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Get the Facts on Prop D: The Fake “CEO” Tax
The “CEO” Tax isn’t a tax on CEOs.
You may have heard that there’s a “CEO” Tax measure, Prop D, on the ballot for this upcoming June 2026 election. But here’s the dirty little secret - despite its name, it’s not actually a tax on CEOs.
Instead, the tax punishes companies based on pay ratios between their CEO and median employee, even if the CEO or workers are not located in San Francisco. This measure then would increase taxes on businesses by 800%.
Prop D threatens our City’s economic recovery and increases residents’ cost of living.
Prop D’s consequences are serious. If passed, this measure would raise taxes for businesses like grocery stores, pharmacies, and restaurants. Some of the companies Prop D would harm include Grocery Outlet, Target, Walgreens, Macy’s, CVS, Albertsons, Nike, McDonalds, Gap, Starbucks, Chipotle and more.
San Francisco is still recovering from the pandemic. Raising business taxes arbitrarily sends the wrong message and risks pushing companies to downsize or leave, as many have in recent years. Academic literature has observed even a 1 percentage point increase in business tax rates increases the likelihood of a business relocating its headquarters by ~17%. When businesses leave, jobs disappear and residents lose consumer options. At a time when our economy is rebuilding, making it more expensive to operate here doesn’t just stall our recovery - it sets it back.
San Francisco is also already an expensive city. Raising taxes on major businesses will only hurt residents. The reality is impacted companies will pass the additional costs onto us residents. Academic literature has found that 40% of business tax burden ultimately falls on consumers. This means higher prices for goods like groceries, clothes, health items and other necessities. Raising costs on residents is the wrong move for San Francisco right now.
Prop D gives City Hall a blank check.
You may hear supporters claim the tax, projected to raise $250-300 million annually, is necessary to fund local healthcare programs.
But here’s the reality: the measure contains no legal requirement that the money be spent on healthcare.
There is no binding language directing the funds to clinics, patients, or specific health services. It’s even explicitly stated that the tax measure’s revenue would be “available for general governmental purposes.” That means the revenue could be used for virtually anything in the City budget including pay raises for City employees or politicians.
Voters are being told this is a healthcare fix when Prop D is really about giving City Hall a blank check to spend. And we shouldn’t be giving City Hall a blank check when it has a spending problem.
More taxes won’t fix a spending problem.
Prop D is the wrong solution to San Francisco’s budget crisis.
Supporters argue we need it to offset federal funding cuts. But when you look at the actual numbers, the real issue isn’t a revenue collapse - it’s runaway spending. Even when factoring in federal cuts, City revenue is still expected to rise. The problem is that spending will grow even faster.
There’s also no actual guarantee that Prop D’s tax revenue would actually lead to higher business tax revenue for the City. As mentioned, the tax could drive away businesses, which could lead to lower tax revenue over the long-term. An 2023 City Controller report even noted, “It is notable that, despite the adoption of higher Gross Receipts Tax rates in 2020, and a new Overpaid Executive Tax, overall business taxes owed to the City declined slightly between 2019 and 2022.”
The City simply can’t tax its way out of a spending problem. Higher taxes like Prop D won’t fix structural overspending - they’ll just make San Francisco more expensive for residents and businesses.
Mayor Daniel Lurie opposes Prop D.
Mayor Daniel Lurie, who has made San Francisco’s economic recovery a top priority, understands what’s at stake. That’s why he’s publicly opposing Prop D.
Lurie has warned that raising taxes right now could drive businesses away just when the city needs them most to rebuild its economy. As he put it, “We cannot be complacent about our recovery.” We agree.
SF Democrats oppose Prop D.
Our local Democratic Party, the San Francisco Democratic Party, also understands San Francisco's economic future is on the line this coming June 2nd election.
That's why the party voted to protect our City's economic future and officially opposes Prop D.
It's time for San Francisco to move forward and maintain its economic momentum.
What you can do.
Spread the word and vote NO against Prop D this June 2026.
Pledge to vote NO by signing the form below:
