Assault on S.F.’s businesses is revenge masquerading as policy

The next time Supervisor Aaron Peskin wants to start a fight, he might want to pick on someone his own size — San Francisco is just a wee bit too big for him.

And that’s what our hot-tempered board president has essentially done, declaring war on businesses large and small by proposing a new tax on companies without any input from those that would be most impacted by it.

Peskin’s headline-grabbing gesture this week comes complete with the same rhetoric that has accompanied similar efforts by The City’s left guard to write checks that others pay for. He said the tax would be aimed at rich, downtown businesses interests, when in fact it would hit corner stores, restaurants, small tech firms and new life-science industries that San Francisco has been courting in recent years.

The only upside of this latest foray into wedge-issue politics is that Peskin’s surprise package has almost no chance of passing — a bigger long shot would be if the U.S. soccer team were to beat Brazil in the World Cup. But at least that squad would know what they were up against. Peskin’s tax grenade was lobbed into City Hall without a call to the mayor’s office, generally considered a considerate gesture when you’re about to start a war with San Francisco’s business community.

“If the phrase behind closed doors means anything, then this is the dictionary definition of it,’’ Mayor Gavin Newsom told me Wednesday. “We’re trying to get the economy back on track, and this just sends the opposite message when we’re trying to tell companies that San Francisco is open for business.’’

Newsom said that just last week he met with executives from United Airlines who are considering moving corporate headquarters out of Chicago. Adding a new tax would conceivably clip the wings on any such venture — a venture that would be a considerable coup for most municipalities but could be permanently grounded under the vindictive politics of The City.

Peskin’s back-room deal is in part payback to The City’s Chamber of Commerce, which along with several other business associations filed a lawsuit against the Board of Supervisors last month for failing to carry out Proposition I, a voter-approved mandate requiring the board to do economic analyses of legislation before the board approves it. Peskin said the gross receipts tax he is now proposing is intended to replace one that was nixed five years ago after the courts ruled similar taxes were unconstitutional.

At the time, San Francisco was potentially on the hook to lose hundreds of millions of dollars over the lawsuit. But amid much grumbling from the so-called progressives on the board who were willing to gamble with San Francisco’s fiscal stability, The City settled the lawsuit for less than $80 million, and Supervisors Peskin, Chris Daly, Gerardo Sandoval and others have been looking for a way to hurt “big business,’’ even if it means hurting small, medium and sole-owner proprietorships along the way.

Good luck selling that batch of sour grapes to voters, who rejected two new tax proposals in 2004. The only difference was that those proposals were done with the endorsement of the business community and the Mayor’s Office, and yet the initiatives still got crushed at the polls. Peskin’s plan will only remind voters that the board, which is responsible for approving a $5 billion budget, oversees a wasteful bureaucracy that spends way more money than The City can take in — which is why San Francisco faces annual operating deficits.

Newsom told me he won’t support Peskin’s tax proposal, which he says could do a lot more damage than just as a political poke in the eye to the companies that dared sue The City over an illegal tax six years ago.

“They’re fighting old battles,’’ he said. “They want to project the image that they’re taking on these big Fortune 500 companies, but it’s not just them — it’s all these other businesses that we’ve been trying and succeeding in getting to come to San Francisco. Something like this could have a real damaging impact on future economic development.’’

The bottom line on this latest piece of lash-out legislation is that it’s based less on tax generation than on political division. The bogeymen of the “downtown business interests’’ hardly exists, having been replaced by new types of companies that barely resemble the corporate icons our quixotic board members continually joust at.

But it might stir an unexpected reaction among the citizenry. History tells us that a whole new movement once started when some official suggested more taxation without representation.

ecarpenter@examiner.comBay Area NewsLocalNews ColumnistsScience and Technology

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