zlacker

> He now does business under the same name, but in Utah. It is interesting to think of how much tax revenue the city actually lost by fining a small business out of existence, which was likely much greater than the total punitive fines levied against him.

I'm not so sure about that, due to the nature of his business (plumbing).

There will be two broad categories of taxes that will be lost when a business moves away from San Francisco.

1. Taxes that are paid by the business itself, and

2. Taxes paid by individual employees of that business, such as income taxes and sales taxes, if those employees move with the business.

I'm not too familiar with San Francisco business taxes, but a brief bit of searching suggests that the bulk of it is a gross receipts tax and business personal property tax.

A plumbing business leaving San Francisco doesn't change the amount of plumbing that needs to be done in San Francisco, so presumably money that would have went to his gross receipts had he stayed just ends up in the gross receipts of some other plumber. I don't know if the gross receipts tax is flat or progressive, but if it is then the city might actually collect more on gross receipts with him gone.

The city will lose out on business personal property tax because presumably much of that goes with the business when it moves to Utah. Whatever plumbers in San Francisco get the work that would have went to him might need to increase their business personal property some, but it probably won't be enough to offset what is lost. A smaller number of bigger plumbers are going to be more efficient in this regards than a larger number of smaller plumbers, so any consolidation should lower the total amount of business personal property.

For the individual taxes, there are two groups to consider. First, employees who leave rather than move with the business. These probably have little impact. They still pay sales and income taxes--they just get the money for that from their new employers.

Second, there are the employees who move with the business. Their income tax and sale tax is lost.

If the city was hitting them with $1k/month in fines, that's $12k/year. Googling tells me the city income tax is a flat 1.5%, and the sales tax is 0.25%.

Let's assume that these employees spend half their taxable income on things subject to sales tax. Then they need to be making about $740k aggregate taxable income for their income plus sale taxes to be more than the parking fines. By "taxable income" I mean whatever it is that San Francisco charges 1.5% on.