Wednesday, September 29, 2004

The fight over Proposition K -- the new gross receipts tax -- is really heating up. Here's Ryan Chamberlain of No on K, famous citywide for his e-mail campaigning:

"See, I met up with some friends for dinner last night. Thing is, I had already eaten, but I joined up just to be social. I ordered an appetizer to be polite. Then lo and behold, the bill comes and this guy says, "I need $50 from you." Huh? Fifty? But I ordered an $8 appetizer?!?! He gave me this look...you know...that look that's calling you a cheapskate and a mooch? "We divided the bill up equally. You're going to pay your fair share, aren't you." And of course, the guy pointing the finger for money was the guy who ordered the biggest steak on the menu, apps for the table (that nobody wanted) and chased it all with three high-end scotch-rocks. So now I need 20 bucks to help cover this bill.

"And that, my friends, is the story of Proposition K!

"Do not let the term "fair share" guilt you into allowing Prop K to happen. Over-consuming special-interests throughout City government are trying to get their steaks subsidized through this back-room deal. This measure will pillage small businesses. Once again, Prop K is a gross receipts tax. So it hits a business on the top line...before payroll, before rent, before insurance, etc. You might be losing money, and still have to pay this tax. And, as an added bonus, it further taxes distributions to owners/partners."

The No on K folks seriously think the most people -- candidates even -- don't know that "gross receipts" doesn't mean "profits tax."

And now the Yes on K folks are getting their act together. Tuesday -- same day as the Ex article on K polling, and as Chamberlain's e-mail, the Yes on K site went up with this teaser:

"Please Join Our Campaign!

"The "Save the Services" campaign is in full swing and we want you to join us. Please check out our new website at www.savetheservices.com and pass this email along to your friends.
San Francisco Propositions J, K & O protect basic services that are the heart of our compassionate city. State and federal cutbacks have put San Francisco in a financial crisis - the largest deficit in the city's history - and now essential services are at risk. City Hall is doing its part. City leaders consolidated departments, eliminated wasteful perks, and reformed the way services are delivered to improve efficiency.
City workers volunteered to cut their own pay. But there is still a gap. Propositions J, K & O are a priority for San Franciscans.
Other cities around the state have closed their deficits by cutting services for those most in need: services such as health clinics, mental health programs, firehouses, parks, recreation centers and after-school programs. In San Francisco, we do things differently. We take care of our children, seniors and the poor.
Join Mayor Gavin Newsom and a broad coalition of business leaders, labor groups and service providers in voting YES on Propositions J, K & O."

Then No on K consultant Jim Ross sent out the following blast:

"Small Business Owners Call on the Yes on JK&O Campaign To Get The Facts Straight

"San Francisco- The Coalition of Small Business owners who have joined together to defeat Proposition K, today called on the Proponents of Proposition K to get the facts straight.

"The several inaccuracies on the Yes on JK&O website include:

· “Exempts small businesses that earn less than $500,000.” Proposition K is a gross receipts tax, it is on all of the money a business takes in, even if it is earning nothing or losing money.

· “Exempts small business” it seems like the proponents can even get their misleading statements straight. In one section they say this exempts small businesses that earn more than $500,000, then in another they state it exempts small business all together. The truth is small businesses will carry the burden of this tax. 93% of businesses who pay this tax will be small businesses.

· “Restoring a gross receipts tax on businesses earning more than $500,000 per year.” The previous tax was a one or the other situation, a business had to pay a payroll tax or the gross receipts tax which ever was higher. This is a new tax on top of the salary tax.

· That this tax is at a lower rate. That is true but the threshold for the previous tax was $2 million, this was a real exemption for small business.

· This tax is in response to a lawsuit brought by business groups. This one is true, but small business had nothing to do with the lawsuit, no small business was party to the suit. In fact it was Mr. Hellman’s allies among big businesses that lead the charge on the lawsuit that eliminated the previous business tax and now they want small business to pay the bill.

"Small Business Leader Scott Hauge stated “Small business are not exempt from Proposition K, in fact they are specifically targeted by this tax.” He went on to say. “This tax will add to San Francisco’s tax rate, a tax rate that is the highest on the west coast. Big businesses are leaving town because of these taxes but small business are committed to staying in town and serving our neighborhoods.”

Proposition K is a ballot measure in San Francisco that will create a new tax. This tax is a .1% tax on gross receipts or all money a business takes in regardless of expenses. It also changes San Francisco’s payroll tax to include pass-through entities such as partnerships. It was placed on the ballot by the Mayor and Board of Supervisors."


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