A fresh economic analysis has cranked up the heat on San Francisco’s battle over Proposition D, the so‑called “CEO tax,” with opponents arguing the numbers show everyday shoppers could end up paying more at the register. The measure is heading into the final stretch before the June 2 ballot as unions and business groups trade sharply different predictions about who really shoulders the cost and who stands to gain.
Under the measure’s text, Prop D would revise the city’s Top Executive Pay Tax so it kicks in when a company’s highest‑paid executive earns more than 100 times the median compensation of its workers and would focus on firms with large revenue and payroll footprints. As outlined by the San Francisco Department of Elections, the proposal would raise Top Executive Pay Tax rates across several brackets, and the Controller’s office estimates an annual revenue bump in the $250–$300 million range.
New modeling escalates the fight
Opponents point to a modeling analysis they commissioned that, they say, shows the tax is unlikely to stay neatly confined to big tech and Wall Street firms. As reported by ABC7 San Francisco, the Pragmatic Policy Group’s central estimates project that consumer prices citywide could rise about 0.1% to 0.2%, that 24% to 40% of higher business costs could be passed through to shoppers, and that low‑margin grocery and retail sectors could see profit squeezes of up to roughly a quarter. GrowSF, which opposes Prop D, has used the findings in its voter guide to argue the measure would function more like a surcharge on transactions than a direct hit to corporate executives.
Supporters point to services at risk
Backers counter that the measure is designed to go after corporate profits, not regular residents, and they spotlight what they describe as a serious gap in city funding for hospitals and safety‑net programs. Support coalitions and labor organizers say Prop D would raise hundreds of millions for general‑fund services; the San Francisco Chronicle reports supporters forecast large revenue gains for the city, and local pro‑D groups such as Indivisible SF and labor sponsors have framed the measure as a way to help protect hospitals and mental‑health services from future cuts.
Economists say pass-through is plausible
The potential for businesses to push new costs onto customers is exactly the mechanism that outside economists warn voters to think about. As quoted in ABC7 San Francisco, UC Berkeley economist Alan Auerbach urged voters to “think of it like an increased sales tax,” noting that because the Top Executive Pay Tax is levied on gross receipts, it can show up in prices as firms adjust to higher expenses.
What voters should watch before June 2
There are several moving pieces on this ballot fight. The official pamphlet explains that Prop D targets firms that meet both the revenue and pay‑ratio thresholds and that if a competing business‑tax measure, Prop C, also passes, only the measure with the higher number of votes would take effect. For the full legal text and the Controller’s fiscal comment, voters are directed to the San Francisco Department of Elections. With advocacy ads and mailers already flying around town, the new modeling has turned into a central talking point for both campaigns in the final weeks before San Franciscans cast their ballots on June 2.
For voters, the choice will feel familiar this election season: whether to raise local revenue to shore up services or to avoid the risk that new business taxes will ripple into prices or business decisions. Both sides are pointing to economic estimates to make their case, and on June 2 residents will decide which set of projections they trust more.
