it with pleasure; the luxury tax on their journey will support the municipal transit budget, and keep Muni running for a few more hours.
While most restaurants in the city will be exempt from luxury tax, because food is considered a necessity, not a luxury, a clause in the new tax law could stipulate that meals costing over $300 a person are luxury taxable. Z and Y can afford it, so after sampling plates of rare non-hallucinogenic mushrooms, sharing a meatless Marin steak and a vintage bottle of pre-wildfire but smoky wine, followed by dishes of dairy-free onion-flavored ice cream and giant croissants, the couple signs for the meal, including a nice tip—and a 20 percent luxury tax that will go directly to a new emergency kitchen for the unhoused funded by City Hall.
Having finished their exquisite lunch, the two diners stroll through Union Square in search fashionable footgear. They find a collectible pair of Air Jordans, worn by and then signed signed by a great basketball player. The shoes will look great in the glass display case that awaits them in their newly purchased Pacific Heights mansion
Needless to say, the price of the collectible shoes is so high (at least to those of us who don’t pay millions for game-worn shoes) that the $50,000 luxury tax seems like a bargain by comparison. This time the tax goes to support public education.
The shoe salesperson, who by chance took theatre classes with me at San Francisco State, congratulates his customers on the purchase by quoting Marxist playwright Bertolt Brecht: “It is the superfluous for which we live. Nothing needs less justification than pleasure.”
“But,” adds the shoe seller, “someone has to pay for it.”
Joel Schechter has written several books on satire. This is for real.
