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City seeks business tax to raise revenues

Original post made on Jul 26, 2008

In need of money for a new $80 million public-safety building that voters seemed unwilling to pay for, the City of Palo Alto is moving forward with consideration of a business tax.

This story contains 54 words.

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Comments (12)

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Posted by Richard
a resident of College Terrace
on Jul 26, 2008 at 10:36 pm

It's about time, don't you think for such a business tax when "Incredulous business owners have even demanded the city provide them with a written letter stating there is no tax, so they won't later be fined for not paying it." Incredible. Kudo's to Bern and Pat for coming up with and supporting this idea, and not just as a way to pay for a Public Safety Building, but to be sure that the big businesses with many employees who've been around for so long, yet pay so little property taxers will be asked to pay their fair share. I am really suspicious of the Chamber's numbers (Lonnquist quoted in the story) of the businesses paying 60% of taxes, yet receiving 40% of the services- this factor includes the shopping center and hotels. I'm sure the percentage paid by companies in the Research Park is in the low single digits! We need some more good investigative reporting by the Weekly to dig these figures out.

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Posted by Solutions
a resident of Downtown North
on Jul 26, 2008 at 10:52 pm

Web Link

Tax _services_.

Why aren't we taxing attorneys, accountants, consultants, etc. etc. The service sector is perhaps the largest sector of our local economy.

Unless service-based enterprise is not part of this, it's a joke.

We should watch this one closely, because several policy makers hail from the service sector: attorney, architect, consultant, accountant, economist, etc.

Also, business owners, and residents, deserve an accounting for certain kinds of value received for taxes payed.

The tools to help measure this are readily available. Firm milestones for city operation performance re: new tax generation should be able to be _shown_ to policy makers and the public.

Taxes are not evil, but when taxes are raised, those who are footing the bill deserve an accounting of what those taxes are doing, in dollars-and-cents. It's about time we take this on, and move into 21st century municipal diligence.

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Posted by More Taxes
a resident of The Greenhouse
on Jul 27, 2008 at 6:13 am

The timing is bad. HP, Stanford, Facebook are all either reducing the size of their footprint in Palo Alto or are looking for office space outside PA. Expect more businesses to leave town if this business tax is imposed.

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Posted by Walter E. Wallis
a resident of Midtown
on Jul 27, 2008 at 3:28 pm

How about a tax on newspapers? Or churches?

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Posted by Solutions
a resident of Downtown North
on Jul 27, 2008 at 3:45 pm

Walter, we agree on newspapers. Churches? No.


More taxes: "Expect more businesses to leave town if this business tax is imposed"

Where are they going to go - all the other cities around here have a business license tax. You're going to have to do better than that.

So, where is the hue and cry form the newspapers to tax legal, real estate, and other services? Might it be that we've heard _nothing_ about that from our self-interested press because real estate agents are a major source of newspaper revenue?

Bill (Johnson), Dave (Price), etc. how about it? When are you going to editorialize to share the wealth?

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Posted by Solutions
a resident of Downtown North
on Jul 27, 2008 at 3:46 pm

One cavast: ANy church that overtly involves itself with political campaigning, loses its tax-exempt status. NO exceptions

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Posted by Jack
a resident of Midtown
on Jul 27, 2008 at 4:31 pm

Solutions, Businesses are leaving this city, big time. They seem to understand something that you do not. You ask, "Where are they going to go"? Their answer seems to be anywhere other than Palo Alto.

Something is wrong in Palo Alto. We no longer attract businesses. We now reject them, and they reject us. How can we get taxes from the business community, as they become extinct? Have you noticed that Roche (1000 employees) is leaving Palo Alto?

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Posted by Paul Losch
a resident of Community Center
on Jul 27, 2008 at 6:01 pm

The company I own and run is based in Fremont. I pay a tax each year as a business located in Fremont, and sales tax there is higher than it is in Palo Alto. I have other business reasons besides these two tax factors for having the business located there. For a small business like mine, the sales tax and business tax are such a small matter in the scheme of things, it boggles my mind to think that similar small businesses located in Palo Alto would decide where to locate based on such considerations.

The fact that I live in Palo Alto and such taxes are lower here than in Fremont provide no compelling reason for me to locate my company here instead of Fremont. There are much larger business considerations that go into such a decision.

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Posted by Jack
a resident of Midtown
on Jul 27, 2008 at 6:15 pm

Paul Losch,

Do you sell a manufactured retail product? If so, where do you produce your goods? In Palo Alto? If so, could you please enlighten us as to the regulatory burden that you face?

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Posted by Paul Losch
a resident of Community Center
on Jul 27, 2008 at 6:37 pm


My company sells a product that is finished in our facility in Fremont. Part of the product is from parts made outside the US, part of the product is from ingredients made in the US. Final assembly and processing is in Fremont.

We sell to many retailers around the country.

I can provide no enlightenment around regulatory matters. I don't view such a question as having any relevance to the topic posted here around taxation matters.

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Posted by Solutions
a resident of Downtown North
on Jul 27, 2008 at 11:17 pm

Jack "Something is wrong in Palo Alto. We no longer attract businesses"

That's a myth. Palo Alto is a highly desirable destination for many kinds of business. we have quite a diverse business base here.

Re: Paul Losch's situation, he's probably referring to rent. Rents are sky-high here. Asking someone who is concerned with unit margins to manufacture here (unless it's software) would be madness. It's just too damned expensive.

Again, take a look at who's settling in to Palo Alto - law firm; boutique restaurants and other niche businesses (like boutiques); consulting firms; R&D; beauty and spa businesses (a high margin business for those with following clientele), and so on. What we've missed is the big box opportunities, and that's all but gone. Just look within a square mile of Costco, or IKEA. The big box train has already left the station.

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Posted by a long time resident
a resident of Another Palo Alto neighborhood
on Jul 27, 2008 at 11:51 pm

A few obsverations: Companies leave because of very high rents, commute times of employees, Company mergers, extra super high housing prices and rents and the current policy of running business out of town like at Alma Plaza as a friend developer can make 10's of millions in profits. And housing at the Sun Site instead of auto dealerships.

The city is run by real estate developers and corp. people for what is best for them and their friends.

There should be a tax, fee,? based on floor area of all but residental properties. Like a $1 sq.ft./yr with some allowance for a few thousand sq ft for small businesses.
The big companies probabaly cost the city the most for fire and police protection. Much or most of the costs to the fire dept's are for special equipment,traning, inspections of multi story bldgs and big buildings and dealing with toxic mtls. Fighting house fires is totally differnt and fairly basic and most burn down anyway.

Most of the policing is downtown, Stanford shopping center and the corp. sites. There are large areas of the city where little or no daily policing goes on.
With GPS the city could track where and when policing and fire fighting/presence is happening and at a later date post it on it's web site.

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