Last summer, San Francisco's city controller issued a report declaring that the city's most viable path to a post-pandemic recovery—and its best way to avoid sliding into an economic doom loop—involved meaningful business tax reform that diversifies the tax base while paring stratospheric business taxes.

Last week, Mayor London Breed and Aaron Peskin, president of the Board of Supervisors, endorsed a business tax overhaul crafted by the city controller and the city treasurer that they intend to put forward as a ballot initiative in the November election.

The proposal calls for exempting 2,500 small businesses from the business tax by raising the threshold for the Small Business Exemption from businesses with $2M or less in total annual revenue to $5M. The plan also will lower taxes for hotels, arts, entertainment and recreation.