Taxes are like “Crack” for Government

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I have to admit that when the State of California raised the tax on cigarettes, I thought, hey I’m not a smoker, what do I care? It means they are not coming after me for more money to give public employee unions. Then when the State went after alcohol, beer and wine, I thought the same thing.

Hey, the State of California government is like a drug addict–once you give them a few taxes, they keep coming back for more. Taxes are like Crack for government! Government cannot tax in moderation.

Then the State raised the Vehicle License Fee. I like cars and own too many, and everyone that owned a car had to pay. Then I got pissed.  But it was too late, nobody else was pissed.  Everyone had been paying all along and this wasn’t new to them and they weren’t affected that much.

The Dock Tax

That is the way that it is with the Dock Tax. Most people don’t own a dock in Newport Beach, and most people think that the people that own the docks are rich enough to pay the tax, so who cares. Besides, the City Council says the money is going to fund the harbor improvements and that benefits the dock owners anyway, so what is the big deal?

Well, the City made a deal with property owners a long time ago. The property owners were given permission to build a dock in front of their homes. It was their dock, they built it, and they paid for its maintenance. The docks increased the values of their homes and the property taxes went up and the city got 17 percent of that tax. Commerce and activity resulted in all the boat ownership and usage (which is all taxed as well). So basically it was a win-win for the owners and the city.

Real Damages to Property Values

Last year the city decided that the docks were there on state Tidelands which are operated by the City. They decided that they were not receiving rent for this very valuable land, so the city decided that the land is a leasehold interest and that the docks were there by permission of the city and if you didn’t pay “rent,” you can lose your dock.

So on Balboa Island earlier this year, a resident decided to sell his property, including his dock. When the buyer reviewed the “Dock Tax Permit,” and saw that the dock was a land lease and not owned by the homeowner, they reduced the offer on the property by $800,000. This may be an isolated incidence, but it has now come as an actual market based reflection on the change in ownership of the docks to the city.

This has a real downstream impact to the neighbors as well. Now that home on the water is worth less, and that may affect neighboring home values as well.

Another Opportunity to tell the Council What you Think

The city is sponsoring a couple of public hearings on the Dock Tax as they promised they would. One occurred Thursday this week, and the other will occur next Wednesday, August 21, from 6 to 8 p.m. at the Oasis Senior Center in Corona Del Mar. Come out and let the council know that you don’t support taxes.

The city has an opportunity to admit its mistake and reverse their decision and revoke the Dock Tax based on some of the negative, real world implications that are becoming known. I am an optimist, I know, but I don’t think this issue is going away, and I think this council can step up and make this course correction.

 Scott Peotter is an Architect and former Planning Commissioner in Newport Beach.  Scott can be reached at [email protected]

 

 

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2 COMMENTS

  1. Scott, one thing I learned many years ago, I don’t care who is getting taxed on items I don’t purchase or have, I don’t want them taxed any more. I know soon something I have or want to buy will be heavily taxed. We should all be supporting each other and oppose new or increased taxes.

    But you’re right Scott. Taxes are like crack to the government. I looked up that cigarette taxes bring in over $25M each year (per 2010 data) in both state and federal taxes. Taxes and taxes collected on smokes have sky rocketed even though cigarette sales are half what they used to be in 1980. Once the government outlaws cigarettes (and they will, it’s coming), where will that $25M come from? Ya think they’ll just forget about it? Nope, it’ll be another or increased tax somewhere else to make up for the loss.