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Schwarzenegger's new tax plan, Meg Whitman's Sonny Bono defense, American Apparel's firings and more after the jump. Get Mark Lacter's morning headlines over at LA Biz Observed, and you can follow Mark and Kevin on Twitter.
- Gov. Schwarzenegger called a special session to consider his plan to overhaul the tax system: a new business tax replacing sales and corporate taxes, and a reduced income tax. LAT, AP, Bee, Dan Walters
- The preferred defense of Meg Whitman's non-voting by supporters appears to be that Sonny Bono didn't vote either. Politico, CalBuzz
- Attorney General Jerry Brown formed his exploratory committee to raise money for running for governor next year. LAT, Chronicle, Bee
- American Apparel's plans to fire 1,800 immigrant employees — more than a quarter of its work force — in lieu of workplace raids by the feds is called "devastating" by Mayor Antonio Villaraigosa. NYT
- California judges have granted 47 waivers in two years allowing paroled sex offenders to live in areas where children congregate. L.A. Daily Journal (subscribers only)
Also LADJ: Offer rates [not salaries -ed.] for first-year associates have fallen an average of 15% at major law firms. - The LAPD has started campaigning at City Hall and in the media for the money to staff its new detention center, threatening that the old jail may have to stay open instead. Meanwhile, new Councilman Paul Koretz took on the mayor's goal of 10,000 cops, saying "I think having 10,000 officers is unsustainable for the city." LAT, DN
- Burbank's mayor says the FBI and sheriff's office are investigating allegations at the city's police department, sued by seven current or former officers. Burbank Leader
- The Board of Supervisors shut down five more commissions it deemed unnecessary. DN
- Homeless activists briefly shut down yesterday's City Council meeting by shouting and demonstrating. LAT
- ProPublica is hiring two investigative reporters in New York and a full-time blogger. Release
- Thomas Curwen explores why the pavement on the Long Beach Freeway is getting smoother and quieter, and finds that it's a $650 million fix. LAT
- Examiner.com, Philip Anschutz's network of localized websites, grew faster in August from the same month of 2008 than any of the other top 30 Internet news sites in the nation, says Nielsen Online. Denver Business Journal
- Google is inviting 100,000 developers to test Google Wave, a new product that the Internet giant hopes will transform how people communicate online. SJ Mercury
- Music videos from Warner Music will return to YouTube in the coming months after a nine-month dispute over splitting advertising revenue. Yahoo
- Jacob Bernstein has left WWD for the Daily Beast, and other Conde Nast employees are jumping in advance of expect layoffs across the company. Keith J. Kelly./NY Post