From today’s Wall Street Journal comes this sad but illuminating column by Rick Newcombe, president of Creators Syndicate. Newscombe is suing Los Angeles for attempting to retroactively impose a higher tax rate on his business. This is a real-world example of how tax and regulatory policies kill jobs.
Everything was fine until the city started running out of money in 2007. Suddenly, the city announced that it was going to ignore its own ruling and reclassify us in the higher tax category. Even more incredible is the fact that the new classification was to be imposed retroactively to 2004 with interest and penalties. No explanation was given for the new classification, or for the city’s decision to ignore its 1994 ruling.
Their official position is that the city is not bound by past rulings — only taxpayers are. This is why we have been forced to file a lawsuit. We will let the courts decide whether it is legal for adverse rulings to apply only to taxpayers and not to the city.
We work with hundreds of outside agents, consultants, independent contractors and support services — many of whom pay taxes to the city of Los Angeles. This spurs a job-creating ripple effect on the city’s economy. Yet I suspect many companies like ours already have quietly left town in the face of the city’s taxes and regulations. This would help explain the erosion of jobs.
North Carolina, are you listening? There’s no better way to kill jobs than to play games with taxes and regulations in a desperate search for more and more cash.
