Articles misses that this is in response to SF's gross receipts tax. Payment processing is an ultra low margin business, no way they can compete while paying ~1% of revenues to the city.
People don't talk about this very much. But it seems extremely unfair that Stripe/Square pay way more tax than Saleforce in terms of ratio to their revenues. (I don't recall the numbers. Anyone?)
Jack Dorsey tried to raise this point multiple times. But people just kept screaming that he didn't care about homeless :S
> But people just kept screaming that he didn't care about homeless
JFC, it's not because of a lack of money that SF has a problem with homeless people, and it's not that more money would make the problem magically go away.
It’s a national issue and SF is a symptom. Instead of pushing for healthcare, housing, more aids, and so on, people are just blaming it on mental health.
I agree with you that homelessness isn't as simple as just saying "mental health".
However, when people talk about homelessness being such a big problem in SF, I think a lot of what they are talking about is the subset of homeless people who are "violently mentally ill". That's something that I saw a lot more of in SF than in cities in the Mid West. By "violently mentally ill" I mean things like:
- Yelling at pedestrians that they are the incarnation of Satan and were going to use their demonic powers to strike them down.
- Using racial slurs for minorities that walked past.
- Purposely invading people's personal space.
I don't know why this would be a greater problem, or a more visible problem, with the homeless in SF compared to other places. Maybe in the Mid West it is difficult for people who are too mentally ill to survive the winter. Maybe other cities use anti-vagrancy laws to round them up.
It’s not “national issue.” Aid and housing are local issues. San Francisco and California in general have much worse homelessness problems than many other places in the country. (For example, Mississippi has one of the lowest homelessness rates in the country.)
It’s a national issue because people are mobile and will go to wherever the services are best. If San Francisco decides to house every homeless person who appears on its streets, it’s going to have to house every homeless person in America.
Coordination at the federal level could even out geographical imbalances in services and also prevent all services from having to be delivered in the few places where it’s most expensive to do so. Doing all the free housing in the most expensive market is crazy.
It's a national issue. That many states solved by shipping their homeless to California (like Texas, Oklahoma, and most of the Midwest do) or to their own local private prisons (like Mississippi and the rest of the South do).
Poverty and homelessness are near all-time lows in the US right now, comparable to Canada. You wouldn't know that by looking at the streets of San Francisco (or Los Angeles for that matter).
At a national level homelessness has declined dramatically since 2000. While San Francisco's problem has only kept getting worse. The US as a whole isn't seeing the homelessness problems that San Francisco is.
While San Francisco was doing nothing, the US implemented the Housing First program under the Bush Administration. That policy was continued and amplified by the Obama Administration, to extraordinary results: homelessness declined through the great recession, rather than skyrocketing as would have been predicted (especially coming out of a housing bust).
Unsheltered homelessness is down 20% since 2007. Total homelessness is down by 15% since 2007.
2013 > The federal Department of Housing and Urban Development reported that the number of the chronically homeless declined by 30% between 2005 and 2007. You might have expected the numbers to spike again when the financial crisis hit but no. Since 2007, the number of chronic homeless has dropped another 19%.
2008 > On a cold January morning in 2001, Mel Martinez, who was then the new secretary of housing and urban development, was headed to his office in his limo when he saw some homeless people huddled on the vents of the steam tunnels that heat federal buildings. "Somebody ought to do something for them," Martinez said he told himself. "And it dawned on me at that moment that it was me." So began the Bush administration's radical, liberal — and successful — national campaign against chronic homelessness.
Your missing the part where many states chose not to accept the housing funds, like Texas under Rick Perry, and instead just bought their homeless bus tickets to California.
Texas still just buys their homeless bus tickets to California. When I ask homeless people in LA where they are from, Texas is the #1 response. The LA Times just ran an article this week about people who to come LA seeking stardom and are homeless within a few weeks because they didn't bring enough money to pay rent because they thought they'd be a rich megastar within a few days.
It's truly fucked up for LA and SF to get blamed for having a homeless problem when most of the homeless in CA aren't even locals.
Please do some actual research here. Busing occurs, but everywhere does it (including SF) and it doesn't largely affect homeless population level in cities (because everyone is doing it). The vast majority of the homeless population in SF is from SF.
There's a lot I disliked about the Bush administration, but the HUD programs changed homelessness immensely. You wouldn't know it in California, but they arrive there by the busload daily. It's unfortunate. The SV echochamber of HN isn't exposed to the massive changes of the last 20 years.
Along the i5 from Seattle to San Diego the encampments have been growing. There are a few places where it goes away but mostly because of individual city efforts to do something. Source - been driving the route very actively last 5 years.
I’ll be honest though. I’m not sure new housing can actually work to lower prices, with all the incentives for real estate locked towards ever increasing prices. Maybe over decades, while losing the entire feel of the city?
When people say “homeless are everywhere” regarding SF, they’re probably referring to the extremely troubled people who are conspicuously doing drugs or screaming incoherently on the streets. I don’t think those people would suddenly be fine if only the SF apartments were $500 a month instead of $3000.
Of course, there are a lot more homeless people in SF than the very conspicuously unwell people I mentioned. There are also probably larger scale effects that together contribute to high rents, high income inequality, drug abuse, lack of medical care, etc. But there’s a lot more to say than that SF’s homeless problem is because rent is too high.
I'm curious about the ratio of those unwell folks who are native to the area compared to those who are transplants.
I can certainly imagine a 'homeless pipeline' where the children of the parents who get priced out of housing end up doing drugs on the street, but I also know about bussing the homeless and homeless moving to SF because they don't want to deal with a serious winter.
According to Wikipedia: As of 2014, the city is believed to have approximately 7,000 homeless residents. As of 2015, approximately 71% of the city's homeless had housing in the city before becoming homeless, while the remaining 29% came from outside of San Francisco
Homelessness is a very complicated issue, but it would absolutely be better for all people currently without homes if rent was that cheap. Many people who currently are living on the street or in shelters would be able to find stable housing. This would free up resources and care which could focus on those people who need it most.
I'm not from US and I'm not very informed about the homeless problem.
But I wonder why homeless people don't move to another city. If I'd be in their situation (living in a city where I can not afford to rent a house and live a normal life) I'd go to another city where with a regular job I can afford a normal life and just build my life there.
They get free services in San Francisco that they wouldn't in other cities. Also, many of the folks on the street during the day are actually housed, in public housing, and leave to do drugs since they will loose their housing if they do drugs at home.
Oh, they do move to another city. They move from homelessness in their original town, to homelessness in San Francisco, often with transportation paid for by their origin city/state's government, because SF has extremely lax drug and vagrancy enforcement, a mild climate, and easy access.
As mentioned elsewhere, this is simply not true, and you can do some very quick research to learn that it's not true. The vast majority of homeless people in SF are from SF. Stop being part of the misinformation problem.
People who tend to think like you, who can plan in advance, are willing to get a regular job, don't do drugs etc, rarely end up homeless, even in the US. Most of the visible homeless on the streets of large US cities are deeply dysfunctional people, and lower rents or public housing won't make them more functional. Getting them out of public sight would be improvement for the public, to be sure, but the policies of the US cities ran by liberals tend to be extremely ineffective with respect to getting them out of public sight.
> But I wonder why homeless people don't move to another city.
Because there are few cities in the country that are as accommodating to the homeless as SF. And I'm not talking about weather, I'm talking about services, aid, lack of police harassment, etc.
If you're homeless it's certainly the best place in the country to live.
They'll be plenty house as talented people continue to flee. Meanwhile juniors flock. If a CEO of a sizable Corp can't get by without a roommate something is wrong. I certainly wouldn't work there for less than a half plus million a year. Shit weather and fog I'd rather work in North Dakota.
I'm sure there are "startup CEOs" in that situation. I doubt there are many whose firms have office space and employees.
In my experience, the serial startup execs mostly don't live in the city. In the 90s, I knew several who also had an apartment near the office, but that's much less common now that the sort of place they'd want is going for $8K/mo.
My sample size is small but a company that raised 40 million and the CEO is considering leaving sv because his wife need to make rent with a roommate is not a great sign of the real estate. Sv isn't special. People are going to other tech hubs which are sprouting like crazy. Sv was when it made products. But sass can be done anywhere.
People are leaving sv and housing prices are the reason. It's going to lead to brain drain. Why bother with that congested hell hole when you can live anywhere else and cut your cost of living by 50 percent. Your average founder is 30 and they are not into partying. Sv is for 20 year olds
I would believe that a random startup employee might be considering leaving SV due to rent.
I wouldn't believe that a CEO of a company that has raised $40 million is leaving because his wife needs a roommate to make rent. His wife should probably live with him if she needs to save money.
I doubt that prices lead to brain drain. Sure there is a guy or two who will walk away. But I know more then a few people who are like: more then 2/3 of my pay to live in the city? No. Problem! Living in the city is super important!
I've seen it first hand with incredibly talented people that hated living in the city. There are plenty of tech hubs elsewhere. Sv isn't special. 2/3 of your pay is a bad decision unless you are being paid 600k+
I have a hard time believing this story. You can get 1-bedroom apartment around 3k in SF or neighboring areas. You can afford that with entry level wages
The gross receipts tax was Jack Dorsey's idea. As CEO of Square he lobbied for and received a switch to the gross receipts tax in 2012.[1] He only started complaining about "fairness" when it became about helping the homeless.
You merely mentioned fairness, but you didn't mention which aspect.
Jack has been vocal about wanting to pay tax by revenue (or whatever way) to the city. The point that he objects is that Square pays tax more than Saleforce, when Saleforce's revenue is way way more than Square's.
This is an example of US political debate.
Everyone immediately accuses the person of being evil (i.e. not wanting to pay tax and of hating homeless). But nobody actually answers why it makes sense for Square to pay more tax than Saleforce.
Square has the one office in SF, so essentially all of its gross proceeds arise from that office and are subject to the tax.
Salesforce has offices everywhere and a substantial amount of its revenues come from the work of employees outside of San Francisco. This revenue should not be subject to the SF gross revenues tax (and it would be illegal for SF to tax such income).
The question boils down to this: is the disparity in taxes reasonable given the SF-based gross proceeds generated by Square and Salesforce?
You're incorrect, Square has non-SF offices, too. I think @nrp has put it well in his comment https://news.ycombinator.com/item?id=21342101. Square is categorized differently than Salesforce by SF tax law and pays a different proportion of taxes than Salesforce.
Lol, what? San Francisco taxes revenue of businesses that are there? I had to google it to check because I couldn't believe a city would actually do something that stupid. But it seems its real:
> This is just....staggeringly stupid. It just penalizes low margin businesses, for no reason. How can anyone possibly think this is a good idea?
You might want to ask sf.citi, the SF tech industry lobbying group who came up with it in 2012. Here's a video of Jack Dorsey campaigning for the gross receipts tax as CEO of Square.[1]
The argument then, of course, was that we shouldn't tax early stage pre-revenue tech companies based on their payroll because it increases their burn rate. Better to wait until they generate revenue and tax that. Help support the growth of new companies so they can bring in more tax revenue in the long run. Or so the argument went.
Now that they're making money and it's time to pay up, of course, they've changed their tune. Suddenly they've discovered that the system they lobbied for and got is "unfair" and they still shouldn't pay taxes.
I mean, taxing payroll is just as stupid. You tax net income, because it's normalized across businesses. Taxing payroll or revenue is just economic nonsense.
Most businesses aim for net income. Most startups don't even try, even if they've raised hundreds of millions of dollars and occupy fancy offices. (It's also very easy for IP-based businesses to shift where income is generated.)
And that's the basic reasoning behind SF's gross proceeds tax. It's a uniquely SV tax that only works because so many unicorns built their house of cards out of claiming revenue for things no other business would claim as revenue.
Yes, it would be great if we could have some kind of Generally Accepted Accounting Practices that would specify what counts as net income and what doesn't.
> Net income isn't normalized across businesses.
> Most businesses aim for net income. Most startups don't even try, even if they've raised hundreds of millions of dollars and occupy fancy offices. (It's also very easy for IP-based businesses to shift where income is generated.)
Why would you want to tax a startup that isn't making any money? The whole point of government taxation is to generate revenue from profitable business activity occurring there. Taxing businesses that aren't even making money is ridiculous.
And sure, you can shift where profits are generated. But you can also just not be in SF. Which is exactly what's happening.
Sure, a net income tax doesn't tax the VC fueled companied sending people $2 for $1. But it would tax the owners of the fancy office they're renting for an absurd amount. And it would tax the catering service that's coming in 3x a day. And it may tax the office supply firm that's selling them the fancy chairs (maybe, not sure if office supply warehouses are in SF or on the peninsula).
I haven't researched this issue much, but I think it's fair to expect that the CEO of Square could have anticipated this becoming an issue if Square succeeded.
abalone's comment that "they've changed their tune. ... and they still shouldn't pay taxes" could simply be hyperbolic, depending on how charitable people are in their interpretation (e.g. "shouldn't pay [the full amount of] taxes").
I think the main thrust of abalone's comment stands: the CEO of Square pushed for a tax that many think is absurd (e.g. darawk), and now that Square has grown and the tax is unfavorable for them, Square wants to change the tax that it seems to have lobbied for (and presumably thought was fair back then) -- that makes Square seem opportunistic [and not having the community's best interest in mind when the CEO lobbied for the tax]. At least, I think that is abalone's implication.
I don't really see any problem with how Jack behaved.
Jack wanted companies to pay more tax to the city. He helped lobby it.
But this part where Saleforce pays less tax than Square is absurd. So, he's against it.
I don't really see any problem with this line of thinking.
To give the exact number, Square pays 20m, and Saleforce pays 10m. But Saleforce is 2-10x bigger than Square. No matter how you cut it. It's not fair.
I want people to pay more income tax as well (to fund other initiatives). But would I want to pay tax MORE than anybody else? Probably not. Does that make me a hypocrite? Hell no.
It just feels like people are being obtuse at this point :S
> Jack wanted companies to pay more tax to the city.
Uh, no. Jack has specifically and consistently lobbied against paying taxes (see: previous link). In 2011 he threatened to threatened to move Twitter to neighboring Brisbane unless he got the now infamous mid market tax break.[1] Exactly what Stripe just did. He greatly exaggerates the impact of a hypothetical $10M extra towards fighting homelessness on a $26B company with $3B in revenues.
The best response to this “fairness” line was from Marc Benioff himself, who said to Jack, ok, tell us how much you or Square or Twitter has given towards addressing homelessness in any other form. Crickets from Jack. He really doesn’t like paying taxes or giving.
Yet you still doesn't give a straight answer how it is fair that Saleforce pays less tax than Square. I don't blame you. Nobody has answered that question.
Even Benioff merely said ~$10m was nothing to Square. He implied it didn't matter that it wasn't fair because the amount was so little. Like Wut?
Because Square doesn't help homeless much (I don't really know how much compared to Saleforce and other companies), so we make a law for a smaller company to pay tax more than a bigger company? We can simply disregard fairness? Really?
Also, Jack explicitly said that he has no problem paying taxes to the city; he wants to pay tax fairly when considering peer companies. We just gonna need to agree to disagree on whether jack is willing to pay tax.
>> It just feels like people are being obtuse at this point :S
Maybe -- just maybe -- people understand your point but are bringing up something else that they think is relevant.
> Yet you still doesn't give a straight answer how it is fair that Saleforce pays less tax than Square. I don't blame you. Nobody has answered that question.
I don't think people are saying that the tax situation is fair. Rather, I believe the claim is that Square's CEO is likely not exclusively focused on the unfairness of the situation when he is complaining about the tax situation, but complains about tax in general. I think abalone wouldn't be giving Jack grief (or at least much less), if Jack did not lobby for that tax earlier.
To spell this out further with an extreme example, imagine a recent college grad who's super smart and has the attention of the world. He says "It's crazy that recent college grads are saddled with student loans. Instead, we should soak the rich and heavily tax everyone making $1 million or more." People agree, and the tax is instituted. A few years pass, and after his college debt is forgiven, this recent college grad is doing really well and finds himself making $2 million a year. At this point, he says "It's crazy that higher income workers pay such a high percentage of their income relative to others -- everyone should pay the same percentage." To which people respond "but then we can't forgive student debt with the reduced tax revenue," and yet the recent college grad persists. Do you see the problem with the behavior of the recent college grad?
It might be that the grad sincerely held his conflicting positions when he proclaimed them, but it's also possible that he was always advocating for what was advantageous to himself. Given the short time period (and that the grad makes no offer of accepting his college debt back), people generally guess that he using a sense of fairness to advance his own interests.
Again, I'm not very familiar with the situation, but it seems that the current tax is not a good one, and the CEO of a payments company could have foreseen that it would not be good for his company once his sales got rolling. Why didn't Jack advocate for some other tax scheme earlier, such as one that is based on net income?
> Lol, what? San Francisco taxes revenue of businesses that are there?… This is just....staggeringly stupid. It just penalizes low margin businesses, for no reason. How can anyone possibly think this is a good idea?
I don’t think anybody thinks that either the gross receipts tax (with different rates depending on industry) or the payroll tax (which included stock exercise in payroll) were good ideas. They are inferior alternatives to property taxes (which are capped and distorted by Proposition 13) and income taxes (which RTC 17041.5 prohibits local governments from raising).
What are you talking about? It specifically talks about it and even provides 2 quotes with contradicting points of view:
“Alex Tourk, spokesman for sf.citi, a tech business group, said San Francisco needs to consider changes to its business taxes. The city is currently reviewing the tax system, which brings in a total of $1 billion annually. But those taxes could climb higher under the revised system.
“Unfortunately, Stripe choosing to leave town is not an anomaly,” he said. “The membership of sf.citi would prefer a more holistic strategy per the mayor’s suggestion that we work together as a collective business community to fix the gross receipts tax once and for all and establish a fair and equitable tax system that we can all rely on.”
Chris Thornberg, founder of Beacon Economics, said businesses leaving San Francisco has more to do with real estate costs and high wages than taxes.
“Taxes don’t have a lot of impact on business decisions. It’s something that has been exaggerated for years,” Thornberg said. Stripe is staying in the Bay Area, so its departure isn’t a blow to the region, he said.”
I doubt the wages are going to be appreciably different in South San Francisco. Office rents is probably one reason, but the gross receipts tax is almost certainly the biggest reason for the move.
There’s also the impact of Prop M, which caps new office square footage created yearly. Stripe may not be able to find contiguous space big enough for their expected growth even if they wanted to stay in San Francisco.
> Taxes don’t have a lot of impact on business decisions.
Said nobody involved with any big business. Amazon in New York, Apple’s avoidance of repatriating cash, etc. Taxes have a massive impact on business decisions all of the time.
This kind of ignorant thinking is what destroyed the yacht manufacturing industry in the US. “Oh, what difference can a small tax make? Whoops, doesn’t matter because I’m a politician and I’m immune to consequences.”
Businesses say that taxes make a huge impact because they don't like paying taxes.
But they do business where they need/want to do business, regardless of the tax situation. Complaining about taxes is just an attempt at leverage to get tax rebates/concessions/exemptions/etc or to structure the final holding company in a way that artificially shields profits so the executives can pay themselves larger salaries and bonuses.
Source: I was a former tax/legal advisor for a number of multinational companies. Out of a few hundred tax structurings, I can count on one hand the number of times that tax rate differentials affected material operational decisions.
Yeah. Salesforce probably has north of 50% margins. Eating 1% is annoying but livable. A Square or Stripe type business probably has under 5% margins, making this a tax of 10 to 20 percent of profit.
Unless things changed over the summer, Square is not profitable, so this is just an additional major expense that makes profitability harder to achieve.
I have a credit card that gives me 1.5% cash back on every transaction. I'm reading that Visa typically charges 2.3% to merchants, and Stripe charges 2.9%, ignoring per-transaction fees. So Stripe itself probably gets around 0.6% of each transaction, and at least on average 1% of each transaction goes to cardholder bonuses, and the card issuer gets around 1.3%. Of course both Stripe and the issuer have some fraud prevention built-in, I don't know how much that amounts to (and how much more effective China is at combating fraud, though it's possible WeChat simply doesn't accept as much liability as American payment processors do.)
Your conflating fees charged to Merchants (by processors) and rewards offered to Card Holders (by issuers).
While often the same bank performs, or is a partial owner involved in, both processing and issuing, the percentages you quote are largely disjoint.
> I'm reading that Visa typically charges 2.3% to merchants ...
The Discount Rate[0] a Merchant pays varies significantly based on the line-of-business, charge-backs, processing contract, and a bunch of other things.
> ... at least on average 1% of each transaction goes to cardholder bonuses ...
Again, issuer costs have no bearing on Merchant fees nor the profitability of processors.
I don't think that is correct. Merchants are charged different rates based on the cash back rates of a given card. Merchants have to eat most of that cash back being given to the card holders.
Interchange fees are higher on premium (rewards) cards. The merchant may contractually pay a fixed percentage that accounts for the expected mix of cards, but those rewards absolutely come from merchant fees.
There are entire organized crime rings and many, many individuals that specialize in merchant account fraud. In the early 2010's people were creating stripe accounts and processing up to $100,000 fraudulently. I'm not sure who ate that, but it surely had an impact on their bottom line. I had screenshots from Alphabay of over $5,000,000 in fraudulent charges on merchant accounts. If Stripe only makes 1% of transaction cost and has to eat the fraud then they'd have to charge $500,000,000 to just make up what was posted in a single "mastermind group". That is crazy...
> I have a credit card that gives me 1.5% cash back on every transaction
Some of this is paid for by people carrying balances. The bet is that cash back will attract enough people to get and use the card that, in aggregate, interest will make up for cash back.
For a payment processor, does "gross receipts" include the full amount of the purchase, or just the amount that Stripe takes (e.g. 2.9% + $.30).
If it's the full amount of a purchase, not only is that insane, but it really feels like double dipping, as the seller would have to pay the tax on their receipts as well.
It doesn’t miss that...it actually says it wasn’t a big factor (though take with grain of salt). I can buy that they needed more space, and that it would be cheaper there then elsewhere.
> Payment processing is an ultra low margin business, no way they can compete while paying ~1% of revenues to the city.
Stripe charges %2.9 + $0.30 per transaction.
That is not an "ultra low margin" by any means in the CC processing domain. Actually, that is a massive markup when compared to other ISO's and VAR's.
Depending on the Merchant's processor and their volume, significance, and sophistication, their Discount Rate[0] is often well less than the %2.9 Stripe demands. The fact that Stripe also tacks on another $0.30 USD on top of the top-end Discount Rate for their transaction fee is insane (see here[1] and here[2] for some context and these don't even account for fee negotiations).
And to suggest "no way can they compete while paying ..." is to ignore Stripe has a valuation at/near $35,000,000,000 USD[3].
Regarding their pricing to low-touch customers, like anyone just signing up on the website, yes, it's a very good margin for a payment processor. But the trick is that nobody processing a million a day + is going to pay that. They'll negotiate, hard, or change providers. I suspect most of them are in more traditional cost plus contracts: 5c-50c take per transaction, even though the entire bank processing fee is counted in revenue. In those cases, the local tax would put SF companies at a major disadvantage vs Adyen, which doesn't pay a tax on revenues.
Given that Stripe is already not a major player for those very large companies, 1% of revenues on merchants that have high average transaction sizes means they might as well not show up to the negotiating table, as their break even point will be more expensive than other's best offer.
The question is how much of that is gross revenue?
Many take the position that the portion that Stripe pays to Visa/MC is not gross revenue to Stripe because it was never their revenue; they were just collecting money the merchant would have owed to Visa/MC. If so, then Stripe's gross revenue is only the $1 they have left after paying Visa/MC on the merchant's behalf.
But others take the position that the entire $3.20 is gross revenue to Stripe, and that the amount they pay to Visa/MC is a COSS of that revenue.
If Stripe pays Visa/MC less for that $100 transaction than the merchant would if Stripe weren't involved, than it's clear that the $3.20 is gross revenue to stripe and the Visa/MC fee is a COSS. But if Stripe would owe Visa/MC the same as the merchant would, then arguably the Visa/MC was never revenue to them in the first place. It comes down to the terms of the contract--is Stripe merely forwarding on the merchant's Visa/MC fee or is it assuming that liability on behalf of the merchant?
When it was growing, Stripe took the position that the entire $3.20 was gross revenue, because it made them look good. (See also, Groupon, Uber.) Now that they're a very big company though, it makes them look too good for tax purposes, even if the financial reality is very different. But having chosen their accounting method, they're stuck with it.
The item specifically relevant to Stripe is that it's categorized as a Financial Services rather than Information company. Financial Services companies have to allocate gross receipts based 50% on their payroll location and 50% based on their sales location. So while their portion of sales in San Francisco is negligible, most of their payroll is there.
I have a hard time believing most of their payroll is here. Strip is fairly disturbed and probably has huge ops and customer service teams in low cost locations. Their payroll footprint in the city, while significant, will not be burdensome when it comes to gross receipts
Payroll tax is based on apportionment of payroll expense, rather than headcount. It also includes stock based compensation. I'd guess most of their payroll expense is in San Francisco.
Literally Stripe wrote a blog post on this on how Prop C will really hurt companies like them which have high gross receipts but very thin margin. But at the time, half the people accused them of being intolerant to homelessness and the city that supports them. Marc Benioff, the sponsor of Prop C, can do this given he has a SaaS company with high margins and the fact that he has political ambitions.
This is an expected outcome given that. What this means is more cars on streets as South San Francisco has pretty bad infra and driving/taking shuttles is the only way to get to the new Stripe office.
It seems like raising prices from 2.9% to 2.93% would cover the tax. (I assume they don't want to go to 3% because that looks like a huge jump.) The real question in my mind is why does Stripe bother to exist if they're barely breaking even.
