On Saturday morning I was reading through MSM websites gathering news stories, and almost did a double-take when I came across one story filed by Phil Willon on the Los Angeles Times website — the headline said that the Los Angeles City Council had relaxed a tax on business.
The reason for the double-take, of course, is that the Mayor and almost all of the City Councilmembers of Los Angeles are liberal Democrats who undoubtedly are looking for more ways to gauge money from area businesses, not provide relief from taxation.
When I read more, however, it became very clear to me what was going on. The specific issue was the City Council providing tax relief to "internet-based" businesses. Or put another way, these are businesses that can very easily pick up and leave Los Angeles and not materially impact their business-model.
The council unanimously approved the measure despite concerns by some members that the tax break would be applied retroactively to Jan. 1 and cost the city $3.4 million in revenue. They argued that L.A. could not afford to lose that money at a time when the city faces a $212-million budget shortfall.
But some of the 1,400 businesses affected by the measure had threatened to move out of the city if the tax rate was not reduced, and proponents said the city would lose even more tax revenue if those firms relocated.
“We will lose more than $3.4 million if we don’t do it this year," said Council President Eric Garcetti. “It’s the right thing to do on dollars and cents.”
While it is nice to see some logic prevailing on the Los Angeles City Council, unfortunately most of the businesses in the City of the Angels do not have the option of picking up and moving to a more business-friendly environment. So if you are a business owner, large or small, in Los Angeles, don’t hold your breath waiting for the same kind of treatment that internet-based businesses have gotten.
I’m reminded of a mealtime conversation I had once with Napa Valley vintner Dennis Groth, who at the time was lamenting the extremely steep increases in Workers Compensation Insurance costs (he had shared that it now cost him more to pay Workers Comp premiums than the premiums to provide health care for his employees). Groth said, "It’s not like I can move to a more business friendly state. My business is planted right here in the Napa Valley, I’m not going anywhere."
So many businesses, like Groth Estates Vineyards, are not going to be able to move out of state. But that doesn’t mean that they don’t need tax relief in order to allow them to thrive or even tread water in our current recession.
March 8th, 2010 at 12:00 am
Amazing! Only when threatened with a business exodus and budget implosion do the progressives (hate to call them liberals as that term at onetime had a rich tradition) offer tax relief.
Surely the Dems in the state capital will bravely follow their lead and…
Sorry… Couldn’t even finish typing that before I burst out laughing.
March 11th, 2010 at 12:00 am
Not funny…..the unions are pressing their purple shirts….they are coming….you can count on it!