June 16, 2008
Copyright © 2008 by Marc Norton
A political strategy for passing a set of progressive revenue measures here in San Francisco, as Paul Hogarth recently wrote, "is still in the works." That comment should win the Understatement-of-the-21st-Century Award.
Some of us San Franciscans have been trying to tax the rich for years, with precious little success. Campaigns to make the landlords of downtown's skyscrapers pay for the huge amount of Muni service they get failed in both the 1980s and the 1990s. Supervisor Tom Ammiano's progressive revenue package, introduced back when he was a freshman supervisor in 1995, courageous as it was, brought him little more than grief and notoriety among the upper classes (although he did succeed in raising the hotel tax from 12% to 14%).
And since then it's all been downhill. In 2001, the Board of Stupervisors went south, caving in to a lawsuit by a group of corporate privateers, dubbed the "Filthy 52" by Tim Redmond of the Bay Guardian, and abolished the City's long-standing gross receipts tax, at a cost of roughly $25 million per year ever since -- as well as paying out $64 million, plus interest, to the likes of PG&E, Chevron, Bechtel, the Gap, and the Hearst Corporation.
At the "Budget & Revenue Town Hall" that Hogarth reported on, I heard Steve Fields of the Human Resources Network say that Board of Supervisors President Aaron Peskin, the architect of the aforementioned business tax lawsuit settlement, has admitted that the settlement was a mistake. That's the first I heard of Peskin's alleged remorse. Assuming that Field's report is correct, may I humbly say that we told you so?
Subsequent efforts to recapture some of the revenue lost as a result of the business tax lawsuit settlement have flopped miserably, which is what happens when campaigns are poorly conceived and poorly executed. In 2002, a ballot initiative to double the real estate transfer tax on properties sold for more than one million buckaroos lost big. This proposal is eerily similar to one that Peskin has now introduced. In 2004, Newsom hyped an initiative to restore a small bit of the gross receipts tax, which also lost big, in large part because business folks fought a bundled provision to require partnerships to pay the payroll tax. And now, again eerily, Peskin is proposing to take the deal-killing partnership tax back to the ballot on its own.
What's going on here?
I would gladly vote yes, yes, yes to both of Peskin's recent proposals. But history shows that I would likely be on the losing side, and that about 55% would vote no, no, no. That is the way the vote came down on the downtown transit assessment district in 1994, the real estate transfer tax increase in 2002, and the gross receipts/partnership tax restoration in 2004. Sorry, that's the sad facts.
Let's get specific:
Peskin's first proposal is to double the real estate transfer tax for properties that sell for more than $2 million. In 2002, when the same proposal went to the ballot, the threshold was a mere $1 million. The opponents of the real estate transfer tax increase frightened every homeowner (and wanna-be homeowner) in the city to death, filling our mail boxes with pictures of little-old-ladies and their homes. So, Peskin is going to solve that problem by raising the threshold to $2 million? This time the opponents will fill our mail boxes with pictures of little-old-ladies and their duplexes.
(You know the joke where the proud mom brags about her son buying a house in San Francisco? How much did he pay, asks her friend? One million, says proud mom. Oh, he bought a small house, says her friend.)
If Peskin, the Human Services Network, Coleman Advocates, or our esteemed Labor Council are serious, that threshold has to go way, way up. Maybe $5 million. Maybe $10 million. Make it impossible for a homeowner outside of St. Francis Wood, Pacific Heights or Seascape to think they might have to pony up anything. Point this tax directly at those big skyscrapers downtown, and at them alone. Does this mean less revenue? Certainly. But if you lose the whole shebang, what you get is exactly $0.
Peskin's second proposal is the partnership tax. Get real. Sure we all hate lawyers and doctors and dentists and such. But you can bet your bottom dollar they will portray themselves as the little guys, and ask why the big guys downtown are getting off the hook. They've done it before, and they will do it again. And we will lose again. I can't wait to see Scott Hauge fronting for them again, just as he did in 2004, with whatever Small Business Organization he runs at the moment.
Am I making myself clear?
Look, I am full of ideas about ways to tax the rich. And I will spout off about them at every opportunity I get. How about making the existing business tax progressive, so the big guys pay a bigger cut than the small guys? How about taxing the income of high-end executives who work in the city? How about a straight-up restoration of the gross receipts tax? How about raising the hotel tax for our booming tourist trade? Yeah, yeah, you say, so what? Maybe these are good ideas, but talk is cheap.
And you doubting Thomases are right. As long as this discussion happens only episodically, during the inevitable annual budget crisis, and just before an election, we lose -- probably no matter how good our proposals are. Rich people have a lot of money, don't they? And they are willing to spend it to defeat taxes on themselves. The rest of us don't have a lot of money for these campaigns.
What we do have is people power. But to win against money with people power requires real organization. Not just a campaign organization, but ongoing organization, the kind that involves real organizing. And there's the rub. Nobody in this town takes taxing the rich seriously enough to put real resources into real organizing against the rich. Let's face it, most of the big players with real resources in this big, small town rub shoulders with the Big Boys every day, one way or another. Nobody wants to get in their face all the time, whether you run a non-profit looking for money, or a union looking for a deal.
Like it or not, what San Francisco needs is day-in and day-out organizing to expose the rich and their schemes, to contrast their brazenly disgusting life style with the life the rest of us lead, and to constantly expose the fact that we pay the taxes while the rich laugh all the way to the bank. We need to teach working folks who the Enemy is, every day, all the time, not just at budget time or election time. Organize, organize, organize.
Without organizing, we will never build the organization necessary to win these tax-the-rich battles. Instead, we line up, non-profit by non-profit, union by union, to take the crumbs that sometimes fall off the table...
...And get all hot at election time and throw ourselves into another losing battle. As the philosopher George Santayana famously said, "Those who cannot remember the past are condemned to repeat it."
[Organize graphic © 1980 Bill Dobbs - www.animuse.com]