San Francisco might start taxing tech companies to help its homeless problem

San Francisco city officials have found a possible solution to the city's homelessness problems: taxing tech companies.

The proposal, which was introduced by three city legislators last week, would require the city's tech firms to pay a 1.5% payroll tax, which would be used to pay for programs for the homeless and to aid in solving San Francisco's affordable housing issues, according to The New York Times.

The tax could raise nearly $140 million each year and would help the city balance its $9.6 billion budget. It could be a preemptive step to help the city's economy as the tech boom slows down - City Controller Benjamin Rosenfield told The Times the he can already see "signs of cooling."

The tax would affect companies like Twitter, who received tax breaks to stay in the city of San Francisco instead of moving out to Silicon Valley. Known as the "Twitter tax break," the incentive allowed companies to avoid $34 million in city payroll taxes for moving to a neighborhood called Mid-Market.

According to The Times, critics say this latest tax proposal has a lot of flaws - namely, that it wouldn't affect big Silicon Valley tech firms who are located outside of the city's jurisdiction but whose employees still contribute to the housing crisis, and it would also be hard to say what qualifies as a "tech company."

The proposal would need to be supported by six out of 11 Board of Supervisors members to even appear on November's ballot, and would then need the support of two-thirds of voters, which means the so-called tech tax is about to face a steep uphill battle to get approval.

You can read more about the new proposal over at The New York Times.