A proposal to raise taxes on San Francisco’s largest businesses has won the support of U.S. Sen. Bernie Sanders, drawing national attention to a local ballot challenge that reflects a broader push to more aggressively tax wealthy individuals and large corporations. The June ballot measure, known as Proposition D, or the “Overpaid CEO Act,” would increase taxes on some companies with large pay gaps between top executives and workers.
Sanders’ confirmation also comes as efforts to tax the wealthy continue in parallel at the state and federal level, including the California billionaire tax initiative and past federal wealth tax proposals supported by progressive lawmakers.
Sanders announced his support for the San Francisco measure in a statement Thursday, tying the proposal to his long-running campaign against income inequality.
“Never before in American history have we seen the level of wealth and income inequality we see today,” Sanders said Thursday, announcing his support for the measure.
He argued that companies receiving huge executive compensation should contribute more in taxes to support public needs.
“San Francisco’s Overpaid CEO Act will ensure these companies pay their fair share,” Sanders said.
What will the Overpaid CEO Act do?
If approved by voters, Proposition D would increase city taxes on companies with more than 1,000 employees and whose CEOs earn salaries more than 100 times their company’s average worker wage.
Supporters say the structure is designed to target firms with the largest wage disparities, rather than smaller employers or businesses with narrower wage gaps.
The proposal would apply to some of San Francisco’s largest employers, many of whom operate in the technology, financial and professional services sectors.
Organizers behind the initiative say the measure could generate more than $200 million a year in revenue.
They say these funds could help support health care and stabilize city finances at a time when San Francisco faces increasing fiscal pressure.
Supporters also frame the proposal as a matter of fairness, arguing that companies that benefit from the local economy should help fund essential public programs.
Budget deficits increase urgency of debate
San Francisco currently faces a budget deficit that could reach $1 billion in coming years, according to city leaders.
The situation has become more dire as federal funding cuts affect Medicaid and food stamps and as pressure increases on local governments to fill gaps, officials said.
This environment made new revenue proposals a central issue in city politics.
The initiative is backed by labor unions and progressive organizations that say new revenues are needed to protect the services families rely on.
“Senator Sanders understands what is at stake,” said Scott Mann, spokesman for Proposition D. “Washington gave billion-dollar corporations a massive tax break while destroying the services that San Francisco families depend on.”
Supporters also emphasized that the measure was a local response to national economic policy.
Pelosi, local leaders approve Proposition D
The measure has received support from many political figures in San Francisco, including Speaker Emerita Nancy Pelosi and a majority of the Board of Supervisors.
These endorsements show that the proposal has significant support among Democratic leaders in a city where progressive fiscal policies often gain traction.
Yet the business community is vehemently opposed to this.
Business groups warn of economic crisis
A coalition of business interests, including the San Francisco Chamber of Commerce, organized against Proposition D.
Opponents argue the measure could undermine San Francisco’s economic recovery and encourage companies to reduce their assets or move their businesses elsewhere.
Chamber spokesman David Harrison warned Thursday that the overpaid CEO action “could bring our city’s largest employers to their knees.”
Business groups also argue the tax won’t solve the city’s long-term financial problems.
“Proposition D does not solve the long-term structural imbalance in San Francisco’s budget,” he said.
Critics argue that city officials should focus more on spending reform, efficiency and policies that will attract employers back to downtown San Francisco.
Competing Proposition C is also on the ballot.
The fight over taxes on executive pay has become even more complicated because voters will also decide on Proposition C, a rival measure backed by business interests.
This proposal would make more limited changes to the same tax structure that proponents of Proposition D want to expand.
The competing measures offer voters two starkly different approaches to generating revenue from big corporations.
Only one measure can be effective.
If voters approve both proposals on June 2, only the proposal with the most votes will become law.
This creates a direct competition between the progressive tax increase and the more modest alternative preferred by business groups.
As a result, participation and voting strategy can be as important as public opinion on taxation.
Mayor Daniel Lurie opposes both measures
Mayor Daniel Lurie opposed both Proposition D and Proposition C, placing him among progressive advocates and business-backed groups.
His position reflects the political difficulty of balancing budget needs with concerns about competitiveness and business confidence.
The mayor’s opposition could become a major factor as voters weigh the measures.
Part of a broader billionaire and wealth tax movement
The San Francisco proposal comes amid broader efforts to raise taxes on the ultra-rich.
In California, advocates have pushed a statewide billionaire tax initiative aimed at taxing extreme concentrations of wealth.
Sanders and other progressive lawmakers have also advanced wealth tax concepts at the federal level, including proposals for an annual tax on wealth above certain thresholds as well as calls for higher taxes on top incomes and estates.
While these efforts face political and legal hurdles, Proposition D shows how local governments increasingly become testing grounds for policies to tax the wealthy when federal action stalls.
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John Dealbreuin came to the United States from a third world country without knowing anyone and with only $1,000; Guided by an immigrant dream. He reached his retirement number in 12 years.
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