Newsletter

California Inc.: GOP unity to be tested as lawmakers weigh in on tax plan

Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section.

I'm Business columnist David Lazarus, and here's a rundown of upcoming stories this week and the highlights of last week.

Wall Street gets back to business Monday with some good news in the rearview mirror. U.S. employment snapped back last month after hurricanes Harvey and Irma depressed payrolls in September. The job growth of 261,000 was less than the 310,000 or so analysts were expecting, but the September payroll change was revised higher — from a loss of 33,000 jobs initially reported to a small gain of 18,000. The nation’s jobless rate fell a notch further to a 17-year low of 4.1%.

LOOKING AHEAD

Taxes: The rewrite of U.S. tax law proposed by Republican lawmakers will go before the House Ways and Means Committee for debate starting Monday. The multi-day “markup” of the bill will give committee members a chance to propose revisions or offer alternatives. The proposal launches a grueling legislative process that will test GOP unity in coming weeks as the party struggles to deliver on one of President Trump’s top priorities.

Fire and water: The state Board of Food and Agriculture meets Tuesday to discuss assistance to the burned area of the wine region, and how to move forward with a $17-billion plan to build two delta water tunnels. The proposal is in jeopardy after major water agencies declined to invest and the federal government indicated it may not pony up more money. The public meeting begins at 10 a.m. in Sacramento.

Pay raise: Compton residents will vote Tuesday on whether to give city officials a raise. If approved, City Council members would be eligible to be paid the median household income of Compton, which is $43,507 a year. Currently, council members and the mayor are paid a salary of $600 a month, or $7,200 a year. The mayor's salary would be 25% higher than the council, or $54,384.

Earnings releases: Snap Inc., the Venice-based maker of the social media app Snapchat, will release its results Tuesday for only the second time since it went public in March. On Wednesday, 21st Century Fox reveals its quarterly numbers, with investors curious about the status of the New York company’s bid to buy outstanding shares of satellite TV service Sky that Fox presently does not own. Burbank-based Walt Disney Co. releases earnings on Thursday.

Film Festival: The 31st edition of AFI Fest, one of the year's major film events in Los Angeles, will open with Dee Rees' “Mudbound," on Thursday at the TCL Chinese Theatre in Hollywood. The film is an adaption of Hillary Jordan's celebrated novel dealing with prejudice in the Mississippi Delta post-World War II. The festival will run through Nov. 16, when it will close with a showing of Ridley Scott’s “All the Money in the World,” about the kidnapping of John Paul Getty III.

THE AGENDA

Monday’s Business section takes an aspirin and looks at holiday travel headaches, which can start weeks in advance with the hunt for flights. Which tickets guarantee a family with small kids can sit together? How many checked bags — and bag fees — will be needed to make sure gifts make it under the tree? Complicating the hunt for airline tickets this year are the added options travelers face when booking seats, including a wider availability of no-frills basic economy fares and bundles of extras that can be purchased for additional fees.

STORY LINES

Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:

Tax reform: The sweeping House GOP plan proposed a dizzying number of changes to the tax code. It would dramatically lower the cap on widely used mortgage interest deductions to newly issued loans totaling no more than $500,000. It eliminates the electric car subsidy and the ability to deduct student loan interest. Columnist Michael Hiltzik says the tax plan is filled with “petty cruelties” aimed at the middle class. And that’s just for starters.

Fed chief: President Trump’s choice for the next Federal Reserve chief, Jerome H. Powell, probably will face an immediate test as stronger economic growth exerts greater pressure on the central bank to step up the pace of interest rate hikes. Trump has said he wants interest rates to stay low, and that presumably was an important consideration in the president’s decision to replace Janet L. Yellen with Powell, a Fed governor since 2012 who has closely aligned himself with cautious policy moves

Electric cars: Tesla said multiple issues are hampering production of its Model 3 electric sedan. The company is facing serious problems not only at its Fremont, Calif., assembly plant, but also at the Gigafactory, the battery plant in Nevada that supplies the battery packs that drive the Model 3. Tesla announced that it was pushing back its goal of producing 5,000 Model 3s per week from the end of this year to the end of March.

Harassment charges: Warner Bros. is severing ties with embattled filmmaker Brett Ratner after six women publicly accused him of sexual harassment and misconduct. A person with knowledge of the matter said the Burbank studio will not renew its production deal with Ratner, and the fate of his company’s $450-million co-financing agreement beyond 2018 is unclear. Meanwhile, New York police said they were gathering evidence to possibly arrest disgraced producer Harvey Weinstein on rape charges.

Landmark sold: The bustling Grand Central Market, one of Los Angeles’ best-known landmarks, has been sold to a Beverly Hills real estate investor who vows to preserve its historic charms. The sale included the 12-story Million Dollar Theater tower, home to the first movie palace opened by entrepreneur Sid Grauman, who went on to create the famous Chinese and Egyptian theaters in Hollywood.

WHAT WE’RE READING

And some recent stories from other publications that caught our eye:

Oops: In Wired, Mark Frauenfelder describes his panic over seemingly losing $30,000 worth of bitcoins — because house cleaners threw out a piece of paper with the code he needed to unlock his account. “I couldn’t escape the fact that the only thing keeping me from a small fortune was a simple number, one that I used to recall without effort and was now hidden in my brain, impervious to hypnotism, meditation and self-scolding.”

Reviews blocked: The travel website TripAdvisor removed numerous reviews of Mexican resorts that included accounts of rapes and injuries, reports the Milwaukee Journal Sentinel. “More than a dozen travelers from across the country have said TripAdvisor muzzled their first-hand stories of blackouts, rapes and other ways they were injured while vacationing in Mexico.” TripAdvisor said the posts were considered “inappropriate” or not “family friendly.”

On the go: A surge in global exploration by young Chinese is reshaping the travel and tourism industry, Bloomberg BusinessWeek reports. “Venturing far beyond traditional destinations such as Hong Kong and Macau, younger Chinese sand-surf in Dubai, snowmobile in Finland and sample U.S. nightlife.”

Virtual money: The internet’s latest menace is hackers who try to hijack your computer to “mine” cryptocurrency, Fortune reports. Security experts say they are increasingly finding cases of cryptominer software surreptitiously using others’ computers. “Industry watchers have speculated that hackers may have been at work in some instances, planting the crypto code on popular sites and forcing people’s machines to generate virtual currency for them.”

SPARE CHANGE

The GOP tax plan prompts musing on the best songs about government levies. The Beatles, of course, quickly come to mind. But let’s not overlook contributions from ABBA, Cheap Trick and the Kinks. Plus a down-home spin from Johnny Paycheck.

For the latest money news, go to www.latimes.com/business. Mad props to Scott J. Wilson for helping put this thing together.

Until next time, I'll see you in the Business section.

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