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Herb Wesson: Your LA County Tax Man

LA WATCHDOG--In June, City Council President and wannabe County Supervisor Herb Wesson sponsored a motion instructing the Chief Legislative Analyst to “draft a motion to include in the City of Los Angeles’ 2019-20 State Legislative Program SUPPORT for any effort to amend State law to grant counties the authority to seek voter approval of a tax on personal income above $1,000,000 per year as a means to fund additional homeless housing construction.” 

This is a follow up to Los Angeles County Board of Supervisors resolution of May 17, 2016 to levy a “millionaire’s tax” designed to raise about $250 million a year to fund its homeless strategies. 

However, since the County’s resolution, on November 8, 2016, City voters approved Measure HHH that authorized the issuance of $1.2 billion of general obligation bonds to provide affordable housing for the homeless.  

And then on March 7, 2017, County voters approved Measure H, a quarter of cent increase in our sales tax designed to raise $355 million a year to fund services for the homeless. 

Of course, Wesson, in an effort to deflect attention from the county income tax, did not include the County sales tax increase in his poorly written motion that babbled on about 3D printed housing, automation, artificial intelligence, project labor agreements, and targeted local hiring.  

The thought of a County income tax is frightening because this would give the Supervisors access to our paychecks.  Initially, our Elected Elite will tell us that the millionaire’s tax of 0.5% for all income over $1 million is just for the 1% and that these fat cats can well afford it.   But once they have access, grab your wallets as the rate will increase and the income threshold lowered as the Supervisors will come up with numerous worthy causes or crisis situations that desperately require additional funding.   

All you need to do is look at how the State has increased our tax rates over time to a job killing maximum of 13.3%, the highest in the country. 

If the County were to institute a millionaire’s tax, this would add a level of volatility to the County’s revenue stream, placing inordinate pressure on the budget in down years, similar to what the State experienced during the recession.  This would prompt the political class to call for even more taxes to make up for the shortfall at a time when we can least afford another hit.  

As for the idea of a County income tax, this is just another money grab, especially given that the voters approved HHH and H.  More than likely, this new revenue stream will allow the Supervisors to divert existing funds to heed the demands of the campaign funding leaders of the public sector unions for increases in salaries and benefits.  

Before the County considers a millionaire’s tax, the Supervisors would be well advised to consider the impact that it would have on the local economy, its businesses, jobs, and the executives who make investment decisions.  It would not be wise to have the County, and the City, to be a significant disadvantage to other nearby counties.  As it is, California is not business friendly because of its high taxes and overly burdensome regulatory climate. 

 (Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and is the Budget and DWP representative for the Greater Wilshire Neighborhood Council.  He is a Neighborhood Council Budget Advocate.  He can be reached at:  lajack@gmail.com.)

-cw