East Palo Alto to vote on tech tax

One of Amazon's locations in East Palo Alto. Post photo.

Daily Post Staff Writer

East Palo Alto City Council has decided to put a tax on businesses on the November ballot, making it the second mid-Peninsula city to ask voters to consider a so-called tech tax.

The tax, if it receives two-thirds of the vote, will be imposed on office space in the city at $2.50 per square foot.

Amazon is the only technology company of any size in East Palo Alto. It has offices in the University Circle office complex, where the Four Seasons Hotel is located west of Highway 101, and another building at University Avenue and Donohoe Street on the east side of 101.

The council on Tuesday (July 31) unanimously decided to put the measure on the ballot.

The tax is expected to bring in about $1.6 million a year.

At least 35%, or $560,000, would be spent on building low-income housing, a maximum of 15%, or $240,000, would pay for the city’s staffing costs for implementing the tax, and the remainder would fund more job training for residents.

The job training programs will likely be focused on tech and building trades.

The measure will also give council the ability to lower the tax or raise it back to $2.50.

If there is an economic downturn, for example, council can reduce the tax or stop collecting it altogether, according to Mayor Ruben Abrica.

Mountain View plans to ask voters to approve a “head tax” on large employers in the city. The tax applied to each employee would cost Google, the city’s largest employer, $3.3 million a year.

Cupertino’s City Council on Tuesday dropped plans to ask voters to tax Apple and other large employers based on their headcount.

The tax would have raised up to $10 million a year and been spent on transportation projects.


  1. Good way for EPA to make sure that no tech companies ever come to their town in the future. Talk about shooting yourself in the foot!

  2. Interesting that the proposed tax in East Palo Alto is about $625 per employee (assuming 250 square feet per employee and the parcel tax at $2.50 per square foot). Mt View measure is capped out at $150 per employee. Shoot in the foot is an understatement – how about shoot in the head.

  3. Tech taxes are not high enough, and won’t be, until these cost externalizing tech companies start to leave here because of them. As defined, tech’s cost externalization occurs: ” when a company transfers some of its moral responsibilities as costs to the community directly or as degradation to the environment. For example, railroads and airlines transfer the cost of fuel, noise, and terminal infrastructure to the community. Airlines and auto manufacturers transfer the cost of degraded air quality to the community and the environment. By externalizing to the community or the environment, many true costs become lost in analysis because the true cost is non-quantifiable and neither the community nor the environment have effective advocates to recoup the damages. A major modern theme in the relationship of business to society is the society’s ability (or inability) to resist this kind of externalization. In its extreme, society collapses as business realizes its profits.”

    Here, tech’s externalized costs include overcrowding our transportation systems of streets and highways that have increased noise levels and are beyond capacity, air quality that is suffering, and starter housing for our children that is now priced beyond affordability. All this, and much more, is a consequence of tech companies externalizing costs onto our communities by their desire to have a Silicon Valley address.

    Talk about killing the goose that laid the Golden Egg….

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