SF's Proposition C to fight homelessness may tax SF-based payment processors on gross receipts, hurting companies like Square and Stripe
Jack Dorsey, the head of Square and Twitter, unleashed a tweetstorm critical of a San Francisco ballot measure aimed at slashing homelessness …
Context & Ripple Effects
Jack Dorsey is fighting a San Francisco ballot measure with his own megaphone: Proposition C would levy a gross-receipts tax on large SF-based companies — payment processors like his Square and Stripe are explicitly in scope — to fund homelessness programs, and his tweetstorm puts him publicly at odds with backers like Salesforce. The measure follows a template the city tested three years earlier, when Proposition F targeted Airbnb's short-term rental revenue directly.
The stakes are concrete: weeks after this story, voters passed Proposition C, imposing roughly a 0.5% surcharge on annual gross receipts above $50M for firms like Square, Lyft, and Salesforce. The longer arc matters too — as tech companies reevaluate their SF footprints, PayPal later closed its San Francisco office entirely, making the tax-versus-presence question durable rather than a one-ballot fight.
First-order effects
- If passed, Square and Stripe owe a new ~0.5% tax on gross receipts above $50M generated in San Francisco — a direct hit to margins for businesses whose revenue scales with payment volume, not profit.
- Dorsey's public opposition forces other taxed CEOs to pick a side: stay quiet and absorb the cost, or follow him into an open fight with homelessness advocates and Salesforce-aligned backers.
Second-order effects
- A gross-receipts structure penalizes high-volume, low-margin payment processing specifically, giving Square and Stripe a quantifiable reason to shift billing entities, headcount, or HQ functions out of the city — the same footprint math that preceded PayPal's later SF office closure.
- Other high-cost cities watch whether voters will tax tech revenue for social programs, lowering the political barrier for copycat measures aimed at whichever large employers are locally concentrated.
Third-order effects
- From Prop F's Airbnb targeting to Prop C's processor tax to the mayor's later 15% cap on food-delivery commissions, San Francisco is building a pattern of funding policy goals by directly taxing named tech business models — pushing large firms toward smaller physical footprints while startups remain the city's growth engine.
- If the pattern holds, the binding constraint on such taxes becomes corporate mobility: companies that can book revenue elsewhere will, leaving the tax base concentrated on firms with the least flexible structures.
The trend: San Francisco is institutionalizing taxes on large tech companies' local revenue to fund social programs, and the affected firms are responding by shrinking their physical presence in the city.