July 2012.

Wu: Politics is getting in the way of business

wuBy Jack Wu

9:28 PM PDT, July 28, 2012

Ever since I wrote about Bob McCaffrey’s Stop the Dock Tax Political Action Committee, I have been pretty busy meeting with the different commercial docks owners (“Dock tax opponents form a strong PAC,” July 8).

While McCaffrey’s PAC deals primarily with the potential tax on residential docks, these commercial docks are under more imminent threat of getting taxed out of business, and only talked about taking the political route until now.

Enter the Coalition to Preserve Newport Harbor Political Action Committee, a PAC guided by a well-known and successful political consultant, representing the interests of the commercial marina owners.

For some reason these business owners don’t feel that a 20% tax on gross income is fair, with one owner saying, “I made 8% net profit, where in the world can I come up with 20% of gross [income] to pay a new tax?”

What is this new tax supposed to pay? Anything that relates to Newport Beach’s harbor, bay and beach gets paid out of the city’s tideland management budget, which gets its income from the different water-related fees.

The problem is that the city claims it has subsidized this budget by $15 million a year to cover its expenses.

wuBy Jack Wu

8:19 PM PDT, July 7, 2012

I’ve been hearing rumblings about this for years, and in the midst of the 2012 tax season, I started getting the telephone calls asking me to write about it. But because of timing of it, and the amount of research I needed to do on it, it kind of fell by the wayside.

However, I will never forget that first conversation I had with Newport Beach/UCLA basketball legend John Vallely. He said the city was looking into raising the “fees” (read: taxes) involved with owning a commercial dock. He then started throwing out numbers that in no way could be true: a 20% tax/fee on gross income, a 20% tax/fee if you sell or refinance your marina property, and a 4% tax/fee if you try to improve your property through capital improvements.

If you own a business, after paying your federal and state income taxes, your payroll taxes and your sales taxes, could you imagine if you also had to pay another 20% tax on your gross income, not to the federal government, not to the state, not to the county, but to your city?

How fast would you be taxed out of business?