Should Big Business Pay Their Fair Share? City Council Says “Let the People Decide.”

May 18, 2011

The Emeryville City Council last night ignored Pixar’s pleas and instructed the city attorney to begin preparations for a November ballot initiative on whether business taxes should be raised.  In a stunning 5-0 vote that featured two reversals, the council moved forward two issues for voters’ consideration: raising the tax rate on all businesses, and eliminating the infamous business tax cap, a tax scheme that exempts the city’s largest corporations’ from paying tax on any gross receipts beyond the first $146 million. Emeryville is home to several multi-billion dollar corporations, including Pixar and Novartis.

Before the Council vote, Pixar attorney Anna Shimko, a partner in the San Francisco office of Sedgwick LLP, warned of a coming season of “rancor” from the business community as the election draws close.  Such an initiative is “not advisable,” she said, if businesses in Emeryville are to “grow and flourish,” hinting at unwelcome consequences if the initiative goes forward.

“I know you to be a responsible and intelligent council” she concluded.

Shimko offered the Council a way out in the form of a delayed vote until the next Council meeting so that the business community could give the council additional information and properly apprise the citizens of the disastrous results of a business tax hike.  The opportunity was seized upon by Mayor Nora Davis and Councilman Kurt Brinkman.

“I think we could have one more meeting” Ms Davis said. But fellow Council Members disagreed.

“This has been in the works for over a year,” Council Member Jennifer West said.

The Council decided to take up the issue of a tax waiver for the smallest businesses under $100,000 gross receipts at a later council meeting.  West noted that tax lowering can be done by a direct Council vote.

The people of Emeryville will be asked in November if the business tax cap, unprecedented in the Bay Area and in existence for 18 years, should be lifted.  On the ballot also will be a provision for voters to decide if the business tax rate should be raised from .08% to .1%, a rate still lower than neighboring Berkeley and Oakland.  Council Member West supported a tax rate the same as Oakland, at .12%, noting that Emeryville would still have the lowest business tax rate in the area since Oakland imposes four additional taxes on its businesses that Emeryville does not. West made a motion in favor of the higher rate, but the motion failed for lack of a second.

(Story reprinted with permission from The Emeryville Tattler)

For a related story, click here.

One Response to Should Big Business Pay Their Fair Share? City Council Says “Let the People Decide.”

  1. Jim on June 4, 2011 at 5:06 am

    The May 12 New Yorker article about Pixar makes it clear that they are not a cash strapped organization. The “playful” environment that Pixar has built for their employs with a seemingly bottomless budget, really makes their “poor me” attitude ludicrous. I say to Pixar… go ahead, knock yourselves out with frivolity, but pay your fair share like everybody else… you can afford it.

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