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Sunday, May 15, 2011

In Back Rooms, Pixar Warns City; Residents However Must Operate In The Open

Back Room Finagling Happening Right Now At City Hall
City Will Face Resident's Wrath If Business Tax Cap Remains

Faced with the biggest budget shortfall in modern Emeryville history, the city council recently turned to investigating increasing taxes after having massively cut government services.  Once their gaze was directed to the revenue side of the ledger, it didn't take long to see the glaring 800 pound gorilla residing in the business tax code: the business tax cap.  Not only does Emeryville have the lowest regular business tax rate (.08% of gross receipts) in the region, it's also the only city in the entire Bay Area with a business tax cap.

The tax cap is a huge tax break for the biggest businesses that the smaller businesses don't get; it renders all gross receipts over $146 million tax free, meaning these large corporations never pay any more than $114,000 per year, leaving billions of dollars untouchable.  The net effect of all this give-a-way to the billion dollar corporations is that the smaller businesses, the businesses that the residents find useful and neighborhood serving, pay a much higher rate than their well connected billion dollar corporate counterparts do.

Paul Ryan has a plan for America
and Pixar has a plan for Emeryville.
Both involve the rich not paying their share.
Emeryville has the unfortunate distinction of having the most regressive taxation in the entire Bay Area.  It's enough to make Wisconsin Congressman Paul Ryan and the Republican Party blush.

After the council floated the idea on May 3rd that perhaps the tax cap could be lifted by a November ballot initiative vote of the people of Emeryville, Pixar/Disney went apoplectic and they brought in their hot shot corporate lawyers and laid down a barrage of intimidation on our little city council.   Pixar it would seem, likes the tax cap.  The council withered and agreed to have city staff meet with the lawyers in private meetings to reach some kind of accord.  These back room meetings are finishing up and on Tuesday, the council will reveal how much the Emeryville residents will be allowed to vote on in November.

Given the state of our budget crisis with all its cutting of services and shelving of public amenity plans, the tax cap sticks out like a sore thumb; a government give-a-way plum to the richest among us.  The cap goes beyond way the rhetoric of trying to attract and retain business to help Emeryville's bottom line, the low .08% tax rate does that more than enough.
Will the city council feel
Pixar's pain?
The cap is much more than that; it smells of a regime of pro-big business ideology from an era when our backs weren't against the wall as they are now.  Emeryville's business tax cap is just unfair by any metric and its time has passed.

Woe be to any politician that bends to the will of Pixar and stands in the way of the people's will.  Tuesday will tell.


  1. I am so sick of Pixar's stinginess here in Emeryville. The most f-ed up thing is that people think Pixar is generous because the throw in a few dollars for the schools. Novartis is way more generous than Pixar but you never hear about that. It's all because of Pixar's movie star connection. Wake up people! Pixar should pay their fair share. What difference does this Hollywood connection make to us here in Emeryville? You think Pixar cares a rat's ass about us?

  2. From the article---
    "it renders all gross receipts over $146 million tax free, meaning these large corporations never pay any more than $114,000 per year"

    H'mmmm Help me with the math. If Corps are taxed at .08% how is the max paid only $114,000? Last I checked .01% of $146 million would be $1,460,000.

    So how much does Pixar pay? Don't get me wrong, I vote for at least a rate of .10%

    If this is a % per $100 or $1000 please give me the 'formula'...Thanks

  3. To Anon-
    Look out for the extra two zeros you need to add when calculating percentages. As of right now the tax is 8 cents out of every $1000 gross receipts. The voters may increase that to 10 cents.

    Also, it was recently disclosed to me that since the maximum amount any corporation will pay is pegged to the Consumer Price Index (CPI), and the adjustment was recently made, the rate now has risen from $114,000 to about $117,000.