|Greuel-Garcetti Business Tax Reform Proposal Approved in Most Significant Tax Victory to Date
LOS ANGELES -- By winning a key council committee's approval today for their comprehensive business tax reform proposal, Councilmembers Wendy Greuel and Eric Garcetti made the most significant advance to date in their campaign to reduce the overall tax burden, simplify the system, and provide investments in the local economy.
"This is a great day for both businesses and workers," said Wendy Greuel. "Finally we have a business tax reform package that will attract business, create jobs and invest in Los Angeles' economy. Business tax reform is doable. There is nothing that should stop city leaders from passing the Greuel-Garcetti reform proposal."
"Los Angeles is at a crossroads," said Eric Garcetti, "and through hard work, we've finally found the right way to go. Through study and debate, we've made our case, and we've made it a strong one: Business tax reform is necessary. It's affordable. And it's a wise investment in the future of our economy."
The Greuel-Garcetti proposal, as passed out of the Ad Hoc Committee on Business Tax Reform, will:
- eliminate the business tax for small business providing tax relief for 61% of all businesses currently paying the city's business tax (130,345)
- give a 15% across the board tax cut for the remaining businesses while eliminating the tax on "bad debts"
- reduce the tax burden on small- and medium-sized film production companies by adjusting the scale at which companies pay taxes
- eliminate the business tax on individual artists earning up to $300,000 in gross receipts
- simplify the system by reducing the total number of fund classes from 75 to 7
- simplify the system giving taxpayers option of paying on cash or accrual basis
- incentivize location of "green power" entrepreneurs to affirm Los Angeles as the center of the energy revolution
The Greuel-Garcetti proposal provides a total of $92 million in tax relief. It pays for itself by using a combination of Tax Reform Trust Fund monies, increased compliance, and growth in business tax revenues.