by | ARTICLES, BLOG, ECONOMY, EDUCATION, HYPOCRISY, NEW YORK
I was disgusted to read Jamie Dimon’s new initiative, the “New York Jobs CEO Council,” not because I oppose gainful employment for New Yorkers, but because Dimon completely gives a free pass to the New York education system with this program. He misses an opportunity – and ignores his responsibility – to help improve a clearly broken system.
Dimon spends most of his op-ed talking about “skills-based hiring and matching,” but completely ignores the elephant in the room: New York’s education system is failing our kids. He describes how, “The council will create sustained pathways for opportunities in the city, better aligning educational programs with skills that employers need as the demands of the labor market rapidly evolve. This will alleviate unemployment—filling currently open jobs through skills training and empowering communities for the jobs of the future.” Quite frankly, this is PR-speak nonsense. New Yorkers are bereft of a decent education system, which is strangled by public school unions, and exacerbated by the fact that Mayor de Blasio is abusively hostile to charter and religious schools, even though those schools consistently outperform public schools — especially among black and Hispanic students.
If Dimon really wanted to make a difference, he would blast de Blasio on the sub-standard New York education system, but instead, he’s joining forces with him. This is an embarrassment, a detriment of rank-and-file New Yorkers. You would think Dimon would be smart enough to know that he’s in bed with New York politicians and playing politics with regular New Yorkers, but perhaps he thinks he can get away with being so political just because he’s the CEO and chairman of JPMorgan Chase.
by | ARTICLES, BLOG, ECONOMY, GOVERNMENT, NEW YORK, POLITICS
New York Governor Cuomo continues his crusade for a state bailout by claiming that New York is a “donor state” and therefore entitled to more federal funds. By this, he means that New York gives more in tax revenue to Washington than it gets back. However, the “donor state” mantra and his calculations making that claim are incorrect.
A recent article in the Wall Street Journal, “New York is No ‘Donor’ State,” did a thorough breakdown on how to calculate and account for federal funds in order to better understand the ebb and flow of dollars in and out of states. In this, it showed that New York really isn’t a donor state at all. It seems that various “donor state” claims tend to cling to a Rockefeller Institute report published in 2017 that erroneously calculated what states receive. For instance, it counted both food stamps and servicemen’s paychecks as federal subsidies when that’s clearly not the case. Likewise, it omitted the federal subsidization of municipal debt issuance and also didn’t account for the implicit socialization of their unfunded pensions and postemployment benefits. Thus, in reality, New York is one of several high-tax blue states that “are net ‘receivers’ of federal funds.” The aforementioned article is a definitely worthwhile read.
But even if the donor state claim were true to some degree, it’s still a weak argument for a bailout. Any notable imbalances occur for several reasons that Cuomo refuses to even consider. For instance, the federal tax code is very progressive and New Yorkers have high incomes. Likewise, New York receives relatively less money in the form of federal contracts and federal employee wages. This is logically caused by the fact that New York has made itself such a terrible place to do business (including sky-high costs and ridiculously burdensome regulation and taxes) that it can’t compete for these projects. Furthermore, the flow of New York taxpayer money to Washington and back has virtually nothing to do with why the New York government can’t balance its budget due to overspending. The government is not the taxpayer. The states send no money to Washington – their earners do.
In other words, it’s not that the government is being shortchanged. The state government isn’t hurt by this at all. The taxpayers of New York are the ones hurt by perennial fiscal mismanagement and it is a sham to request a bailout under the guise of being a donor state.
by | ARTICLES, BLOG, GOVERNMENT, NEW YORK, POLITICS, TAXES
New York’s state budget director, Robert F. Mujica, Jr., wrote an anemic, laughable Letter to the Editor (printed in the Wall Street Journal) trying to defend New York’s fiscal record in an effort to get a federal bailout. Those of us who live in New York couldn’t help but notice it was full of half-truths. For instance, Mr. Mujica boasted lowering income-tax rates, but neglected to include the fact that Florida doesn’t even have an income tax yet still manages to operate on a budget of $93 million vs NY’s $177 million — in a state with 2 million more people!
Furthermore, he talks about a 20% increase of private-sector jobs, but leaves out the fact that “private job growth in Florida has been about 60% higher than in New York from Jan 2010 to Jan 2020.”
Likewise, he claims that New Yorkers send $29 billion more in taxes to the federal government than it gets back, but fails to mention that the reason for this is New York’s tax code punishes high income earners by adding extra taxes, so much that some earners pay nearly 50% of their earnings in taxes! Nor does he mention that many wealthy New Yorkers have wised up to being fleeced over the last decade, making New York one of the top ten out-migration states in order for earners to try to keep their own income — some going to Florida, no less. This loss undoubtedly contributes to the $6 billion budget shortfall that existed before Coronavirus even hit, something that was also conveniently left out of his defense.
Finally, Mr. Mujica tries to suggest that the $29 billion New Yorkers send to the federal government somehow subsidizes Florida’s budget because Florida receives $30 billion more from the federal government than Floridians send. But he leaves out the fact that New York’s budget contains 35.9% of federal money compared to Florida’s 32.8%. With a budget of $177 billion, that’s $63 billion of spending from federal dollars compared to $30 billion in Florida. Who is more fiscally irresponsible?
If states like New York are not willing to take any of the economic risk going forward, they should not get any money. They have willfully chosen to engage in a prolonged economic lockdown in hopes that someone else pays for it. Florida was one of the last states to shut down and has begun opening up once again, understanding the need for economic recovery. If New York wants to continue to take the economic risk of staying closed while other localities choose to reopen, they should be the ones to pay for it.
by | ARTICLES, BLOG, BUSINESS, ECONOMY, NEW YORK, POLITICS, TAXES
In a continued tantrum against the “Tax Cuts and Jobs Act,” Governor Cuomo called the tax changes an “economic missile” as he unveiled his new budget proposal for the fiscal year. His solution? Raise more taxes mainly on businesses and restructure certain taxes so that New York gets its share of the pie.
One major change Cuomo has proposed is to eliminate the state income tax on wages for many New Yorkers; it would be replaced by a new payroll tax paid for by employers. This would be an disastrous burden for New York businesses who would conceivably have to cut wages in order to cover the cost of such a tax and deal with an excessive amount of increased paperwork.
Other ridiculous ideas include: a) a 2-cents-per-milligram tax on all opioids produced, paid for by the drug manufacturer; b) expanding the internet sales tax, a measure that has already failed twice; c) a 10-cents-per-milliliter tax on vapor products, paid for by the distributors; and d) a $120 “safety inspection fee” for motor coaches, ambulances, and other for-hire, for-profit cars that carry passengers subject to inspection by the DoT.
Just as egregious is Cuomo’s proposal to go after health insurers who stand to benefit from the tax reform bill. As some insurers could see up to a 40% reduction on their federal corporate taxes, Cuomo wants to pick their pockets by implementing a 14 percent surcharge on those gains in order to close the budget deficits.
For a governor who once emphasized his fiscal restraint, this budget shows how unhinged and out-of-touch with New Yorkers and New York businesses Cuomo has become.
by | ARTICLES, BLOG, BUSINESS, ECONOMY, GOVERNMENT, NEW YORK, POTUS, TAXES, TRUMP
Governor Cuomo has come out blasting the new tax law, and in particular the substantial reduction in the deduction for State and Local Taxes (“SALT”), as unconstitutional and an “attack only on blue states.”
But everybody who has any knowledge of taxation and its constitutionality knows that Cuomo’s assertion is ludicrous. The SALT deduction – and ALL deductions – are at the complete discretion of Congress. And as long as deductions apply under the same rules to every taxpayer no matter where situated, constitutionality can never be an issue All the Governor’s raving does is show that he and his entire staff are either totally clueless, or they know that their statements are total nonsense, but think so little of voters that they can be fired up with something that is utterly phony.
If Cuomo is concerned about what is devastating to New Yorkers, it is astounding that he is objecting to this law and yet he did not object to other tax issues in the past that clearly targeted his constituents. Despite acknowledging the very bad effects of high taxes on New Yorkers, Where was Cuomo’s concern when:
1) the federal government (Obama) raised taxes on capital gains by almost 60%?
2) the federal government raised the regular rate by 25%?
Furthermore:
1) Cuomo reneged on his campaign promises and kept income tax rates on New York’s high income earners outrageously high,
2) he continues to hide from his constituents that his tax law already denies New Yorkers some or all of their deduction for SALT.
3) he continues to hide that NY tax law also denies middle and high income earners significant parts of the charitable deduction as well, buried so deep that most New Yorkers are not even aware they are being fleeced.
4) as a final point, a New Yorker who dies leaving $10 million to his heirs would now pay no federal estate tax – but he would owe $1.06 million to New York State.
But now Cuomo is bothered by the elimination of the SALT deduction in New York? He was AFFIRMATIVELY IN FAVOR of all of these past provisions, which have been devastating to his constituents for some time. Cuomo’s sudden compassion is complete hypocrisy.
