Skip to content

Author archive for: vicviereck

About Me

Victor N Viereck’s Biography

As a second generation resident of Los Angeles, Vic was born and raised in Los Angeles. He graduated from Los Angeles High School and the University of Southern California. As a teenager Vic was a member of, and became Master Counselor of Pioneer Chapter Order of DeMolay, which he followed up with membership in Los Angeles Lodge of Free and Accepted Masons. Vic is still a member. At USC he was a member of Zeta Beta Tau Fraternity.

He has been a Certified Public Accountant since 1966. Even though he worked for LAUSD in accounting for 26 years, he continued his tax practice during and after. For 10 of the last 11 years he was Head Accountant in the Cafeteria Accounting Section.

Since 1992, Vic Viereck has volunteered at the Southland Regional Association of Realtors where he serves on the Professional Standards Committee, and has served on the Grievance and Government Affairs Committees (still a member). He served on the North Hollywood Project Area Committee for the North Hollywood Community Redevel-opment Agency, is an active member of the Valley Industry and Commerce Association, the Universal City North Hollywood Chamber of Commerce, Greater Valley Glen Neighborhood Council (as its first Treasurer, until February 2006, and again starting in July 2008 until 2010), and the Valley Alliance of Neighborhood Councils. In July 2003, Vic was elected as Chairman of the UCNH Chamber of Commerce Government Affairs Committee, and was President of the Chamber’s Board of Directors from January 1, 2008 through December 31, 2009.

As of January 1, 2011 he is again President of the chamber until December 31, 2011. Vic’s involvement with the UCNH Chamber has also evolved into his being on the Board of Directors of the United Chambers of Commerce as a co-chair of their Government Affairs Committee. On the North Hollywood Project Area Committee he actively sought to make the extravagant Community Redevelopment Agency accountable to the public. He was also the President of the Kiwanis Club in North Hollywood from October 1, 2004 through September 30, 2005, and is now a member of the Entertainment Industry Group Kiwanis Club in Studio City. As an active member of the Los Angeles Affordable Housing Crisis Task Force Vic Viereck opposed the majority’s recommendation of an additional $95 million of taxes annually. He wrote the task force’s minority report, which is in the Appendix of the resulting report “In Short Supply”. In October 2009 he was recruited onto the Board of Directors of the Mid-Valley Family YMCA.

Being the son and grandson of apartment owners, Vic purchased apartments on his own. After 43 years of owning those apartments, he is still personally involved in their management.

Nominated by the Apartment Association of Greater Los Angeles, Vic was one of three apartment owner representatives on the City of Los Angeles seven-member Citizens Oversight Committee regarding the study of the Rent Stabilization Ordinance. Through the Greater Valley Glen Council, in 2009, he was appointed to the South (San Fernando) Valley Budget Committee for 2009, and elected from there to the Mayor’s Regional (Neighborhood Council) Budget Committee for a year.
Being concerned about the lack of services and personnel committed to the Valley (compared to taxes collected in the Valley), he successfully ran for a city council seat in the Valley’s unsuccessful attempt to become independent. That has led to his commitment as Treasurer of Valley VOTE since about 2003.

Vic is truly committed to the well being of his community, city, state, and country.

Real Cause of Economic Woes

Daily News 9/30/10

Re “Obama blasts GOP ‘Pledge’ as echo of ‘failed policy’” (Sept 26):

President Obama is rhetorically redundant about not extending the tax cuts for the rich and so-called failed policies of the previous administration. But he fails to recognize historical facts. The reduction of tax rates on capital gains and dividends in 2003 resulted in more than $780 billion of additional tax revenue from that source from 2003 through 2007.

The real failed policy, though, was his, Senator Dodd’s, and Congressman Barney Frank’s. They pressured lenders (particularly Fannie Mae and Freddie Mac) to make home loans that borrowers could not afford. That process was at the foundation of the economic collapse.

Rental Property Issues

September 12, 2011

Ms. Anna Ortega, Director

Rent Stabilization Division
Los Angeles Housing Department
1200 West 7th Street, 8th Floor
Los Angeles, CA 90017
Fax (213) 808-8818

Dear Ms. Ortega,

Thank you for responding to my article in the August Apartment Age magazine. There are certainly problems with the Rent Stabilization Ordinance, and the differences of opinion regarding those problems. Communicating about them is one of the best ways to help solve some of the problems.

While I can certainly understand the tenants’ dislike of permanent pass through of 100% of improvement costs, providing rental housing is a business. Owners of businesses, whether housing, restaurants, supermarkets, etc, business owners need to be able to more than cover 100% of their costs to stay in business, and attract other investors into their businesses, particularly for future housing needs. Although the permanent 100% increase may have been excessive, the changes made in 1989 were extreme in the opposite direction. Even though a sixth year was added to supposedly cover interest cost, the combined reimbursement to owners, over at least six years, represents a 40% loss on the investment. It’s difficult for me to understand how apartment owner representatives agreed to the grossness of the change. People in such positions need to understand the market effect of changes they make. Regardless of a relatively few people establishing a policy, investors and other members of the public are going to make their decisions based on their perception and experience of the effect of regulations. A comment of mine was about the complete and utter failure related to the relatively negligible number of applications filed by apartment owners, not the percent of applications that were approved. If you compare the number of applications filed annually with the number of rental properties, or particularly the number of rental units, it’s less than 5%. There may be a lot of smaller valued improvements made for which the owners do not even bother to increase rents, especially in today’s economy.

But the more expensive improvements require funding which is much more complex. Even if an owner has the resources, they consider whether the cost of the improvement is worth it to them. Immediately losing 40% of their investment weighs heavily on that decision.

My experience with capital improvement applications is that applications for smaller amounts do meet the 45 day guideline. But more complicated applications, with much higher improvement costs, took well over the 45 days (as I recall, over three months). But that was over five years ago.

One was originally rejected, but approved on appeal. I even had approvals for increases that, due to market rents on some of the units, I could not (and did not) take advantage of the whole increase allowed. In the current market, when improvements have to be made, it is not wise to increase rents on more recent tenants. That difficulty makes it even more necessary to have long term tenants at least pay for the cost of improvements on their own apartments.

Having simultaneously been an apartment owner and a Certified Public Accountant for over 43 years, I have had a great depth of experience in apartment ownership. With that amount of experience, I feel I could be quite helpful to the city in helping to establish workable policies, and would be glad to do it. As you know, I was one of the seven members of the Citizens Oversight Committee regarding the study of the Rent Stabilization Ordinance.

 

Tax Cut Will Financially Intoxicate

Re “Obama double down on payroll tax cutback” (Sept 9):

It appears that the reason President Obama wants to reduce the Social Security tax rate to 3.1% (supposedly try to create jobs) rather than reduce wage earners income tax, is that his (and prior) tax credits have already resulted in 51% of low income earners not paying any income tax. Many receive :”refundable credits” for more than any taxes they would otherwise owe. But his plan to financially intoxicate people by reducing the FICA tax for one year would further defund the already bankrupt Social Security program. The plan would make Bernie Madoff and Charles Ponzi jealous.
Repeal of the Obamacare program would provide the needed motivation to substantially reduce unemployment while reducing the deficit.

 

HIGH INCOME EARNERS BUFFETED!

August 16, 2011

1. The Daily News printed in today’s edition a comment column by Warren Buffet. It included several misleading statements.

2. He tried to make the point that the “mega-rich” pay income tax at 15% on most of their earnings, but practically nothing in payroll taxes. He did not indicate any approximate breakdown between dividends, capital gains, and salary that resulted in his 2010 income tax of $6,938,744, which was about 17.4% of his taxable income. Dividend income is taxed at 15% on corporate income that is left after a 35% corporate tax rate. That results in an effective tax rate of 44.75% on those earnings. Some (a relatively few) on Wall Street, if their speculations payoff, get a special “carried-interest” rate of 15% on such gains. For some gains on stock futures (details need to be known) there’s also a 15% tax rate on 60% of the gains.

3. He conveniently lumped his talk about tax rates for the 1980s and 1990s together. That overlooked the substantial reductions authorized in the 1986 Tax Reform Act, which was primarily responsible for the 40 million jobs he mentioned were added during that period.

4. He claims that the “mega-rich” pay practically nothing in payroll taxes. But payroll taxes are based on a limited amount of earned income. For 2011 the limit is $106,800.00. Supposedly recipients of Social Security are paid based on what they, and their employers, pay into the fund. So the “mega-rich” receive no more benefit out of Social Security than anybody else. For a married couple filing jointly, up to $32,000 of Social Security is tax free. The Standard Deduction and Personal Exemption increase the tax exempt amount. Depending on how much income is received from other sources, up to 85% of the Social security income becomes taxable. That’s progressive tax rates in action.

5. He said he knows many “mega-rich” philanthropists who are very decent people, who wouldn’t mind being told to pay more taxes as well. The question is, depending on how much additional tax, what effect would that have on the amount of charitable donations they would make to needy organizations.

What I found to be very conclusive and telling was his comparing the 1992 income tax paid on taxable income for the 400 largest income earners and the 2008 income tax paid by that year’s 400 largest income earners. Mr. Buffett said that the group’s 1992 taxable income of $16.9 billion was taxed at 29.2% while the 2008 group’s taxable income of $90.9 billion was taxed at only 21.5%. But he failed to say that the $90.9 billion at 21.5% generated $19.54 billion in taxes compared to $4.935 billion generated by the $16.9 billion in taxable income. In fact, the 2008 tax rates generated more actual tax revenue than the amount of taxable income generated by the 1992 tax rates. It looks like he made the case for lower tax rates.

Not Meeting Anyone’s Needs

Published in the August 14, 2011 Daily News:

Considering the large and continuing federal budget deficit agreed upon in the debt limit increase, it would have been even more surprising if there was no credit downgrade. If the current trillion dollar-plus annual deficit habit continues, before long there will be no funds for social security, health care, or national defense. All the revenue would have to be used to pay the interest on the debt. Then nobody’s needs are met.

Not “Trickle Down”, But a Waterfall.

July 17, 2011

Spending programs have been tried, but failed to achieve the stated goals. The public is apprehensive about their economic future. In general, businesses at all levels have no motivation to invest in more assets or personnel. Loans to people who could not afford them led to the current economic problems. Making loans readily available to businesses without providing motivation, and depriving them of the capital with which to make responsible down payments for the loans will achieve nothing good. Allowing the Bush Tax Cuts (particularly the so called “Tax Cuts for the Rich.”) to expire confiscates capital needed for growth.

Extending, or preferably making the Bush Tax Cuts “for the rich” permanent would be most effective in motivating business, while allowing businesses to have the capital for at least making down payments on plant and equipment (or whatever assets are needed for growth of their businesses). Job creators need confidence to invest in businesses that create employment. The claim that allowing such tax cuts to continue would cost the government more than a trillion dollars over the next ten years is bogus when compared to the history of tax cuts and tax increases. After tax rates on dividends (already double taxed) and capital gains were cut in 2003, total federal tax revenue increased by $743 billion from 2003 to 2007. The combined income tax rate of 15% on the after taxed (at 35%) corporate income results in an effective 44.75% tax rate on dividends. The U. S. Treasury receipts from capital gains climbed to an estimated $117.8 billion in 2006 from $49 billion in 2002. Changes in tax rates have short and long term influence on how people make business decisions. When people know they can personally decide how to handle their earnings, rather than losing them to the government, it benefits the economy. When real estate investments are made (and sold), compensation is generated for Realtors, appraisers, title companies, lenders, and escrow companies, etc. Securities investments and sales similarly generate more compensated work for brokers and others. Spending of their taxable earnings benefits their communities. The so called “trickle down” is more of a waterfall.

While Congressmen and Congresswomen may subsequently say something like “we overestimated the tax revenue from expiration of the tax cuts,” you are being forewarned of reality. But the public would suffer long term from such a mistake. For the benefit of all income levels, in more ways than one, the Bush Tax Cuts on dividends and capital gains need to be made permanent.

Equality of Poverty

Daily News 6/6/11

Re: “Sacrificing too much for rich” (Letters, May 31):

Before complaining about “sacrificing too much just to make rich people richer,” the writer should learn historical facts. In 2006, the top 1 percent of income earners paid 35% of our country’s income taxs. As of last year, 51% of income earners pay no income tax. The national economy does much better when people are motivated to get rich than when government invokes equality of income policies.

Solid Waste Franchise Proposal

City of Los Angeles

Board of Sanitation
City Hall, Room 1010
200 North Spring Street
Los Angeles, CA 90012

The City of Los Angeles Bureau of Sanitation is proposing to eliminate competition between the existing 104 commercial waste haulers who service businesses and apartments in Los Angeles. The proposal is to create a franchise system that will supposedly bring the city millions of dollars of new revenue.

The proposal would create 5 to 6 “waste shed” areas around the city. Private waste haulers would be invited to submit proposals for servicing the waste sheds.

Two or three haulers would be selected to service each area. They would be the only operators allowed to do business in the areas assigned. Their costs would be determined through negotiations with the city. Those selected would have to pay a franchise fee for the privilege of having a contract.

Since the City of Los Angeles is known for its anti-business attitude, such a policy would be an added nail in the city’s anti-business reputation. The proposal would likely cost more in lost tax revenues than would be extracted from its victims. Apartment tenants would also have to be taught and motivated into recycling their trash.

The Solid Waste Franchise Proposal would substantially reduce competition that reduces fees, and could result in a net reduction of overall fee and tax revenue.

It could easily reduce operating efficiencies, is likely to create corruption, and would be likely to create friction between tenants and apartment owners. Tenants whose trash is currently collected by Department of Sanitation trucks are already complaining about the department’s $48.xx solid waste charge on every DWP bill.

That amount significantly exceeds the charge by private waste haulers. In order to prevent the loss of revenue producing businesses, and keep apartment costs from escalating even faster, the Solid Waste Franchise Proposal should be scrapped, and apartment owners with city sanitation service should again be allowed to switch from city rubbish hauling.

General Tax Information

The manner in which income tax information is accumulated and presented to your tax preparer can result in substantial savings, even if you are your own tax preparer. More, substantiated expenses are one factor. Another is to know and properly report all of your income so there are no subsequent penalties for failure to report. Use of various brands of software can make that task much easier, efficient, and productive than manually accumulating the data.

Any tax payer who claims auto expense on their tax return is required to maintain a written record of miles driven for business. Unless the allowed standard mileage rate is used, a record of all auto costs is needed. Failure to maintain and have available the mileage record can result in loss of the auto expense deduction, penalties, and interest.

Although the additional Form 1099 reporting requirements included in President Obama’s Health Care Act have been officially repealed, those requirements existing prior to that legislation are still in effect. If you pay an unincorporated individual $600 or more in a year for services rendered to your business (including for rental properties), you need to report it to the Internal Revenue Service. That includes gardeners, painters, cleaning services, and other handymen.

If you have a business that sells merchandise, it would help to keep a record of the year- end inventory. If you have an investment securities account, your year-end broker’s statements (Form 1099) may include reporting of proceeds from security sales as of certain dates within the respective tax year. In that case, you need to have and provide the cost of each item sold, and the acquisition dates.

Unlike salaried income, business and/or investment income can result in taxable income against which there is no withholdings of taxes from your income. Under such circumstances, it is advisable to pay estimated tax quarterly to prevent interest and penalties on the underpayment. Close attention to that matter can prevent substantial over or underpayment during the year.

For dependants claimed on your tax return, it is necessary to provide their names, Social Security numbers, and birth dates.

For clarification on the above and other tax questions it’s best to ask your Certified Public Accountant.