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New York is one rough patch from bankruptcy

By Goran_K following x   2019 Mar 11, 8:38am 780 views   14 comments   watch   nsfw   quote     share    


https://www.newsmax.com/us/newyork-nyc-billdeblasio-economy/2019/03/10/id/906224/




"New York City could go bankrupt, absolutely," American Institute for Economic Research economist Peter C. Earle told the Post. "In that case, the city would get temporary protection from its creditors, but it would be very difficult for the city to take on new debt."

Already, New York state is ranked No. 1 nationwide in state and local tax burden, and the top 1 percent of New York City earners pay some 50 percent of Big Apple income tax revenue, per the Post. If businesses continue to flee to lower tax states while NYC spending increases, it could be doomsday, economists warn.

"The city is running a deficit and could be in a real difficult spot if we had a recession, or a further flight of individuals because of tax reform," Vested's chief economist Milton Ezrati told the post.



How does a state #1 in state and local tax burden run a deficit with a $2.9 billion shortfall?

Is it that leftist are simply wrong about taxation and prosperity?
1   6rdB   ignore (1)   2019 Mar 11, 9:32am   ↑ like (4)   ↓ dislike (0)   quote   flag        

Step 1. Create new bureaucracy which costs a lot.
Step 2. Budget shortfall.
Step 3. Raise taxes.
Step 4. People run away to Red State.
Step 5. People who ran from Blue to Red state bring their voting habits with them.
Step 6. Create new bureaucracy in formerly Red state....
2   theoakman   ignore (0)   2019 Mar 11, 10:04am   ↑ like (1)   ↓ dislike (0)   quote   flag        

They pay everyone through the roof. Makes them chasing Amazon out that much more humorous.
3   Goran_K   ignore (3)   2019 Mar 11, 10:34am   ↑ like (1)   ↓ dislike (0)   quote   flag        

theoakman says
They pay everyone through the roof. Makes them chasing Amazon out that much more humorous.


Seriously.

I wonder how many jobs, and how much tax revenue Amazon's presence would have impacted the New York budget. We're talking 25,000 direct jobs and 25,000 support jobs created.
4   zzyzzx   ignore (1)   2019 Mar 11, 10:41am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Goran_K says
I wonder how many jobs, and how much tax revenue Amazon's presence would have impacted the New York budget. We're talking 25,000 direct jobs and 25,000 support jobs created.


Here are some estimates:


5   Goran_K   ignore (3)   2019 Mar 11, 10:49am   ↑ like (3)   ↓ dislike (0)   quote   flag        

I think the 25,000 number is low.

All those employees would be spending money in New York, needing dry cleaning services, needing Uber rides, needing take out food, etc etc.

I think the impact is 25,000 direct jobs, and at least 10,000 - 25,000 in support jobs.
6   mell   ignore (2)   2019 Mar 11, 11:16am   ↑ like (1)   ↓ dislike (1)   quote   flag        

Maybe so but it also comes with more congestion and hipster doofus douchebaggery, plus it will drive out businesses that didn't get sweetheart tax deals. While it would have been nice it would only have helped NYC temporarily, at the root of the problem is the leftoid government, no amount of money from businesses is going to fix it, they will just devour it, spend it on corrupted pensions for officials and welfare for non-citizens and it will be gone instantly. Also they would do much better by focusing on real organic small businesses that are inherently American and not globalist. Those are businesses that can sustain a city's economy and make a positive impact on social cohesion.
7   Goran_K   ignore (3)   2019 Mar 11, 11:17am   ↑ like (2)   ↓ dislike (0)   quote   flag        

mell says
Also they would do much better by focusing on real organic small businesses that are inherently American and not globalist. Those are businesses that can sustain a city's economy and make a positive impact on social cohesion.



Those businesses got killed by #FightFor15 unfortunately.
8   mell   ignore (2)   2019 Mar 11, 11:20am   ↑ like (1)   ↓ dislike (0)   quote   flag        

Goran_K says
mell says
Also they would do much better by focusing on real organic small businesses that are inherently American and not globalist. Those are businesses that can sustain a city's economy and make a positive impact on social cohesion.



Those businesses got killed by #FightFor15 unfortunately.


yeah and the Obamacare mandate, probably the biggest small business killer.
9   anonymous   ignore (null)   2019 Mar 11, 11:47am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Goran_K says
Is it that leftist are simply wrong about taxation and prosperity?


'You Better Learn Our Lesson' - Kansas Republicans say they are worried that Congress and the Trump administration will repeat the mistake they made in enacting budget-busting tax cuts.

The regretful Republicans of Kansas have a message for the tax-cutting Republicans of Congress: Don’t follow our lead.

If states are, as Justice Louis Brandeis famously called them, the laboratories of democracy, then Kansas’s experiment in conservative tax reform set off an explosion of red ink. Steep cuts for businesses and individuals failed to produce a promised economic boom, and busted the state’s budget instead. Now, the GOP legislators that oversaw—and ultimately cancelled—that fiscal study are increasingly worried that Washington will ignore its central finding.

A tax-reform plan from the White House and Republican congressional leaders mirrors the structure of the legislation Kansas passed, and it’s been accompanied by the same confident assurances that it will “pay for itself” with economic growth. “That won’t work, so you better learn our lesson,” warned Kansas state Senator Barbara Bollier, a Republican who voted against the tax cuts originally and then fought to undo them earlier this year.

At the behest of conservative Governor Sam Brownback, Republican majorities in Kansas in 2012 set the state’s income tax on a “march to zero” and eliminated taxes on companies whose owners filed their taxes as individuals—a loophole exploited by thousands of businesses that resulted in plummeting revenue to the state’s coffers. Brownback, a former U.S. senator and presidential candidate, hailed the policy as “a real-live experiment” in conservative governance. But in the eyes of all but Brownback and his staunchest supporters, the test failed. Economic growth never materialized, and the state legislature could not summon the political will or overcome legal roadblocks to cut spending to match the lower revenue. With annual deficits in the hundreds of millions, Kansas has been mired in a perpetual budget crisis ever since.

“It was supposed to increase the GDP, and it didn’t. The feds will have that same problem,” said state Senator Jim Denning, a conservative who originally supported the tax cuts. In a phone interview, Denning told me he had done his own economic modeling in 2012 and “proved to myself that the tax cut would work.” But the new policy did not prevent a rural recession in Kansas or a dip in its oil-and-gas business. “It generated hardly any measurable economic activity,” Denning said. By the beginning of this year, he had changed course and voted along with Democrats and a coalition of Republicans to reverse most of the cuts, erasing Brownback’s economic legacy. (The governor won’t be in office much longer: He has accepted a diplomatic post in the Trump administration and will resign once he’s confirmed by the Senate.)

Bollier recalled that Republicans had first tried to offset the steep cuts in tax rates by eliminating deductions and exemptions in the Kansas code. But those proposals could not get through the legislature, exacerbating the resulting increase in the state’s budget gap. “You’ve got to have pay-fors. You can’t do it just by cutting taxes,” she concluded.

A similar debate is now playing out in Congress. Republican leaders, led by House Speaker Paul Ryan, wanted to raise as much as $1 trillion in revenue over a decade by instituting a border-adjustment tax, which would help pay for a reduction in tax rates for individuals and businesses. But conservatives rebelled, forcing Ryan to abandon the idea. The same fate could befall a proposal to raise more than $1 trillion by eliminating the state and local tax deduction, which is facing opposition from Republicans in high-tax states like New York, New Jersey, and California. Suggestions to pair tax cuts with reductions in spending on Medicare, Medicaid, and welfare programs are likely to go nowhere, too.

If Republicans in Washington can pass anything at all, it is likely to be a straight, temporary tax cut that adds to the deficit, which is easier for Congress to do because the federal government, unlike states, does not have to balance its budget. “That, to me, is a very poor decision,” Bollier said.

Kansas Republicans do credit the national GOP for proposing more modest tax cuts than they ultimately enacted. The congressional plan calls for a one-time reduction in income taxes, while Brownback signed a law that set automatic decreases with the ultimate goal of eliminating the state income tax entirely. Kansas’s slashing of the rate for so-called “pass-through” entities, designed to bolster hiring at mom-and-pop businesses, proved to be even more of a budget buster. Nearly 400,000 businesses took advantage of the exemption, reducing the state’s annual tax revenue by between $200 million and $300 million, according to the nonpartisan Tax Foundation.

Republicans in Congress want to cut taxes for pass-through entities, too, but not by nearly as much. They have proposed lowering the cap on those companies to 25 percent, compared with the current top rate of 39.6 percent. Denning said the federal plan looks “way more responsible” than what Kansas did in virtually eliminating taxes on many small businesses.

It is that distinction that members of the Kansas congressional delegation have cited in defending the GOP tax plan. “While some may try to compare this tax-reform framework to what was tried in Kansas, the truth is these two reforms could not be more different,” Representative Lynn Jenkins, who sits on the tax-writing Ways and Means Committee, said in a statement.

But the concerns of Kansas state legislators go beyond the pass-through policy. They worry that Republicans in Congress, including those in the state’s own delegation, are basing their tax overhaul on the same underlying assumptions about economic growth that have been articles of faith for the party since the Reagan era but turned out disastrously in Kansas. “This is designed to shrink government. It is not designed to grow business,” state Representative Stephanie Clayton told me. “I’ve seen it. It shrinks government. It doesn’t grow business.”

She alleged that Kansas’s representatives and senators in Washington had shown no interest in learning about the state’s experience and were simply following the orders of the Koch brothers, the powerful GOP donors headquartered in the state. “They don’t think anything’s wrong with it, but then again, none of them actually live in Kansas anymore, so what do they know?” Clayton said of the delegation. (None of the members of the Kansas congressional delegation I contacted were available for interviews about the tax plan.)

The Kansas experiment still has its defenders, and chief among them is Brownback, who encouraged President Trump to use his plan as a model and accepted its demise only after the GOP-controlled legislature overrode his veto in June. The Koch-backed Americans for Prosperity hasn’t wavered, either; the conservative advocacy group has attacked state legislators for raising taxes in Kansas and campaigned aggressively for tax cuts in Congress, even at the expense of spiking the deficit. But some of the most influential believers in the revenue-generating power of tax cuts are now in the Trump administration. “Not only will this tax plan pay for itself, but it will pay down debt,” Treasury Secretary Steven Mnuchin said last month.

When I relayed that argument to Bollier, she just laughed. “I can only say: Look at Kansas,” she replied.

https://www.theatlantic.com/politics/archive/2017/10/tax-trump-kansas/542532/
10   anonymous   ignore (null)   2019 Mar 11, 11:48am   ↑ like (0)   ↓ dislike (0)   quote   flag        

A Failed Experiment And A Republican Revolt In Kansas - Kansas lawmakers – Republicans – revolt and undo their own austere tax cuts. We’ll unpack what happened to the GOP’s “Kansas Experiment.”

The state of Kansas was supposed to be the great Republican model. Cut taxes deeply, said Governor Sam Brownback, and it would be “like a shot of adrenaline in the heart of the Kansas economy.” The taxes were cut. The adrenaline never showed. Things fell apart. Last week, Kansas Republicans revolted against their hardline governor, overrode his veto, and ditched the model. This hour On Point: The Kansas Republican revolt against supply side economics, and what it means. -- Tom Ashbrook

https://www.wbur.org/onpoint/2017/06/13/failed-experiment-republican-revolt-kansas
11   anonymous   ignore (null)   2019 Mar 11, 11:49am   ↑ like (0)   ↓ dislike (0)   quote   flag        

How many rough patches does the U.S. have left ?
12   anonymous   ignore (null)   2019 Mar 11, 11:53am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Kansas sees its own blue wave: ‘If you can flip it here, you can flip it anywhere’

The midterm elections did not see a blue wave powerful enough for Democrats to take the U.S. Senate, but in the traditionally conservative state of Kansas, Democrats had a surprisingly strong showing.

Kansas elected Democrat Laura Kelly as governor, beating out Kansas Secretary of State Kris Kobach with 48% of the vote to Kobach’s 43%, with 98% of districts reporting. Kelly ran as a moderate, while Kobach received national attention for his role at the head of President Donald Trump’s controversial commission to turn up evidence of voter fraud.

In a big upset, the state also elected Sharice Davids, who will be the first Native American woman and first lesbian elected to Congress from the state. Davids, a moderate liberal who was previously a professional mixed-martial-arts fighter, beat out Republican Rep. Kevin Yoder, who served four terms in Congress and voted for the tax cuts pushed by the Trump administration and the Republican attempt to repeal the Affordable Care Act.

Kansas, generally considered a solid red state, hasn’t voted for a Democrat for president since 1964.

https://www.marketwatch.com/story/kansas-sees-its-own-blue-wave-if-you-can-flip-it-here-you-can-flip-it-anywhere-2018-11-07
13   6rdB   ignore (1)   2019 Mar 11, 12:10pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Kakistocracy says
Sam Brownback

Brownback is a religious zealot, AFAIK. Serves people who elect such individuals well.

Kakistocracy says
Kansas, generally considered a solid red state, hasn’t voted for a Democrat for president since 1964.

If I recall correctly, they also have not had single party win gubernatorial election more than twice in a row since 1950's.
14   Goran_K   ignore (3)   2019 Mar 11, 1:12pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Kakistocracy says
A Failed Experiment And A Republican Revolt In Kansas


Kansas is the result of tax reduction but not spending reduction, you need both to really exemplify supply side economic theory (6% and some pension contribution increases is not enough). Not quite supply side economics at play there if we're being honest.

Also Kansas has never had a large diversified economy since the states inception in 1861.

New York is the 3rd largest state in the Union by GDP. It shouldn't be on the verge of bankruptcy.

Apples and orange comparison really.

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