Powerful Dem group unleashes $10M to kill ‘CEO tax’ that would ‘destroy’ San Francisco

A powerful San Francisco group is unleashing $10 million this year to kill taxes that they say will destroy the city’s fragile economic recovery — and potentially increase the price of food and goods for already cash-strapped residents.

Neighbors for a Better San Francisco, a moderate advocacy group, plans to beat back a wave of lefty initiatives and candidates this year that they say will derail years of progress in liberal San Francisco, according to its director Jay Cheng.

One of the group’s main targets is a so-called “CEO tax” — a June ballot measure backed by progressives and labor unions that doesn’t tax individual executives but rather companies with a large gap between what the top executive and the median worker earns.

“It’s going to destroy our economy overnight, there’s no question,” said Cheng.

Shops like Nordstrom, the Gap, Starbucks, Target, Chipotle, Ross Dress for Less, CVS and Grocery Outlet would face huge tax increases — passing costs onto consumers or even ditching the city entirely, according to Cheng.

“If the CEO tax passes in June, the message to business is you can’t reliably predict what your tax bill will be year over year,” he said.

“Your tax bill will suddenly be 800% higher — no business can plan around that.”

San Francisco has an existing “overpaid CEO” tax that adds a surcharge to companies’ bills based on the ratio of executive and worker pay.

The new CEO tax, pushed by the SEIU and other labor groups and leftist elected officials such as Supervisors Connie Chan and Jackie Fielder, would dramatically increase that surcharge for firms whose highest-paid exec earns more than 100 times the median worker. Organizers say it could raise $200 million annually to preserve “essential city services.”

Fielder, a Democratic Socialist, is also pushing a tax on financial institutions to fund a San Francisco “public bank.”

It’s part of a rash of populist tax proposals statewide that take aim at top earners. A similar effort to tax companies with “overpaid CEOs” is underway in Los Angeles.

The San Francisco group plans to campaign against the statewide billionaire tax proposal that critics say could drive $1 trillion in wealth out of California.

“If we can get the wealth tax to 50/50 in San Francisco, it’s dead statewide,” Cheng said.

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Steven Buss Bacio, co-founder of the moderate political group GrowSF, echoed concerns about the CEO tax, though his group is studying the issue before making a formal statement.

“It does not tax CEOs, it taxes consumers,” he said. “It is effectively a tariff on goods in San Francisco.”

Neighbors for a Better San Francisco is also backing San Jose Mayor Matt Mahan’s gubernatorial campaign and moderate candidates for Board of Supervisors and school board, Cheng said.

The influential group played a key role in San Francisco’s recalls of far-left District Attorney Chesa Boudin and three members of the progressive school board in 2022.

Its primary backer has been the billionaire Republican donor Bill Oberndorf, though it increasingly receives funding from smaller individual donors, Cheng said.