When is the internet not the internet? When the City of Los Angeles sends you a tax bill big enough to choke your fiber optics.
The City, under Mayor Richard Riordan, lured hundreds of internet startups to LA ten years ago with a promised tax break. Some of those firms turned out pretty well, like Shopzilla.com, a shopping comparison site which now employs 220 people and, according to the LA Times, spends over half a million a year just on locally catered lunches for staff.
The City, in its panicked grasp for ready cash, decided to re-define the term “internet” and silently dropped tax bill bombs on several of these companies. Shopzilla’s past-due definition overhaul cost them $2.5 million in additional taxes. They’ll see the City in court.
Sounds to me like semantic suicide for a city struggling to keep jobs. Shopzilla’s CEO has made it perfectly clear that he and the other 219 people who work there can just skip down the street a few blocks to Santa Monica and keep that extra $2.5 million to finance even more jobs in their new home turf.
The ripple effect of this kind of cutesy deficit cutting only adds to the perception of the City of Angels as being strictly hell for business.
Los Angeles needs to stop eating its young. A deal’s a deal and a handshake should be more than one finger.