The Irvine City Council Tuesday night eliminated the city’s $51 business license fee, a move that members of the council’s Republican council majority tout as standing against over-taxation by the government.
The councilman who first proposed the dissolving the tax, Jeffrey Lalloway, declared it the “first time” he’s “ever heard of a city or government eliminating a tax.”
Council members voted 3-1 to undo the tax, with Mayor Steven Choi the only no vote. Councilwoman Beth Krom, who has expressed opposition to cutting the tax and is the only Democrat on council, was absent from the meeting.
Eliminating the business license fee is the latest move by the Republican council majority to steer Irvine in a more conservative direction after years of governing by a Democratic council majority.
Last month, the council repealed a living wage ordinance that requires city contractors with contracts valued at $100,000 or more to pay all their employees working in the county at a level that at least matches the lowest paid city employee.
Choi argued that slashing the business license fee would have a negligible effect on attracting businesses to Irvine while transferring a nearly $1 million burden — the amount that the business license fee raised last fiscal year – to city residents.
At the last meeting, Lalloway’s colleagues supported eliminating the tax but not the business database program it finances, saying that it benefits city officials to know who is setting up shop in town by allowing them to make sure the businesses comply with various laws. The program costs over $600,000 to maintain.
Lalloway said the decision is Irvine’s way of making a ”major statement” to other governments to look at slashing taxes rather than adding to a “massive taxation” system.
Lalloway said that Americans in the same tax bracket as retired professional basketball star Yao Ming likely pay more in taxes than the 50 percent of personal income Ming pays to the Chinese government.
“I would hope in some way this can motivate other cities, counties, states, to look at their own internal taxing systems, and try to make it easier for the middle class,” Lalloway said.