Author: Charles Crumpley

The California Legislature’s decision a few weeks ago to make Internet retailers collect sales taxes may have seemed a simple and straightforward way to raise $200 million or more in tax revenue. But it’s already become a contentious mess that promises to get expensive for the state.

Oh, and one other thing: The state may get little or no additional tax revenue from it.

Why? Because it’s easy for out-of-state online retailers to sidestep the sales tax. All they have to do is end their so-called affiliate relationships. Those are the in-state companies or even individuals who get a commission when a visitor to their website clicks on an out-of-state retailer’s link and buys something. Without those in-state affiliates, most online retailers have no official, legal presence in the state, and therefore aren’t obligated to collect sales taxes for the state.

In the past couple of weeks, affiliate relationships have been dropping faster than European sovereign debt ratings. Think about that for a moment. That means the affiliates – who are in-state folks – will lose commissions. That’s a loss of income, which could result in a loss of income taxes for the state.

If I were a panhandler in Los Angeles, most days I’d hop on the subway and exit at the station that’s the closest to Wilshire Boulevard and Rodeo Drive.

The wealthier people in Beverly Hills, as well as the tourists who visit there, would be my best targets, I’d figure. After all, there’s a reason they call it the Golden Triangle.

I wouldn’t be alone. There’d be hundreds, maybe thousands, like me. And it wouldn’t take us long to figure that at the end of the day, we may as well sleep in a nice doorway or a park nearby and save the commute time.

Of course, all of that’s assuming that a subway stop is built at the Golden Triangle. So it’s little surprise that some business owners in that area met recently and decided to start pushing back on the prospect that a subway stop will be located near them. They don’t object to the planned subway, they just don’t want the station. They don’t want the Subway to the Sea to send them a gusher of folks from Skid Row.

They have other concerns as well. The merchants don’t want three years of construction. And they worry that shops near any subway station inevitably will cater to subway riders instead of the limo passengers who now frequent their pricey neighborhood.

The fact that Los Angeles is a capital of the Pacific Rim is old news. After all, America’s business relationship with Japan has peaked and the one with China is pretty mature.

But wait. L.A.’s status in the Pacific Rim may get a jolt soon.

That’s because a U.S.-South Korea Free Trade Agreement, long and dull though the process has been, finally appears to be nearing a successful conclusion. If approved, the treaty will result in a higher level of business between the United States and Korea because it will eliminate 95 percent of tariffs in five years.

This could be a big deal. And Los Angeles stands to be the prime beneficiary.

That’s partly because Los Angeles is where Koreans land when they enter the United States. There are about 450,000 ethnic Koreans here, more than anywhere outside of Korea, and there’s a thriving business community in the Koreatown area west of downtown Los Angeles. So any increase in business between the two countries will at least partly be done in and through Koreatown.

The state of California is swirling around the drain. Unemployment is the second-highest in the nation. Businesses are seeping away. The state budget deficit is intractable.

In times of crisis like these, we yearn for a true leader to step forward with clear thinking and bold plans. Someone who can get us on the path out of this morass.

Thank goodness Kevin de León has emerged. He’s a Democratic state senator who represents downtown Los Angeles. And he’s got a plan. De León has declared war on those dastardly flat sheets in hotels. He wants fitted sheets, and he’s introduced a bill to mandate them in all hotels in the state. The bill passed the Senate a few weeks ago, and if it passes the Assembly, it’ll be a misdemeanor for a hotel to use flat sheets.

No, no, no. This is not a waste of the Legislature’s brain power in a time of crisis. This is really important. You see, hotel housekeepers could get hurt lifting mattress corners to tuck in flat sheets.

If you’re looking for a recovery in the housing market, get a magnifying glass. It’s that hard to find.

Just look at last week’s Case/Shiller Home Price Index report. House prices in February nationwide were down 1.1 percent from the month before. And compared with the same month the year before, house prices were down 2.6 percent or 3.3 percent, depending on which index you look at.

Los Angeles didn’t fare much better. Prices in February were down 1 percent from the month before and down 2.1 percent from a year earlier.

Maybe it’s not a magnifying glass you’ll need. Maybe it’s a microscope.

In the official announcement, the chairman of the Case/Shiller index said, “There is very little, if any, good news about housing. Prices continue to weaken, trends in sales and construction are disappointing.”

You may have read an article recently about two Los Angeles motorcycle cops who were told to write 18 traffic tickets per shift. They objected. Quotas of that sort are illegal in California. As a result of their failure to fill their quotas, they claimed, they were given poor performance evaluations, threatened with reassignments and otherwise harassed by commanders.

So they sued the Los Angeles Police Department, and two weeks ago a jury awarded them $2 million.
Now, you may be tempted to assume that this is a random, one-off aberration. But you’d be wrong. It’s the latest in a string.

For example, an LAPD officer named Richard Romney had testified for another officer who was having a labor dispute with the department. Afterwards, Romney was fired. He sued. In November, an L.A. jury awarded him $4 million.

We’ve got CEQA to thank for the fenced-off, boarded-up eyesore at Sunset Boulevard and Gordon Street in Hollywood.

That building, an old Spaghetti Factory restaurant, should have been a new 23-story condo and office tower by now. Except that it was killed by CEQA, the California Environmental Quality Act. Not because the project was environmentally unsound. In fact, it successfully fended off a lawsuit from neighbors brought under CEQA that went all the way to the California Supreme Court.

The developers won, but by the time they got that court victory in January, they had dropped from financial exhaustion. A notice of default had been filed on the project last summer. So, opponents really won. They killed it with CEQA.

Had it not been for that lawsuit, probably by now the building would be up, complete with condos aimed at middle-class workers, creative offices, retail space and even a little park. Instead, we’ve got the boarded-up, abandoned restaurant that’ll sit there for God knows how many years.

If you operate a medium or smaller business, you might be feeling left behind.

Your business may be muddling along while the economy is racing ahead. At least, there’s all that news about how businesses are doing so much better. You’d think we are all on some Alpine climb, what with the constant references to how the economy is pulling itself up and getting its footing.

Just look at the stock markets. They’re rising. Even if you’re feeling down. Nasdaq has jumped 15 percent from a year ago.

And large companies? Well, the Business Roundtable just last week said its members – big-company CEOs – never felt better. In fact, business is so good that 52 percent of them expect to increase hiring soon. Good for them.

But you? Maybe not so much.

It’s a good thing I can type. It’s hard for me to talk, what with these broken teeth.

You see, I have to drive on L.A.’s roads. And if you drive a car in Los Angeles – or ride a bicycle or motorcycle – you also may have cracked teeth or a bitten, swollen tongue. That’s what happens when you hit a half-dozen potholes on the way to work.

Potholes? What am I saying? I mean, what am I typing? These are more like craters, trenches, cave openings. I’ll bet the streets of Benghazi are in better condition.

All the rainy weather we’ve had, combined with all the money the city of Los Angeles doesn’t have, means we’re left with the worst street conditions since, well, maybe since asphalt was pulled out of the La Brea Tar Pits and spread onto dirt roads.