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Communities Getting Wise to Corporate Welfare… and Corporations are Pusing Back

December 7, 2018

A November 5 Atlantic article by Alana Semuels described grassroots movements on the west coast to force large tech companies to pay higher taxes to help their communities deal with problems created by the presence of these corporations. in the article, Ms. Semuels describes the phenomenon thusly:

For decades, technology entrepreneurs have established their headquarters in the San Francisco Bay Area, created products that changed the way we live, and reaped millions doing so. But at the same time, the cities around these companies have become harder and harder to live in. Housing prices and homelessness are rising, roads are clogged, transit is over capacity. Tech companies aren’t necessarily causing these problems, but they do have a lot more money than anyone else in today’s economy. So cities are asking those who benefit the most in this economy to pay more money to help solve urban and suburban problems…

In San Francisco, Mountain View, and East Palo Alto, ballot referendums would impose additional taxes on big companies to solve problems related to a lack of affordable housing and funding for transportation. And tech companies are being forced to ask themselves whether they’re willing to play an active role in changing their neighborhoods, not just the world at large.

“We have to come to some kind of reckoning that when you make millionaires out of people, and they buy houses for millions of dollars, other people are going to be on the end of that,” Glenn Kelman, the president and CEO of Redfin, which supported the Seattle head tax, told me about tech leaders. “We’ve always viewed ourselves as the hero of every story, and we’re about to see that we may be the enemy of this one.

They may well be the enemy because when their tax breaks go into the pockets of their billionaire board members and those board members decide to spend their money on foundations that fund projects outside of the local area, residents are forced to ask why their schools are underfunded, housing is impossible to find, and roads are hopelessly clogged.

Much of the article focused on Proposition C, a referendum that sought to modify the tax structure in San Francisco in a way that would help the government— NOT philanthropists–  address homelessness. One tech CEO supported the passage for hard-headed business reasons:

Philanthropy alone also can’t solve all the problems facing some of these cities.Benioff and Friedenbach, of the Coalition on Homelessness, said that the only way to solve San Francisco’s homelessness problem is to spend more — treat more severely ill people, permanently house more people, prevent more evictions, create more emergency shelters and more public restrooms. “With 7,500 homeless, this has gotten way beyond any one particular philanthropist,” Benioff told me.“We all have to come together to make this happen.”

Proposition C DID pass, despite the mixed support it received from tech companies whose CEOs did not see eye to eye with Marc Benioff, CEO of Salesforce’s CEO. It would be refreshing to see Mr. Benioff gather like minded CEOs to support voters coming together to solve complicated problems like homelessness, mental health… and public education. Maybe instead of focusing time and energy on creating “customer focused” education the CEOs could focus time and energy creating “citizen focused” education.

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