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Wednesday, March 10, 2010

NOW They Want To Make The Business Taxes More Progressive


How much money have we lost in Emeryville because of unwarranted and rigid ideology on the city council?

As the realization of our terrible fiscal bind grows, once sacred pro-business tax code ideology is starting to crumble. Even corporate maven and City Councilwoman Nora Davis uttered the unthinkable at a budget study session last week, "we need to look at raising revenue in all areas, including possibly lifting the cap on the business license tax," she said. A surprising statement since the existing tax structure, enacted by Ms. Davis and her colleagues, has limited our city's ability to pay for needed services for years. Indeed, our city has the lowest tax on business, by far, in the entire Bay Area. They are also heavily regressive, falling disproportionately on small businesses, while giving the city's biggest firms a huge break.

Business taxes in Emeryville let the largest corporations off the hook by "capping" the tax. Once the maximum amount of $115,774.03 is reached, all profits above the amount are fully exempt, even for a firm with multi-million dollar profits. As a proportion of overall income, large businesses pay much less per dollar than smaller business. Effectively, small business has been subsidizing large business in Emeryville for years. Small businesses have complained about the unfair nature of the business tax, but they have been rebuffed by the Chamber of Commerce and the Chamber's friends on the council.

Emeryville resident and college professor Brian Carver has been alerting fellow residents of the absurdity of our tax code. In a letter to the city council, he demonstrates how unprecedented the cap is; no other city in the entire Bay Area has it. He has showed if the cap is lifted, even a little, millions in revenue would be gathered for our cash strapped city. According to his analysis, the burden would be very affordable for Emeryville's largest businesses.

The unfair tax structure in Emeryville is no accident. It a product of the city council's rigid ideology. Some argue that lower business tax can serve a city well but obviously this is not the case. To forgo so much revenue is reckless. We need to finally get our financial house in order and stop being a pariah on the Bay Area stage. One would be right to shake one's head and wonder how many millions of dollars we have given up due to this dogmatic policy and how that money could be used right now.


  1. Brian, if you have won this battle why are you still so bitter? The vastness of your negativity seems to continually amaze me. You give people no reason to agree with you. Agreeing with you is obviously not a means of winning your favor. Anyone who is unlucky enough to be on you bad list has no incentive to listen to you since it won't make any difference.

    While I generally agree with you on this topic, it is important to remember a few things:
    1. The business tax collected per capita in Emeryville is extremely high. Probably one of the highest rates in the region.
    2. Businesses subsidize all of us. In California, due to Prop 13, the property taxes all of us pay do not pay for the services we actually use. The gap is made up by revenue sources like sales tax and business license taxes. Bill Fulton's article 'Sales Tax Canyon' does a great job of explaining this.

  2. I'm "bitter" as you put it because I'm dismayed that public policy would be held hijacked to wrong-headed public policy based on maximizing the profits of business rather than the residents. I'd like to see pro-resident ideologues at the helm for a change. I feel the council needs to be taken to task for their mistakes because there's nothing like the specter of public embarrassment that engenders better future behavior from public officials. As a citizen, I don't feel that it's my job to praise the government officials when they do a good job....that's why they're there. If they are making mistakes, well I'm going to tell my neighbors about it.

    The per capita tax paid by business is so high because we're an industry intensive town. I just want to make sure no businesses curry extra favor with the politicians and are able to get a better deal as is the case right now. Taxpayers need to feel as if they are not being manipulated lest cynicism set it.

  3. Good luck with that, Emeryville makes the Soviet Union look fair, balanced and transparent.

    It's pathetic how much the public services in this town languish, and have to beg and scrape just to make it through each year to provide the basic level of service we are required to.

    With Firms like Ikea, Novartis, Pixar, and Peet's, we should have enough revenue to actually get the ECCL off the ground, but that is a total cluster f*ck of graft, waste, and mis-management, it deserves it's own website.

  4. Better to be "bitter" than "better"!