President Obama is correct when he denigrates tax breaks for big business that aren’t available to the rest of us. But politicians love these breaks. They love bargaining with big businesses, offering special deals, and extracting promises in return.
San Francisco has cut such deals with Twitter and other companies. Justine Sharrock at Buzzfeed has the details:
Twitter and six other San Francisco tech companies are set to receive sizable tax breaks from the city in exchange for charitable contributions totaling, in many cases, just tens of thousands of dollars — along with promoted tweets for local groups.
The tax deal also includes promises to volunteer in the community and patronize local businesses, according to draft Community Benefits Agreements that could be signed and finalized by the city as early as tomorrow….
The tax breaks exempt companies in the mid-market neighborhood from the city’s 1.5% payroll taxes on new hires for six years. Twitter tax breaks are estimated to be worth $22 million over six years. ZenDesk, the only company to share its financial information with BuzzFeed, offered an estimate of $36,248 in tax breaks in 2012….
Overall the agreements include boilerplate plans to make donations, spend money at local businesses, hire people from the community, and volunteer at organizations and schools — both through paid volunteer days and a more amorphous encouragement of employees to do so — with some specific additions.
Each company has been assigned a community liaison to get feedback from local groups throughout the year. There will be quarterly reviews by the city’s citizen advisory committee.
The community’s biggest priority was to make sure the companies hired people from the neighborhood, particularly for non-internship entry level jobs such as custodial work; however, the agreements fell short on those goals. All the CBAs included a promise to train and hire people from the city’s First Source Hiring job placement program, which serves the economically disadvantaged, and vaguer promises to look for employees in underemployed populations.
More concretely, Twitter pledged $60,000 in grants to nonprofits, $50,000 in IT equipment and computers to schools and youth organizations, and $60,000 worth of credit for promoted tweets to local organizations. Twitter’s volunteer plans include providing social media training and consultation for at least 15 nonprofits and pro bono legal aid, along with the Volunteer Legal Services Program of the Bar Association of San Francisco, to help people facing eviction. It is planning to build an online housing database that lists vacancies, wait-list status updates, income qualifications, and contact information for local affordable housing and homeless shelters. Beyond its two paid employee volunteer days, it will send employees to the Project Homeless Connect annual event, and host a tree-planting day.