Tax Evasion Is Not a New Technology

There is nothing innovative about a company not paying its fair share of taxes.

With the growth of companies using “new technology” platforms to provide services, ranging from rides to short-term housing rentals to food delivery, there is much debate about the potential impacts and how to regulate them. While these services can offer convenience and other benefits, they can also cause problems. As the questions about regulations and the rights of workers continue to be debated at the state level and in the courts, at least one fact about these companies should be clear and easy to determine — that using a new technology should not allow them to evade paying their fair share of taxes.

It is unreasonable and unfair for a company to benefit from not paying taxes as a method to increase profits compared to “old technology” companies. And it is unfair to those that are providing similar services and are paying their taxes and fees, including “traditional” hotels and taxis. It is also unfair to the public, who relies on those tax revenues to pay for the costs of filling potholes, public safety, libraries, parks, and more. There is nothing “innovative” about tax evasion — it is an illegal act that has been committed by various people and companies, with or without technology, for hundreds of years, and nobody should consider it to be an impressive invention.

Last year, the Oakland City Council passed a resolution that I wrote, calling on the city administration to start collecting taxes from these types of companies. When a year passed with no action taken, we again insisted during the budget debate that these collections begin. Now, we have been told that collections have started with some short-term residential rental companies, but important work remains to be done, including with transportation network companies, such as Uber and Lyft. The State of California has prevented local cities from regulating these companies, but that is no reason not to collect taxes, because that is a separate issue from regulation. So now, Councilmember Dan Kalb and I have asked the city administration for an update and options for action and to provide information on the current status of tax collections, so we can ensure fairness in our tax system and bring in the revenue to provide needed public services.


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