What This Measure Is

This is a San Francisco–only ballot initiative.
It does not apply statewide.

It strengthens and expands San Francisco’s Top Executive Pay Tax by:

• Changing how executive pay is compared to worker pay

• Increasing tax rates on companies with extreme pay gaps

• Preventing future reductions without voter approval

• Making the tax apply indefinitely unless voters repeal it

How the Tax Works Now

San Francisco currently has three related business taxes:

1. Gross Receipts Tax

• Based on San Francisco revenue

• Rates range from 0.1% to 3.36%

• Many businesses with $5 million or less in SF receipts are exempt

2. Administrative Office Tax

• Applies to companies where over half of payroll is administrative or management

• Taxed at 1.47% of SF payroll

• Used instead of Gross Receipts Tax for certain large companies

3. Top Executive Pay Tax (Current Version)

• Applies when a company’s highest-paid executive earns more than 100× the median pay of SF employees

• Adds an extra tax on top of the two taxes above

• The Board of Supervisors can currently reduce the tax without voter approval

What This Measure Changes

1. Broader Pay Comparison

• Compares the highest-paid executive’s pay to the median pay of all employees, not just San Francisco–based workers

Why this matters:
Large companies often pay many workers outside San Francisco. This change makes the comparison harder to avoid.

2. Significantly Higher Tax Rates

Starting in 2027, the additional tax would increase to:

Businesses Paying Gross Receipts Tax

• 0.183% to 1.121% of San Francisco gross receipts

Businesses Paying Administrative Office Tax

• 0.75% to 4.47% of San Francisco payroll expense

These rates apply only when executive pay exceeds 100× the median worker pay.

3. Limits City Hall’s Ability to Lower the Tax

• The Board of Supervisors would be prohibited from reducing the Top Executive Pay Tax

• Any reduction would require voter approval

4. Makes the Tax Permanent

• The tax would continue indefinitely until repealed

• Adjustments allowed only for inflation (Consumer Price Index)

• Revenue remains available for general city purposes

Spending Limit Change

• Temporarily increases San Francisco’s legal spending limit for four years

• Allows the City to actually spend the additional revenue

How the Money Is Used

Revenue goes to San Francisco’s General Fund, which supports:

• Public health and hospitals

• Emergency services

• Social services

• Housing and public safety

• General city operations

Why Supporters Say It’s Needed

Supporters argue:

• Executive pay has increased dramatically while worker pay has barely grown

• A prior version of this tax raised up to $140 million per year

• Changes to business taxes in 2024 reduced the impact on large corporations

• Public services rely heavily on stable local revenue

Common Questions

Is this a new tax?

No.
It expands and strengthens an existing tax approved by voters.

Does this affect small businesses?

Generally no.
It targets large companies with extreme executive pay gaps.

Is this statewide?

No.
It applies only within San Francisco.

Where This Appears on the Ballot

• San Francisco local ballot

• Voted on by San Francisco residents only

• Title focuses on executive pay comparison and business taxes

Bottom Line

• Raises taxes on companies with extreme executive-to-worker pay gaps

• Uses a broader, harder-to-game pay comparison

• Locks voter control over future changes

• Funds core San Francisco services