MESSAGE FROM THE CHAIR OF THE BOARD
“Today knowledge has power. It controls access to opportunity and advancement”
It is my honor to serve as Chair of the Board for the Oxnard Chamber of Commerce. For 110 years, the Oxnard Chamber has served as a catalyst for business growth, as the convener for leaders and influencers, and the champion for stronger communities.
Our team, in concert with our nearly 500 members, works to promote the business and economic well-being of our diverse community to benefit enterprises, big and small, through advocacy, services and education, business exposure, and promotional opportunities. Our main objectives are to: represent the interest of business with government; encourage a strong local economy; promote the community; advocate political action and provide promotional opportunities and networking for our members.
One of my favorite programs offered by the Chamber is the Oxnard Leadership program. Growing local leaders to serve on boards, committees, and potentially serve as elected officials, is one of the most important tasks we as a community have. I’m proud of the high-quality leadership series our Chamber has developed and would encourage you to consider enrolling employees in this worthwhile program.
Participants in the Oxnard Leadership program receive a comprehensive overview of the Oxnard area – its realities, opportunities and challenges. Sessions move to various locations throughout the Oxnard area and provide students with a unique opportunity to meet key business and government leaders who play integral roles in the region by way of tours, panels, and speakers. Class speakers address, not only the facts, but also perspectives, challenges, and opportunities in highly interactive sessions. (For more information, please call 805-983-6118 or email email@example.com)
I would encourage you to reach out to me with any suggestions, questions or ideas you may have that would benefit our business community. I look forward to working with each of you in the months ahead.
As we all know, the President signed the sweeping tax reform bill ushering in a broad range of changes including new rules for income tax rates and deductions, college for savings incentives, estate planning and corporate taxes. These new rules are leaving folks scratching their heads and scrambling to find out what the most sweeping tax reform package in decades means and what actions to consider.
In my last article I wrote about the importance of passing on some of the benefits to increase employees’ salaries and 401K’s so I’ll continue in this article by saying that retirement savings incentives apparently will be unaffected. To get a clear understanding, everyone should consult with tax professionals to evaluate their personal circumstances and money management but financial advisers say the new rules do not call for changes to existing retirement savings incentives, preserving the favorable tax treatment and contribution limits to 401 (k)s and other retirement savings accounts.
Below are some key takeaways from tax reform bill:
Temporary increase in federal estate tax exemption
The law will roughly double the federal estate tax exemption to $11 million per person ($22 million per couple). That limit will be indexed to inflation, but would expire and revert back to current law after 2025.
Beneficiaries will still get a step up in basis, meaning there would be no capital gains tax due on inherited assets at the time of the transfer, and the cost basis - the value used to compute tax liability - would be reset to the price at that date.
It is important to note that state level estate tax exemptions are often much lower than the federal level and are unaffected by this law. In addition, the temporary nature of the higher limit means that if you have an estate plan, you should proceed carefully before making any changes.
While a further increase in the estate tax exemption will help some families avoid this tax at the federal level, it remains important for all households to have a current estate plan that helps ensure their wishes are carried out and reduces the cost of transferring assets as part of an estate.
New corporate tax rate and pass-through tax rate
Corporate tax rates will be cut to 21% beginning in this year. That tax cut is not scheduled to expire.
Pass-through businesses, businesses structured as sole proprietorships, partnerships, and S-corporations, will be taxed at individual tax rates, but will be able to deduct 20% of income. To prevent high-income individuals from taking advantage of this deduction, it would only be available to couples filing jointly with incomes below $315,000. For income above that level, the rules are complex but it appears that certain kinds of businesses might still be eligible for a partial deduction.
The plan would let businesses fully expense new equipment right away, but the provision would eventually expire.
The bottom line
There are a few things you may want to consider in light of the new legislation, and may want to consult with a tax professional about, so you can be prepared.
• Rethink your mortgages and deductions: If you have traditionally made charitable gifts or benefited from the mortgage interest or state and local tax deduction, you want to look at how the new standard deduction will impact you. If it no longer makes sense to deduct these expenses, you may want to rethink your mortgage or giving strategy. The imposition of a cap on state and local tax deductions may also impact where some people choose to live in retirement.
• Estate tax: Even in the absence of tax reform, it makes sense to periodically review your estate plan. If the estate tax limit changes are relevant to your plan, it may make even more sense to revisit your strategy. You may want to meet with your estate planning attorney.
• Small-business income: If you own a small business, you may want to reconsider how you structure your income and the form of your enterprise. Depending on the size and particulars of your business, you may want to consider the benefits of incorporation or the restructuring of pass-through organizations. Consult with an expert in small-business taxation.
• Timing corporate expenses: With new rules in place temporarily for expensing capital equipment purchases, business owners may want to review their capital expenditure plans.
I trust the Oxnard business community will find this information useful.
By Michael Wynn Song, Chair
Here’s wishing all of you a happy, healthy and prosperous new year. As the incoming Chair I will work with the Board of Directors and the CEO to accomplish the goals we set at our planning session last year. The Oxnard Chamber will continue to work tirelessly to protect our business climate and ensure our continued economic prosperity, to strengthen our leadership program and to enhance the quality of life for all in our wonderful city. We hope our local representatives will follow our suggestions for promoting legislation that focuses on the issues most critical to achieving those goals.
With the signature count complete a council recall is now slated for this spring, the saga of the current Oxnard City Council member recall and a district-based election drama continues. The Chamber has voiced our position on the recall and now we’ll have to wait and see how things pan out. Regardless of the outcome we will continue to work with the City Council and local leadership to enhance the business climate
I would be remiss if I didn’t mention the record-high stock market surges that have many investors cheering the corporate tax cut. Hopefully those tax cuts can also boost California worker’s wages to not only attract the best and brightest workers, but retain those workers in an ever-challenging California business climate. With the demise of pensions we need good wages and benefits to keep good workers. As part of Hyundai Glovis management, I am proud to say that we continue to evaluate and adjust our employees wages upward and provide good benefits such as dental, medical and vision insurance and a 401(k) plan with matching funds.
Stock market surges and corporate profits are good for business. Unemployment is going down but unless it equates to a better standard of living workers can’t be happy. California needs to prepare the workforce of tomorrow.
I don't mean to sound facetious but it's a safe bet to say that of the 55 million Americans that purportedly have a 401(k), not many are complaining about the stock market surges this past year. Nonetheless, healthy inequality is an issue; those who own equities and real assets get richer but most ordinary folks struggle to stay ahead. While the affluent are making boatloads of money, on the opposite end of the spectrum it's a totally different story. People don't mind falling behind when everybody else does. To give an extreme point of view, I don't know how many of the baby boomers are 401(k) participants but purportedly, less than half save less than $100K by retirement. To make an extreme point, this past year the average return on a million dollar 401(k) is about $170K. The percentage is the same but the baby boomer's return on his $100K 401(k) is $17K. The millionaire can support his family and live comfortably for well over a year on his plentiful return while the baby boomer can't even buy a Hyundai Sonata. Being proactive in your efforts to improve the standard of living for our workforce will ultimately help the Oxnard business community to prosper and grow.
This marks the last article I’ll write as Chair of the Board of Directors for the Oxnard Chamber of Commerce. This position has allowed me the great opportunity to focus on topics that I’m passionate about and express how they affect businesses and residents in our community.
As I reflect on this past year and get ready to hand the gavel over to my esteemed colleague, Michael Wynn Song, to take over as Chair, I encourage the Oxnard Community to consider the following points to help businesses and the future economy in Oxnard:
Thank you to Nancy Lindholm, President and CEO of the Chamber, and her staff for attentively responding to the needs of our members and continuously advocating on our behalf. I also appreciate the time, energy and financial contributions made by our Board of Directors. They are truly committed to the Oxnard community.
I’m honored to have served in this capacity this year and wish you all happy holidays and prosperous 2018.
Last month, in celebration of “National Energy Awareness Month,” representatives from California Resources Corporation, Aera Energy, Oxnard College, LULAC and El Concilio presented at a Ventura County Board of Supervisors’ meeting the “Moment of Inspiration” where a “Careers in Energy” program was highlighted that recently took place at Oxnard College.
We demonstrated first-hand how we are working with local private and public education, non-profits, governmental organizations, labor and others to introduce careers in the energy field. These careers run the gamut from engineers to geologists to helicopter pilots; all under the auspices of STEM which is science, technology, engineering and math curriculum.
By working together, we aim to equip our youth with the tools they need to become the leaders of tomorrow. By designing career programs with our neighbors, communities and the environment in mind, we hope STEM education will help guide them as they lead the Golden State in meeting our growing energy needs in an economically responsible and environmentally sustainable way.
Being socially conscious means recognizing the needs of our ethnically diverse communities. The opportunity to earn a solid paycheck without a four-year degree is being eliminated. However, one industry that is providing that much-needed economic mobility is the oil and gas industry. In fact, one-third of the industry’s workforce has a high school degree or less and an average annual wage of $84,000.
The oil and gas industry supports an all-of-the-above energy approach which means safely developing our energy resources to support everything we do at home, work and play. We believe in having a fact-based and balanced conversation about the critical role that energy – all forms of energy – plays in every aspect of our society, economy and daily lives.
“Careers in Energy” programs like this and other industry workforce opportunities focus to empower all our students in Ventura County.