As an enlightened businessman who has long lived in San Francisco, Mr. Benioff argues that businesses are located in a specific geographic area and thus have a responsibility to boost that area and to help the less fortunate in that area. He calls for political support for Proposition C (and read this) that would tax rich local companies to pay for services for the homeless.
A few points.
1. Publicly traded companies located in San Francisco have shareholders who do not live in San Francisco. These individuals are being asked to sacrifice some capital gains to provide for San Francisco's homeless population. Such individuals would have used their capital gains in part for their own charities that they support (and for their own private consumption). Who owns these big companies, the shareholders or the people of San Francisco? Friedman would call this spending "other people's money".
2. The San Francisco Chronicle opposes Prop C with an interesting economic argument as it argues that by "throwing more money at the problem" that this diminishes the incentive to be scientific here and learn what actually is a cost effective solution for helping the homeless. Necessity is the mother of invention in solving challenging urban social problems!
3. In fairness to Mr. Benioff, prior California research has documented that you can tax rich people without them moving away. Texas is not a close substitute for Malibu read Brueckner and Neumark 2014.
But, if San Francisco City adopts Proposition C, an urban economist would posit that economic activity will migrate to just outside the city boundary and this represents a type of "tax haven". Mr. Benioff is implicitly assuming that the productivity and amenity effects of working in San Fran City will outweigh his tax hike. Economists call this the cross-elasticity effect.
So, what would Milton Friedman say here? There is a real homelessness challenge and what can be done?
Let's start in the labor market. Fewer people would be homeless if they had higher incomes. Friedman would repeal minimum wage laws, anti-firing laws and unionization to provide incentives for firms to be willing to take a chance on hiring workers whose quality is difficult to certify ex-ante. Working builds up human capital and non-cognitive skill
Turning to the housing market; Friedman favored housing vouchers but are the homeless able to make "good choices" for themeslves? Which geographic areas would accept these vouchers? Would these receiving areas deteriorate in quality because crime would rise as more homeless move there? Friedman favored the decriminalization of drugs. Would such an approach help the homeless receive treatment and alter their drug regimen? Friedman would have embraced Gary Becker's crime and punishment of patrolling the streets and enforcing laws. These policies would have costs but they would protect the general public against emerging threats to their safety and quality of life issues. Friedman would support the enforcement of property rights here. What are the rights of the homeless and what are the rights of the non-homeless?
Friedman would also argue (as did John Quigley) that low housing supply caused by NIMBY land use regulations raises rents and home prices and artificially inhibits gains to trade between middle class people and real estate developers. If more middle class housing is built then rents fall and some homeless people could afford housing in San Fran. Market solutions to the homeless challenge have been inhibited.
To quote Quigley's 2001 RESTAT paper; "Furthermore, rather modest improvements in the affordability of rental housing or its availability can substantially reduce the incidence of homelessness in the United States." Milton Friedman would agree.