Everybody bitches about taxes but nobody does anything about it — except for the city’s Internet service companies, somewhere between 800 and 1,400 businesses depending on which document and which official you listen to..
For the last few years, they have been raising hell over being reclassified from a very low business tax rate to a high one in a haphazard fashion the left some paying little and others, like the 200-employee Shopzilla, ordered to pay high taxes.
On Friday, while most basic services like parks and libraries are being gutted, thousands of workers fired, and City Hall is looking to hit the public with a rash of higher fees, taxes, rates and penalties, Internet companies got a $3.4 million tax break this year that adds to the estimated $212 deficit that now exists.
The cost will be higher next year, which is what happens when you reduce people’s taxes by 80 percent.
All they had to do was threaten to move to Glendale or other nearby cities, rally the business community behind them, persevere for 11 months after the City Council took notice and wait for their windfall.
Paul Koretz, Jose Huizar and Tony Cardenas yelped about the retroactivite provision, the vote was unanimous because they were warned of consequences if they delayed approval a week when the Council will be rushing off to a hard-earned vacation. It must be exhausting nodding approval no matter what you think is right.
It isn’t just break on future taxes, it’s retroactive so they are going to get rebates for the tax payments that were due March 1 to cover their gross receipts for all of 2009.
Don’t you wish you could get the same deal?
Too bad you’re not a corporation. If you were, the Council promised to come back with a whole slew of tax breaks for all kinds of companies even as they try to erase budget deficits of $2 billion over the next two years.
It works this way: The mayor and Council have figured out that LA is the most business unfriendly city in Southern California with the highest tax structure, the least efficient policies and practices, the most extensive portfolio of sweetheart contracts with unions and contractors and the most generous subsidies for developers, well-connected ones at least.
It’s why we call LA city government a failed experiment in municipal socialism. It’s an oxymoronic phrase appropriate to moronic policies.
So with bankruptcy looming, City Hall is turning away from socialism to Milton Friedman’s capitalism, cutting off free trash collection and other subsidies to the poor and cutting taxes to business, giving extra tax credits for job creation and ready to loot the DWP, Harbor and Airport to buy even more new jobs..
The reason is that with 13.4 percent unemployment, and even Eric Garcetti admitting the real rate is twice that, there is a sudden realization that good-paying jobs drive the economy and lower taxes can actually generate more revenue to the city over time.
Don’t get too excited. It’s not like they are ready to call a ceasefire in their decades-long war against the middle class.
When you’re already broke, somebody has got to pay for all these job-buying efforts. And that’s the four million residents of the city, rich and poor and in between, but mostly those in between.
If you got a decent job or a two-income family or if you are jobless or retired or struggling to make ends meet, it doesn’t matter. Nobody cares about you. You don’t own a business so you get the bill.