THE BLOG
11/25/2012 11:22 am ET Updated Jan 25, 2013

Black Friday Reminds Us How to Get L.A. 'Into the Black'

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Black Friday may have just passed, but I wish Los Angeles were seeing more green today.

Black Friday gets its name from the chaos that can reign in stores as people crowd-in for once-a-year sales, and because it's when many retailers are said to finally turn a profit -- or get "into the black." The question for Angelenos this year is how Los Angeles will get into the black.

The solution to our city's budget shortfall is not to tax or cut, but to grow our economy -- to act from an understanding that it's economic activity that generates the revenues that put cops on the street, parks in our neighborhoods and books in our libraries.

That's why I'm leading the charge to eliminate Los Angeles' gross-receipts tax on businesses.

This tax drives retailers and other businesses outside the city, causing the city to lose millions of dollars in sales tax and other revenues that could support critical city services. The tax also drives employers farther away from city residents, increasing commuter traffic on our streets and freeways.

We must ask why that at the same time Los Angeles County has gained jobs and population, the City of Los Angeles has gained population but lost jobs. Many things set the city apart, but one of the chief factors is our gross receipts tax, which taxes businesses even when they lose money and is the highest in the county. All business is competitive, and the City of Los Angeles' punitive tax scheme clearly puts our city at a competitive disadvantage.

During my time in office, I've led a number of measures to address this problem. I've led the way to eliminating the tax for small businesses and to target tax relief for key industries and
highly-mobile industries that can easily pick up and move elsewhere, like the Internet sector.

Recently, to give our economy a jolt, I joined with Councilmember Mitch Englander to author legislation to extend the elimination of the tax for new businesses. We also teamed up on a motion to eliminate the tax for car dealerships. Los Angeles has lost 95 dealerships to
surrounding cities in the last 25 years, and they will tell you that one of the major factors was the difference to their bottom lines from the gross receipts tax. The difference to the city is clear -- to offset the loss in gross-receipts tax revenues from all of the car dealerships in Los Angeles, we only need to attract about five, and in just a few months, we are already close to that mark.

Other cities, states and countries have taken the fight for jobs to Los Angeles. And right now, they are winning, in no small part because we help defeat ourselves with our gross receipts tax. For the holidays, I'm asking Angelenos and Los Angeles' policymakers to get behind my legislation to eliminate it. It would be a gift for us all.