Sticker Shock Treatment: Fake Governor to Pay Real Sales Tax


At the stroke of midnight Angelenos will get hit by a double dose of sales-tax increases that will bring our county's up to 9.75 percent -- tying us with Alameda County for having the

state's highest countywide tax. (Some individual cities, such as Pico Rivera and South Gate, will be even higher -- 10.25 percent.) The boost comes as the result of last fall's passage of Measure R and from the state legislature's recent passage of a "temporary" one percent increase. Two hours prior to midnight, a crew of anti-tax activists will gather at Hollywood's World Book & News stand, 1652 N. Cahuenga Boulevard, to count down the last minutes to the end of cheap living.

Covered-up Chevy logo at closed L.A. dealership

The plan, we hear, is for self-described "citizen-scorpion" John Walsh to don his $35 Arnold Schwarzenegger mask at 11:55 p.m. and buy a magazine. Then, at 12:01 a.m., Walsh will purchase the same magazine at the new, higher sales-tax rate.

When that higher rate kicks in, L.A. businesses selling big-ticket items such as refrigerators and large-screen TVs are expected to take a hit, as residents living near the borders with Orange and San Bernardino counties will literally cross the line to avail themselves of lower sticker prices. That strategy won't do you any good with automobiles, however, since the DMV taxes you according to where the vehicle will be registered. You can always buy your car in Nevada or Arizona, but you will have to have your car registered there. This is only slightly good news to local car dealerships, who, economically speaking, are confronting the type of sea change last faced by Noah.

"Cerritos Auto Square has seen a turnover of some dealerships," notes

Jack Kyser, chief economist of the L.A. County Economic Development

Corporation (LACEDC). "And in my town, Downey, the Lincoln-Mercury and

Ford dealers closed."

In fact,

all across the county the lights of car dealerships have been going

out. This is no small matter, according to Kyser, as such business

provide not only jobs and property tax revenue, but income from taxes

charged on used cars and parts and service. In some small communities,

the closing of a car lot has created real economic problems -- Norco in

Riverside County recently went out of its way to ensure its dealerships stayed afloat.

Oddly enough, though, Kyser says that sales-tax increases generally don't hurt the businesses of communities that enact them.

L.A.

County's sale-tax increase arrives at the same time of an LACEDC survey

reporting that new business expansions in Southern California declined

nearly 14 percent in 2008. However, the report, which comes out

tomorrow, notes that L.A. County only experienced a slight reduction

(98 expansions, down from 2007's 100) that had been expected since

they've been declining since 2004. According to an LACEDC press

release, the group defines "major expansion" as "a new lease (or

expansion of an existing lease) of at least $1 million in value or of

20,000 square feet or more. A useful rule of thumb is that for every

major expansion, there are at least three smaller ones not tracked in

the LAEDC's survey."


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