News

'Google tax' heads to voters in November

New tax would draw $5.9 million from private employers

A new headcount tax aimed at the city's high-profile tech companies will go before voters this November. In a heated Tuesday night meeting, the City Council unanimously backed plans for a top-heavy tax increase that would raise about $5.9 million each year if approved -- with Google alone paying more than half that amount.

What some are calling the "Google tax" is Mountain View's strategy for funding a suite of transportation improvements, especially an ambitious goal to build a new automated transit system. Given that tech employers are causing much of the area's traffic, council members say it is appropriate for those companies to carry most of the costs of the new business license tax.

For that concept there was widespread agreement, but the finer details of crafting a tax structure led to a painfully long debate during the council's final meeting before a summer recess.

In the end, the council endorsed a tiered tax system similar to what they approved in past meetings. This tax system would charge a headcount fee that would increase with the size of the business. As an example on the lower end, Trader Joe's with its 63 employees would pay up to $75 for each worker. Meanwhile, Google -- by far the city's largest employer with its 23,000-person workforce -- would pay up to $150 per employee.

All businesses with two or more workers would pay a per-employee fee. The cost for most business licenses would also increase from the current price of $34. The flat fee for licenses would now cost $75. Businesses earning less than $5,000 in annual revenues would be exempt.

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Despite having the most at stake, Google has been officially silent on the proposed tax increase. In private conversations with Google officials, elected leaders say the company's representatives haven't signaled any major opposition to the proposal, yet the company hasn't taken any formal position. The company has declined to comment on the tax to the Voice.

Nevertheless, the tech giant seemed to have no shortage of proxy defenders on Tuesday night. Business representatives from organizations including the Silicon Valley Leadership Group and the Mountain View Chamber of Commerce made a last-ditch effort to urge city leaders to exercise restraint on the tax plan.

Chamber of Commerce CEO Bruce Humphrey presented an alternative plan to lower the proposed tax on the city's largest employers to $90 per employee while forcing smaller businesses to also pay a higher per-worker fee.

The plan baffled council members, and they pointed out it would dramatically increase the cost burden on small businesses with less than 50 employees. Councilman Ken Rosenberg, who previously served as the chamber's board chairman, didn't hide his irritation that the business group seemed to be going against the interest of its smaller members.

"The chamber board is (putting forward) a model that your membership won't support," he said. "I'm a chamber member, and I would be outraged at this model."

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Humphrey repeatedly explained he was working under the guidelines made by his board of directors. Google's government affairs director, Javier Gonzales, is one of about 19 regular members of the board.

"This spreads the tax burden out among all businesses and it doesn't rely on one business to carry 60 percent of the burden," Humphrey explained. "We understand that for some small and medium-sized businesses, this tax is larger."

That viewpoint elicited some support on the council. Councilwoman Lisa Matichak embraced the chamber's plan, explaining that the business group's support was vital for the city to maintain. She described the council's preferred plan as "rushed" -- although city staff pointed out there have been 20 public meetings so far on it.

Echoing similar concerns, Councilwoman Margaret Abe-Koga warned that Mountain View was taking risks if it relied too much on Google as a tax source.

"It might be Google today, but who knows who it's going to be in five to 10 years?" she said. "We need to try and come up with a model that doesn't hit one group really hard."

City officials pointed out that the tax measure's language gives them discretion to potentially lower the business license fees in future years, in the event of an economic recession, for example. If approved by voters, the measure would be phased in over the next three years.

"We won't be cramming this down anyone's throat," said Councilman Chris Clark. "When it's a boom time, perhaps there's a higher phase-in, and during recessions, we can scale this back."

The business license tax maintains significant support, with about 62 percent of Mountain View voters indicating they would vote for it, according to new polling data by the firm FM3 Research. Right now, the measure would need a simple majority to pass, but that could change.

City Manager Dan Rich warned the city business tax could be impeded by a statewide ballot initiative that would force all local tax measures to have at least a two-thirds majority to pass. This measure was being sponsored by the American Beverage Association as a way to counter the push by many cities to enact soda taxes.

On Thursday, the soda industry abruptly dropped their ballot initiative, after state lawmakers signed a moratorium barring local government agencies from enacting new soda taxes.

In a final batch of tweaks to the tax measure, the council stipulated special rules that would allow companies with remote or seasonal workers to basically prorate their business license fees.

The tax measure was approved for the ballot in a unanimous vote. The council also approved plans for a November tax ballot measure on marijuana sales in the city. The tax could go as high as 9 percent, but members indicated they could lower that amount if it became too restrictive. If approved it would generate $1 million per year.

Correction: An earlier version of this story misstated some of the cost tiers for the tax increase

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'Google tax' heads to voters in November

New tax would draw $5.9 million from private employers

by / Mountain View Voice

Uploaded: Wed, Jun 27, 2018, 6:15 pm

A new headcount tax aimed at the city's high-profile tech companies will go before voters this November. In a heated Tuesday night meeting, the City Council unanimously backed plans for a top-heavy tax increase that would raise about $5.9 million each year if approved -- with Google alone paying more than half that amount.

What some are calling the "Google tax" is Mountain View's strategy for funding a suite of transportation improvements, especially an ambitious goal to build a new automated transit system. Given that tech employers are causing much of the area's traffic, council members say it is appropriate for those companies to carry most of the costs of the new business license tax.

For that concept there was widespread agreement, but the finer details of crafting a tax structure led to a painfully long debate during the council's final meeting before a summer recess.

In the end, the council endorsed a tiered tax system similar to what they approved in past meetings. This tax system would charge a headcount fee that would increase with the size of the business. As an example on the lower end, Trader Joe's with its 63 employees would pay up to $75 for each worker. Meanwhile, Google -- by far the city's largest employer with its 23,000-person workforce -- would pay up to $150 per employee.

All businesses with two or more workers would pay a per-employee fee. The cost for most business licenses would also increase from the current price of $34. The flat fee for licenses would now cost $75. Businesses earning less than $5,000 in annual revenues would be exempt.

Despite having the most at stake, Google has been officially silent on the proposed tax increase. In private conversations with Google officials, elected leaders say the company's representatives haven't signaled any major opposition to the proposal, yet the company hasn't taken any formal position. The company has declined to comment on the tax to the Voice.

Nevertheless, the tech giant seemed to have no shortage of proxy defenders on Tuesday night. Business representatives from organizations including the Silicon Valley Leadership Group and the Mountain View Chamber of Commerce made a last-ditch effort to urge city leaders to exercise restraint on the tax plan.

Chamber of Commerce CEO Bruce Humphrey presented an alternative plan to lower the proposed tax on the city's largest employers to $90 per employee while forcing smaller businesses to also pay a higher per-worker fee.

The plan baffled council members, and they pointed out it would dramatically increase the cost burden on small businesses with less than 50 employees. Councilman Ken Rosenberg, who previously served as the chamber's board chairman, didn't hide his irritation that the business group seemed to be going against the interest of its smaller members.

"The chamber board is (putting forward) a model that your membership won't support," he said. "I'm a chamber member, and I would be outraged at this model."

Humphrey repeatedly explained he was working under the guidelines made by his board of directors. Google's government affairs director, Javier Gonzales, is one of about 19 regular members of the board.

"This spreads the tax burden out among all businesses and it doesn't rely on one business to carry 60 percent of the burden," Humphrey explained. "We understand that for some small and medium-sized businesses, this tax is larger."

That viewpoint elicited some support on the council. Councilwoman Lisa Matichak embraced the chamber's plan, explaining that the business group's support was vital for the city to maintain. She described the council's preferred plan as "rushed" -- although city staff pointed out there have been 20 public meetings so far on it.

Echoing similar concerns, Councilwoman Margaret Abe-Koga warned that Mountain View was taking risks if it relied too much on Google as a tax source.

"It might be Google today, but who knows who it's going to be in five to 10 years?" she said. "We need to try and come up with a model that doesn't hit one group really hard."

City officials pointed out that the tax measure's language gives them discretion to potentially lower the business license fees in future years, in the event of an economic recession, for example. If approved by voters, the measure would be phased in over the next three years.

"We won't be cramming this down anyone's throat," said Councilman Chris Clark. "When it's a boom time, perhaps there's a higher phase-in, and during recessions, we can scale this back."

The business license tax maintains significant support, with about 62 percent of Mountain View voters indicating they would vote for it, according to new polling data by the firm FM3 Research. Right now, the measure would need a simple majority to pass, but that could change.

City Manager Dan Rich warned the city business tax could be impeded by a statewide ballot initiative that would force all local tax measures to have at least a two-thirds majority to pass. This measure was being sponsored by the American Beverage Association as a way to counter the push by many cities to enact soda taxes.

On Thursday, the soda industry abruptly dropped their ballot initiative, after state lawmakers signed a moratorium barring local government agencies from enacting new soda taxes.

In a final batch of tweaks to the tax measure, the council stipulated special rules that would allow companies with remote or seasonal workers to basically prorate their business license fees.

The tax measure was approved for the ballot in a unanimous vote. The council also approved plans for a November tax ballot measure on marijuana sales in the city. The tax could go as high as 9 percent, but members indicated they could lower that amount if it became too restrictive. If approved it would generate $1 million per year.

Correction: An earlier version of this story misstated some of the cost tiers for the tax increase

Comments

Welcome to the future
Registered user
Willowgate
on Jun 27, 2018 at 7:09 pm
Welcome to the future, Willowgate
Registered user
on Jun 27, 2018 at 7:09 pm


Google was fined 2.7 Billion in E.U. last year and is still doing business there. The parent company of Google's Alphabet revenues in 2017 were $110.9 billion.

I propose that instead of "Google Head Tax" that will net measly $6.1 million, the city takes, for example, less than a quarter of overall yearly revenue. In addition to the most fantastical transit improvements the money will pay for, I suggest we use the windfall to provide every resident with Guaranteed Minimum Income, free education, paid for medical care and, of course, ice-cream on Sundays. Who would be against THAT?

Are we serious about building the future or what?


@Welcome to the future
Old Mountain View
on Jun 28, 2018 at 2:27 pm
@Welcome to the future, Old Mountain View
on Jun 28, 2018 at 2:27 pm

Are you joking? The EU consists of 28 countries with significant populations vs Mountain View, one small city in California. The EU brings in much more revenue to Google than the lone city of Mountain View could ever bring.

If your intention is to force Google out of Mountain View, that's an entirely different matter that requires more thought, analysis and conversation than the comment section of this article could alone achieve.


Robyn
another community
on Jun 28, 2018 at 2:42 pm
Robyn, another community
on Jun 28, 2018 at 2:42 pm

Just the congestion added by the mass of people degrades our quality of life. How many additional hours do you spend in traffic due to the traffic they have brought here?
For most people time spent in traffic commuting is not compensated.
Let them pay for a part of the mess they created.
If this is a fair way to do it, so be it.


Google sucks, but....
North Whisman
on Jun 28, 2018 at 2:44 pm
Google sucks, but...., North Whisman
on Jun 28, 2018 at 2:44 pm

Google has overstepped it’s welcome. No doubt about that. I'd love to see them go elsewhere!

However, the city’s tax, tax, tax approach, when they should have incorporated city planning and environmental impact prior to building and forced comoanies to include infrastructure in the building process, is just another ’better them than me’ tax.

Stupid, foolish, greedy politicians. Crazy, unethical, money grubbing businesses. They deserve each other. They’re slready in bed together. Why force voters and other companies to take the brunt of Google and city officials’ corrupt planning?


Cowards
Old Mountain View
on Jun 28, 2018 at 4:38 pm
Cowards, Old Mountain View
on Jun 28, 2018 at 4:38 pm

Why did the city council not take a direct vote on the tax? Because they want to hide behind the leftist voters of MV and insulate themselves for when they run for statewide office after they term out in MV.


William Hitchens
Registered user
Waverly Park
on Jun 28, 2018 at 5:15 pm
William Hitchens, Waverly Park
Registered user
on Jun 28, 2018 at 5:15 pm

Taxpayers would do MV a great favor by approving the "Google Tax". Maybe Google will leave and take all of the horrible housing and traffic problems it has forced upon Mountain View --- with an ignorant city council's blessing. San Jose wants to "revive downtown San Jose". Let them have Google. They'll find, just like downtown MV, that nothing will revive downtown San Jose. The'll just get an enormous housing and traffic crisis.


Realist
another community
on Jun 28, 2018 at 7:27 pm
Realist, another community
on Jun 28, 2018 at 7:27 pm

The tax doesn't really charge Google more. Loads of their workers are
contractors and they won't see a very big tax because the employers are out of
the city and have a relatively small number working in the city. Maybe as many
as 5000 Google workers are going to be charged way less than $150 per head.

Then consider the holding company set up. Alphabet has a few direct employees,
but probably well under 1000. Entities like Waze and Project Fi employee a number of Alphabet workers in the city, but not over 1000 or so. The so called Google itself is probably primed to be broken up into different employing entities, if this is not already the case.

No, Google's not pay more than most companies.


Sally
Old Mountain View
on Jun 28, 2018 at 10:50 pm
Sally, Old Mountain View
on Jun 28, 2018 at 10:50 pm

The fee for Google will be tiny and Google can play games and reduce the charge to half of tiny. This measure is a waste of time. It will not raise enough money to do anything except maybe further pad the pockets of some city employees.


It works this way
Registered user
Gemello
on Jun 29, 2018 at 12:10 pm
It works this way, Gemello
Registered user
on Jun 29, 2018 at 12:10 pm

All tax decisions have to go to the voters. The Council can't raise a tax on its own. Anybody complaining about the Council (above) for doing this can simply vote no if you don't want the entities responsible for creating the traffic demand to pay for traffic improvements. But you know if this fails, YOU personally will be taxed. Which would you prefer?


YIMBY
Another Mountain View Neighborhood
on Jun 29, 2018 at 6:21 pm
YIMBY, Another Mountain View Neighborhood
on Jun 29, 2018 at 6:21 pm

Lots of retired people here advocating for policies that directly harm those of us still in the workforce. Can't say I'm surprised.


AdamSmith
Shoreline West
on Jul 18, 2018 at 5:36 pm
AdamSmith, Shoreline West
on Jul 18, 2018 at 5:36 pm

Business is good when they do good for the community. I can see communities giving tax breaks for setting up plants IF they will hire ‘existing’ local people; but many of FB, Google, Amazon, etc staff are being ‘imported’. These folks buy online, thus depriving local businesses revenue, and communities of sales tax revenue. “You break it you pay for it.” seems to be a reasonable solution. These companies have ‘broken’ the infrastructure - transportation, housing [prices/ rents], and pollution. A reasonable tax-per-employee would be arised at by computing the costs assiciated with the problems created. Housing alone would be about $250/yr, traffic congestion should be about 200+ extra hours in traffic per year - ie at min wage $3000/yr, and pollution would be another $1000/yr. So this $150per year per employee is really a giveaway!! It should be closer $4250!! for each added employee since say 2010.

Dont like it? Go away.


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