More news is coming out of the San Francisco technology hub this week as companies in the area are demanding tax breaks or threatening to take their businesses elsewhere. Twitter and Zynga are two companies that are leading the charge against the cities payroll tax that demands 1.5% of employee compensation for any company with a payroll higher than $250,000. For technology giants this tax ends up losing them tens of millions of dollars.
The payroll tax was instituted during the 90s technology boom as a method of easy revenue for the city. But, San Francisco is that only county in the state with such a stature and this makes technology employers unhappy. Unhappy to the point where they are threatening to leave if something doesn’t change. City officials are also worried that all the buzz is going to give San Francisco an anti-business reputation, something no one wants. Technology companies are pointing to the payroll tax break that the city provided for biotech firms seven years ago. Since then, dozens of new biotech companies have moved to the areas and technology firms are arguing that this could once again be the case if tech companies are provided with the break.
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