Via Good, we get this insane graphic comparing start up costs in NYC versus San Francisco:

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Full graphic after the jump


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Category: Technology, Valuation, Venture Capital

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

31 Responses to “StartUps: NYC vs SF”

  1. machinehead says:

    Comparing two plundering tax hells is rather like debating the merits of being incarcerated in San Quentin or Sing Sing.

    As Simon & Garfunkel used to sing, ‘Any way you look at it, you lose.’

  2. DMR says:

    machinehead,

    In an industry that has been pleading for relaxing visa restrictions because their number 1 issue is attracting enough talent, I’m sure that the tax rate is what they will use tax rates to decide on location. That would be as bizarre as a country that wants to contract fiscal policy when facing a jobs crisis when monetary policy is simultaneously pushing on a string. Oh wait. Sorry. I think I just figured out why the Chinese and Indians I know have been acting so cocky lately. We have been reduced to a nation of illiterate peasants.

  3. snapwizard says:

    The valley is much more than just the city of SF. The office space, salaries, taxes, etc. are much more reasonable a few miles south without any significant loss of talent.

    @machinehead

    Big winners from prior startup investments are based in these plundering tax hells!! Other factors clearly trump additional taxes.

  4. zcwotun says:

    “Comparing two plundering tax hells is rather like debating the merits of being incarcerated in San Quentin or Sing Sing.”

    lol, I hate paying taxes but I’d rather be paying lots of taxes than live in some podunk flyover-land wasteland that doesn’t even have direct international air service.

    given the internet, every single investment bank or Fortune 500 company can put up roots and move to Low Taxes Nowhere, USA—there are obvious reasons they don’t.

  5. NoKidding says:

    Waterfront… Weather

  6. machinehead says:

    Clearly, other factors — primarily the ‘clustering effect’ of talent, universities and venture capital — dominate taxes.

    My comment was made from the employee point of view. Confiscatory taxes and high living costs largely negate the benefit of high salaries. Whereas for top managers with stock option compensation, paying off the plunderers makes eminent sense, in order to locate where they need to be.

  7. Orange14 says:

    We were out in Palo Alto last weekend for a family event. The weather was great and I thought this would be a great place to live. However, every house is priced pretty much at $1M plus and in talking with some friends out there, they have no shortage of buyers. Of course things are different down in LA and San Diego where there are lots of houses underwater. In Silicon Valley, not so much. I’m originally from CA and the weather trumps a lot of the other stuff, including high taxes! :-)

  8. Patrick Neid says:

    Having lived in both I find no real debate. San Francisco without even thinking. One of the best parts–the market closes at 1pm. Yes you should be at your desk at 5am but it is worth it.

  9. philipat says:

    @zcwotun

    You’re quite right. Instead they will move to Geneva, London, Shanghai or Hong Kong where the lifestyles are better and the taxes much lower (Total Personal and Corporate rate of 16% for instance in Hong Kong, which also has the benefit of being strategically located proximate to 75%of the earth’s popultaion and 100% of its growth).

    More US myopia!!!

  10. franklin411 says:

    Agree with Patrick and Orange…California is a paradise compared to 99.99% of the rest of the world. I always kind of rub it in to folks who live in the crappier parts of the country–the warmest/heaviest garment I have is a hoodie, and air conditioning? Don’t have it, don’t need it, because it never gets over 80 degrees here.

    Now, I don’t live in SF…I live in Santa Barbara, but…I’d happily give up every penny I make beyond rent/food/basic utilities just to get to live here for the rest of my life.

    Sure, you can make bank in a hell hole like Shanghai, but…you aren’t really LIVING!

  11. philipat says:

    @franklin411

    Which proves my comment about US myopia. Have you ever been to Shanghai or just seen a few 1930′s Hollywood movie stereotyping Shanghai. Today, Shanghai is a fantastic place to live, vibrant and cosmopolitan with an infrastructure that is not crumbling (A world class new airport with an expressway into town, 3 ring roads to keep traffic flowing etc. etc.) world class educational facilities, world class housing in safe and secure communities and a wide range of leisure, sports and cultural activities.

    I also mentioned London, Geneva, Hong Kong incidentally, to name but a few of the other cities generally quoted in the annual surveys of the world’s most liveable cities, from which major US cities are generally significany by their absence.

  12. philipat says:

    PS. I don’t live in Shanghai but Bali, Indonesia, where “I’d happily give up every penny I make beyond rent/food/basic utilities just to get to live here for the rest of my life.

  13. constantnormal says:

    I find it quite amazing that fools who insist that employment is strongly tied to lower taxes can ignore the fact that these two notorious high tax areas are generating jobs at a FAR more rapid clip than little towns in Podunk, Nebraska (not to malign Nebraska). While there are employers who leave these large urban areas and move to lower tax areas, it is a far smaller number than the number of new jobs being created.

    If the tax-haters were correct, then we would be seeing a decrease in the number of large, high-maintenance cities, and a homogenization of the size of cities across the nation. We are NOT seeing this.

    In point of fact, people have been moving away from no-tax areas (which tend to be rather empty) and into the big cities. It has always been that way. The fact is that big cities have higher taxes because it costs more to run them. It costs more to run them because they offer more — a LOT more than rural or undeveloped areas, which have their own particular charms, but opportunity is not among them. And OPPORTUNITY is what drives business, and if they have to pay higher taxes to be where there is opportunity, so be it.

    But data will not stand in the way of ideologues. They have their Truth, and they’re sticking to it. Don’t bother them with facts that show their Truths to be lies.

  14. MacroEconomist says:

    @phillipat

    Don’t forget the crashing bullet trains of China and cover-ups
    And the riots of London
    And the xenophobia of Europe

    There are a few Americans who have been around the block as well. I love all the places you mention and make sure to spend a week per year in each. America is not perfect, but it’s the best of the lot.

    PS. I don’t live in Bali but Miami where “I’d happily give up every penny I make beyond rent/food/basic utilities just to get to live here for the rest of my life.

  15. Evan says:

    i have lived in very low tax countries in latin america. we had an emergency generator because the electric company was unreliable, we had a guard service because the local police department was inadequate, we sent our children to expensive and exclusive private schools because public schools were so poor, we bought bottled water because the tap water was not safe to drink. and just before we left our last post we hit a pot hole. when we returned to the u.s. we spent $1,000 to fix the suspension. but the taxes were low in these countries.

    there is a cost for civilization. and it seems that many in the u.s. today do not want to pay for public services. but keep your government hands off my medicare.

  16. Christopher says:

    NYC is the Capital of the World.

    SF is an apocalypse waiting to happen.

  17. Christopher says:

    capitol….capital….?

    beer….rum….
    Cheers.

  18. Thor says:

    for instance in Hong Kong,

    Are you joking? Do you just assume that no one here has ever been to Hong Kong or not know how insanely expensive it is to live there? Who gives a shit if you’re taxes or Zero percent when you’re paying 3K a month to live in a box of an apartment.

    Next?

  19. Thor says:

    And when’s the last time you were in London? People are paying upwards of 4,000 pounds just to commute in on the tube.

  20. Thor says:

    SF is an apocalypse waiting to happen.

    Yes I agree, I was born and raised there and go home quite often. The City is not what it used to be. All the young people, and most importantly the families have left. It will be a beautiful jewel of a playground for those wealthy enough to afford to live there, the rest will do what they’ve done what they always do, commute in from farther and farther out.

  21. kevin r says:

    constantnormal makes a good point. Taxes collected by a specific region tend to pay for things that make life and employment better. I happily pay SF area taxes for schools and art work and police and minimal health care for those that do not have it. These things make my life better even if I am not always using them directly.

    As for why technology startups love the SF/Bay Area, it has more to do with funding and payoff (IPO/Buyouts) than taxes. As a business, who cares about 100K in taxes and utilities if 1) it is other people’s money and 2) your goal is a billion $ selloff to Google in 4 years.

    As for the Twitter example above, when they mentioned they might leave the city, they were given a tax break and asked to move into a more “edgy” neighborhood in return. Compromise is another factor businesses like in a region.

  22. Thor says:

    Philipat – I’m sorry, I don’t mean to pick on you. I just bristle at the number of self hating derogatory stereotypes of American. For instance.

    Which proves my comment about US myopia. Have you ever been to Shanghai or just seen a few 1930′s Hollywood movie stereotyping Shanghai.

    Now I travel internationally quite a lot, and I have no idea what you are talking about with that statement. I see more Americans abroad than any other international group. There are Americans in every tour group, in every country, wherever we go, from all over too, not just the big cities. Americans are a very very well traveled people. More importantly, we are always among the favorite groups of all the tour guides we meet abroad. Americans always tip, we’re usually always on time, we’re not rude, we’re friendly. This is not my opinion, ask the next tour guide you meet if you don’t believe me.

    Yes, the “average” American does not travel, nor can he locate Iraq on a map. So what, the average Londonder these days appears to favor looting their own impoverished neighborhoods than much else. If you travel much, or have enough friends who have lived abroad, you realize rather quickly that the “average” person around the world is really not all that plugged in.

    I live in America, in SoCal. I was born and spent most of my life in the SF Bay area, not far from those 1M homes in Palo Alto someone above was talking about. I’m glad I live in this country, I know we are about to enter some pretty scary times, but that’s going to be global, and when it does, when the shit really hits the fan, I’ll be glad I live here. I’ll be glad we live here because, although our infrastructure is creaky, we have one, and more importantly, if you’ve done you’re homework, you’ll know that we have a rail system second to none. Freight, not passenger. Also, and I suppose more importantly, we can feed ourselves. If we end up going back to the basics, that’s going to count for a lot. We are also a very sparcely populated country with (even today) more untapped natural resources than almost anywhere on the planet. We’ve simply chosen to offshore the dirty work of extracting those resources to, you got it, Asia. But in a pinch, we could use it.

    Asia? No, I would not want to be in that seething cesspool of human disease and misery. Yes, the cities are very nice, and if you’re lucky enough to be one of those annoying American expats who lives in a third world tourist mecca on his Western pension, I suppose it must be pretty nice. But outside of that, much of Asia, especially Southeast Asia, is still the festering cauldron of misery it’s always been. You just need to get out of that western oriented resort myopia. Also, If the shit hits the fan hard, I wouldn’t want to be a rich white guy in your part of the world.

    My two cents ;-)

  23. Thor says:

    Last one for the night and I’ll shut up I promise :-)

    I’m sure those who travel extensively would agree, New York and London are center stage in the world today. New York is the capital of the world. I’m surprised that’s even in doubt, on a blog that spends so much time talking about the local and international chaos being created by Wall Street. London is something else entirely, I won’t even try to describe it as I’m sure one of the Brits who frequents this blog will do it justice.

  24. johnhaskell says:

    Back in April SF gave Twitter an “out” on the payroll tax mentioned above, so it’s very good journalism that Good kept it in there anyway.

  25. philipat says:

    Hmm, Thor, rant over? Might I remind that the original topic, from which we do seem to have drifted somewhat, was comparative tax rates. The initial proposition was between SF and NY and whether folks would be tempted from one to the other, or vice versa, because of tax rate differentials. My humble intention was to inject into the debate a further dimension that businesses and folks relocate for a whole host of reasons, not limited to tax rates and not limited to the mainland US. Should you wish to “Shoot the messenger”, then fine.

    PS. Riots in London coming to a City near you very shortly. With guns, the outcome involves more deaths. As the US heads towards Socialism and an a society of entitlements, expect it sooner rather than later. The folks in the UK have free education, healthcare, unlimited unemployment benefits, subsidised housing etc. But, unfortunately, that doesn’t include free ipads, iphones, flat screen tv’s etc. Perhaps the Dems can improve on that?
    Bali, meanwhile, is quite safe. Indonesia has economic growth of 7% pa, an appreciating currency and a low cost of living, although property prices are being driven up by neighbouring economies, SIngapore, Hong Kong and Australia, where equally impressive economic growth has also driven property prices, which impact here in response.

  26. philipat says:

    PPS. Enjoy regular visits to NY and SF during RTW trips. on mostly Asian airlines, who have the best service. It’s never good to abuse other sides of an arguement,just argue for the merits of your own position?

  27. buskila says:

    @philipat

    all this great infrastructure in shanghai and still tap water is undrinkable? i never understood how many ring roads there are, but traffic is horrible regardless

  28. hankest says:

    Unless i’m reading something wrong…the graphics look screwy, example why are the lighter side of the scales down?

    How many businesses in NYC or SF, especially startups, are actually paying the tax rates quoted?

    How much of the local taxes can be written off from federal taxes?

  29. sporkhero says:

    I’m thinking this would be more fun with Austin and, say, Seattle or Portland thrown in.

    @philipat, where are you in Bali? We’ve been thinking about a spell over there, torn between Ubud & Sanur.

  30. philipat says:

    We are in Sanur. Quiet beach community. Ubud is also nice but higher elevation so it rains a lot and is much cooler. I’ve always been a beach type and we love it here. I’d love to provide more but there is no PM facility on this blog.

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