Small Biz Tax Relief: My proposal for a progressive, fair change to our business tax

We’ve reached 3 months sheltering in place. As Black Lives Matter demonstrations continue nationwide, as we face an unprecedented health pandemic and economic recession, here in Oakland we must close a $120M budget gap.

I’ve heard loud and clear from hundreds of you: we must invest in visionary solutions that reimagine community safety and prosperity as the housing, jobs, and services we all need. 

The choices Oakland makes now about how to recover should focus NOT on “getting back to normal” but on moving towards a more just, fair, and equitable future, so that our children can live and thrive in our beloved Town, safely, affordably, and sustainably for years to come.

 

Modernizing Our Business Tax Structure
To Lift Up Oakland's Small Businesses

 

[Updated July 12, 2020]

Right now, one of the opportunities we have to reimagine how we care for our communities is how we support our small businesses -- by making our local tax structure more fair and progressive.

1. WHAT DO WE HAVE NOW?

Our corporate business tax system is outdated. It places most of the tax burden on Oakland’s small businesses, many owned by women, African Americans, and people of color.

Unlike other California cities, we currently have a flat tax rate. This means a small locally-owned restaurant in Oakland pays the same percentage tax rate as a chain restaurant; and a small retailer pays the same rate as a corporate retailer like Target. 

2. WHAT DO WE HOPE TO CHANGE?

We’re working to place an update on the November 2020 ballot for Oakland voters to decide on making the corporate business tax structure progressive and fair, meaning it would progressively increase tax rates for businesses with higher gross receipts. 

This change would increase fairness, support our struggling small, local businesses, and raise new, annual revenue for vital city services.

3. WHEN WILL THIS HAPPEN & WHAT ARE THE ELEMENTS OF THE PROPOSAL? 

I am co-sponsoring this measure with CM Sheng Thao and CM Dan Kalb and have been engaging stakeholders for feedback. On Tuesday, July 14, City Council will consider placing the measure on our November Ballot to give Oaklanders the opportunity to decide to: 

  1. Provide our smallest businesses tax relief. 24,000+ businesses who have less than $250,000 in gross receipts would pay a flat fee of $100. Restaurants, retailers, and wholesalers with gross receipts of $2.5M or less would see a reduction in their tax rates, while these mid-sized businesses may also see a reduction due to the marginal tax rate. 
  2. Create a progressive tax system ensuring corporations pay their fair share, with lower rates for businesses bringing in less gross receipts than for larger firms. This is a more equitable system, modeled after San Francisco.
  3. Raise tens of millions of dollars in new, annual revenue for city services like homelessness, street & sidewalk repair, trash collection and other community priorities.

 

Speak at the Council meeting Tuesday (agenda/details here), share an e-comment today or email Council today at council@oaklandca.gov. 

4. OAKLANDERS OVERWHELMINGLY SUPPORT OUR PROPOSAL

According to a poll conducted in May, Oakland residents overwhelmingly support modernizing the City’s business tax structure, which would require a simple majority vote. In fact, support grows quickly as voters learn more details: it starts at 59% in favor and grows to 74% after a neutral description of the measure.

“If Oakland wants its small businesses to emerge strong from this crisis -- especially its women, Black, and people of color owned businesses, already struggling long before the pandemic hit -- the city must address the deep inequities in our current tax structure and modernize it to become fair to every business.”

-- Tracey Williams, Urban Furniture & Boutique of Urban University Oakland on Grand Ave

This tax change would help our favorite restaurants, bookstores, and retailers and thousands of other businesses to benefit from a recovery that is truly healing -- not just going back to the status quo. And, it would help our entire city by raising new revenue to provide vital services that support our community, workers and small businesses. 

Read more on Oaklandside and SF Chronicle

Thank you to our partners Councilmembers Thao and Kalb, and to the Lift Up Oakland coalition bringing together community members, workers, small business owners, students, and faith leaders.

This progressive business tax proposal is just one way to get started creating an Oakland with stronger small businesses, communities and workers. I am also proud to support Schools & Communities First on the statewide November ballot, which will close corporate tax loopholes and reclaim $12 billion for schools and local communities, including $60 million for Oakland. 

 

#LoveLife  


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