Silicon Valley Central Chamber of Commerce Opposes Santa Clara Employer Head Tax

Santa Clara News

by Robert Haugh

June 21, 2022 - The Silicon Vally Central Chamber of Commerce (formerly the Santa Clara Chamber) has come out against an employer head tax in the Mission City. 

“We are opposed to an employee head tax because we think it will have a detrimental effect on economic development and hurt the City of Santa Clara’s reputation for being a business-friendly city,” the Chamber’s President/CEO Christian D. Malesic wrote to the Mayor and City Council in a June 18 letter.

“A head tax is also difficult to administer and monitor, especially when many companies are allowing their employees to work remotely.”

Malesic also said that the Chamber “opposes any dramatic increase in the Business License Tax, such as the nearly 700% increase that is being proposed. Similarly, we oppose any harmful tax on small and medium-sized businesses.”

The Chamber offered to work with the City Council on a measure that they could support this November.

According to Malesic’s letter, that measure should include an increase in the business license tax that’s much smaller than the 700 percent increase proposed by City staff.  

The Chamber believes the City should also use its rainy-day funds for a short-term period until the economy recovers.

Chamber board chair Christian Pellechia is expected to run for City Council this year against Councilwoman Karen Hardy.

The head tax could be a major theme in Pellecchia’s campaign according to numerous sources.

This is the second major business group to oppose the head tax this month.

“We understand your desire to seek more revenue from local businesses, particularly through some type of employee head tax,” wrote Jim Wunderman, the Bay Area Council’s President & CEO in a June 6 letter to the Mayor and City Council.

“However, we have major concerns and would like to caution you about the impact of such an approach and potential consequences.”

The head tax proposal has been championed by Councilman Raj Chahal. He said he’s wanted to create one since he took office in 2019.

Last year, Chahal singled out three companies that he wants to pay millions more with an employee head tax. Those companies are Nvidia, Intel and AMD.

He said they have a combined market cap of nearly a trillion dollars.

“They can easily afford a few million dollars here and there,” said Chahal. “It’s nothing. It’s peanuts.”

At the Council’s February 8th Priority Setting Meeting, Chahal expanded his list to include other major companies that should also pay a lot more:
Chahal also shared a spreadsheet listing their market caps.

This is a major developing story that should be a huge political issue between now and November.