Mayor Gavin Newsom and his business community allies often accuse progressive members of the Board of Supervisors of being too “ideological” in their proposals, particularly when they involve revenue or regulations. But a looming battle over reforming the city’s business tax – one of three new revenues set for a special Budget & Finance Committee meeting tomorrow (7/9) at 11:30 am – shows that an ideological aversion to taxes of any kind drive Newsom and the business community more than their stated concern for “jobs” and the “economy.”
Board of Supervisors President David Chiu crafted his measure – which creates a progressive structure for the currently flat payroll taxes and uses small commercial rent tax to spread the tax burden among more businesses (only 10 percent of which now pay the payroll tax) — specifically to decrease the business tax burden on small businesses and protect private sector jobs while also bringing in about $35 million more into the city, which will save some city jobs and thus help the local economy.
City Economist Ted Egan and the Office of Economic Analysis confirmed that Chiu’s carefully crafted measure does just that, noting that it was based on recommendations made last month in a report by his office and two private accounting firms that was jointly commissioned by both Chiu and Newsom.
“The proposed legislation modifies the Progressive Payroll option in the Controller’s report, to achieve greater revenue growth while minimizing private sector job growth,” concludes Egan’s analysis. And that’s the idea of this legislation, to save some city jobs and services without hurting the private sector. Egan found this tax reform would on balance have no impact on private sector jobs.
But the Small Business Commission, driven by anti-government zealots in their community, wants even greater concessions and to minimize government revenues, demands that Chiu is now considering giving in to, with sources close to the negotiations saying they will amend the plan to exempt more small businesses and lower the revenue projection to more like $28 million.
“There are members of the small business community that are averse to any taxes,” Regina Dick-Endrizzi, director of the city’s Office of Small Business (which staffs the commission), told us.
She said the commission isn’t opposing or supporting the measure, and while she said the business community isn’t ideologically opposed to government, she did admit that “they are just not sensitive to keeping city workers employed.”
And that’s a terribly selfish and self-defeating attitude that hurts the local economy and the services we all depend on. The problem is the small business community — which is supported by the Bay Guardian and beloved by all as a key job creator — is being used by conservative ideologues and large corporations and lured into joining their anti-government crusade. This has to change, and this legislation is a good opportunity to talk about the real ideological barriers that are hindering common sense solutions to this city’s problems.