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LA Dems Catch Tax Cut Bug

Could Los Angeles be turning its back on blue politics? If special interests have anything to do with it the answer will be no, as unions are pouring millions of dollars into the mayoral and city council races to keep their veto over policy in the country’s second largest city. But despite the best efforts of public sector unions to keep the city locked into an unsustainable, ruinous course of rising taxes, rising costs and fake pension promises, reality seems to be setting in on at least one issue.

In the race to replace outgoing Mayor Antonia Villaraigosa, the three major candidates all agree that the city’s onerous business taxes need to be cut to lure businesses back to the city. This isn’t surprising coming from Kevin James, a Republican talk show host, but the other two candidates are members of the city’s Democratic establishment, and they are equally committed to cutting these taxes in the name of business-friendliness, as Reuters reports:

[Democratic mayoral candidate] Garcetti, who supported the 15 percent cut, is the son of former Los Angeles District Attorney Gil Garcetti and in 2001 he was elected to the City Council, where he still serves. The candidate said Los Angeles needs to grow its local economy to turn around the city’s finances.

“If we try to tax and cut our way out of this, I don’t think that long term we’ll be a fiscally healthy city,” he said. “We have to get rid of a gross receipts tax that chases businesses away; we have to become more business friendly.”

This is excellent news. The Democratic mayoral candidates are right: Los Angeles like many other deep blue jurisdictions has put itself on a road to ruin and economic decay will hurt the city’s poor and even its unionized workers more than shortsighted spending policies will help them.

Unfortunately, this is a difficult time to implement a major tax cut. Years of blue politics have left the city with a major budget crisis, and many are warning that the city could go bankrupt if it doesn’t find a way to lower costs and increase revenue. Given the power of the city’s unions, any attempts to cut costs will be difficult, leaving increased revenue as the only real alternative. Unless the new mayor can lower the city’s costs against the opposition of the unions or find a way to conjure up more money without further degrading the city’s business climate, this tax cut may never make it past the campaign trail.

[Los Angeles image courtesy of]

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