OAKLAND — In an effort to help the city’s merchants and restaurants reeling from losses after almost three months of being shut down, some council members are proposing revamping the way small businesses are taxed.
Some of the tax burden would shift from small businesses to larger ones under the proposal announced Thursday at a news conference. It would lower taxes for small businesses such as local restaurants, retail and wholesale ones that generate $250,000 or less in revenue per year. In turn, those that make more revenue would be taxed at higher rates.
Details of the rates or how the system would work are still in the works, council member Nikki Fortunato Bas said at a press conference Thursday where the proposal was announced.
The tax change would have to be approved by voters. If the City Council agrees to place the measure on the November ballot and it passes, the new taxes wouldn’t go into effect until Jan. 1, 2022, Bas said.
The tax, titled “Lift Up Oakland,” would also raise “tens of millions” in city revenue and boost an estimated 24,000 small businesses in the city, Bas said.
In an online and telephone and survey of 400 likely Oakland voters, Bas said at least 59% favored the shift in taxation. A simple majority would be required for a ballot measure to pass, according to the council member.
As the city recuperates from the fallout from the virus and the shelter in place order, Bas said she wants to support small businesses, which are the foundation of the local economy.
“The decisions the city of Oakland makes now will help us weather the current crisis and set a better course for our communities as we emerge, recover,” she said in a statement. “Oakland must act to both protect city services and support struggling small businesses by making our local tax structure equitable and fair.”
Tracey Williams, owner of Urban Furniture & Boutique on Grand Avenue, spoke about the struggle small businesses are experiencing because of the coronavirus pandemic and subsequent shuttering. She is the founder of Urban University, a nonprofit that helps train single mothers. Urban Furniture has suffered a 86% loss in revenue, and that’s revenue that she normally would allocate for job training, housing and case management for single mothers, she said.
“Oakland has to invest in small businesses,” Williams said.
The proposal is supported by local unions, such as Oakland Firefighters Local 55 and the Alameda County Central Labor Council. Firefighter union President Max Unger said this new revenue would help the department.
“As Oakland has grown, our fire department continues to shrink,” he said.
Last year, firefighters had more than 100,000 service calls and the department is at “a tipping point.” He said they do not have enough resources to fight fires in homeless camps, high-rises or wildlands.
The tax revamp, proposed by Bas, is also supported by council members Sheng Thao and Dan Kalb.
The proposal is scheduled to be taken up by the council’s rules and legislation committee when it next meets on June 22.