July 5, 2009

Big Business Needs to Pay Their Share

by Scott Donahue

Our city must raise more money to support the general fund because sales tax revenue
has severely declined. Where is this money going to come from? Every city has a business license tax and every business in Emeryville earning more than $5,000 in gross receipts must pay this tax. Businesses pay a percentage of their gross receipts whether they earn a profit or not.

There is, however, an exception: big business.

Big business in Emeryville is required to pay tax only on the first $3 million of gross receipts. The rest is entirely tax-free. Why is this? Why should small business pay proportionally so much more than big business? Emeryville has among the lowest business tax rates of any city in the Bay Area. The city council majority has always argued that it must provide incentives to big business so as not to lose them to other cities. This is absurd. Emeryville is among the most desirable places to do business in the Bay Area. We have the ability to collect taxes in a more equitable way. If big business were to pay what small business pays our general fund would gain much needed revenue.

I believe we could easily raise our overall business tax rate and not lose business to other
cities. I pay taxes to other cities where I do business, and all of them have significantly higher tax rates than Emeryville.

Scott Donahue is a 32- year resident and business owner in Emeryville. He chairs the city’s Bicycle and Pedestrian Committee, whose members are appointed annually by the City Council.

13 Responses to Opinion

  1. Anonymous on July 6, 2009 at 6:41 am

    How come none of this surprises me?

  2. Anonymous on July 6, 2009 at 7:44 am

    Hear, hear!

  3. Anonymous on July 7, 2009 at 5:23 am

    This is another example of welfare for the rich. Emeryville's small business subsidizing the big business…why? Because they're small! Should make sense; small political connections, small political contributions, small political favors, everything small. There seems to be a obvious logic to it all.

  4. Anonymous on July 7, 2009 at 6:11 pm


  5. Anonymous on July 8, 2009 at 6:32 am

    The July 6 10:23 writer discounts a more obvious reason why small business subsidizes big business in Emeryville: the city council are simply pro big business. They always have been. I don't think it is any more complex than that.

    A more interesting question is why is the Chamber of Commerce in the tank for big business at the expense of small business in town. They're supposed to be pro business…all business. They should be in favor of a fairer business tax policy…maybe they're the same as the council.

  6. Anonymous on July 8, 2009 at 6:36 pm

    I don't think too many business owners (small or large) see this system as unfair. It rewards you for being successful.

    Also, it is important to note that some small businesses also get discounted tax rates. For example, a barber/stylist only pays a $280/year flat rate; a contractor only pays $200/year.

  7. Anonymous on July 8, 2009 at 11:57 pm

    Wow, there's a tortuous justification: Success is rewarded with a tax rate reduction. Let's do that everywhere then. How about minimum wage earners should pay 90% of their income in taxes sliding down as the income rises so billionaires pay nothing. How could any reasonble person be against that? Being rewarded for being successful…it will encourage everyone to be successful. This is a 'raise all boats' type deal. Why didn't we think of it before?

  8. Anonymous on July 9, 2009 at 1:31 pm

    To the July 8 "I don't think too many business owners (big or small) see this system as unfair", where do you you get this information? The other July 8 writer makes a point (sarcastically)- it's unfair as defined…sort of a dictionary definition of unfair.

    We find out the mayor doesn't pay his taxes, now this. I'm a small business owner in Emeryville and you never polled me. Who have you polled, the big businesses in town?

  9. Anonymous on July 9, 2009 at 9:11 pm

    This blog is a safe place for small business owners to kvetch about the unfairness of small vs. big business in Emeryville–God knows our local Chamber of Commerce doesn't care–the Chamber gets more $$ in member fees from the bigger corporations, so that's who they listen to.

  10. Anonymous on July 13, 2009 at 9:46 pm

    It seems to me that there are probably only a few businesses that have gross receipts in excess of $3 million and what would be prudent would be to make this tax change more business friendly by making the change revenue neutral. Adjust down the "take" so the City gets no more than it's getting now in actual dollars.

    With the behemoths Pixar and Novartis taking up the slack, the smaller businesses would get a tax break. This would make the tax policy consistant with the City's stated goals of trying to keep and support small business and having a fair tax code. As the law stands now, it's just plain unfair to small business and an afront to fair play.

  11. Anonymous on July 14, 2009 at 12:54 am

    To the July 8 11:36 AM writer (above),

    If the tax law rewards you for being successful as you say, then it also punishes you for being less successful (smaller). I don't think it's right to be punishing small business in Emeryville. We should, if anything, be encouraging them.

  12. Anonymous on July 14, 2009 at 3:34 am

    In the words of the vainglorious Leona Helmsly comes the infrangible, "taxes are for the little people".

  13. Anonymous on July 25, 2009 at 10:49 pm

    You are asking for Council Members to give up their guiding philosophical world views, to throw overboard the lens through which they view all things. Seems unlikely to me unless of course they felt as if their seats were threatened by it… then, well maybe they might concern themselves in matters of fairness.

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