New York State of Mind

Political Cartoons by Eric Allie

New Food Police alert : Slurpies are Evil!

New York City Mayor Michael Bloomberg is planning to ban the sale of large sugary drinks known to most Americans as big gulps and smaller drinks such as Snapples. Why the need for the ban? To save people from themselves combat obesity of course.

The proposed first-in-the-nation ban would impose a 16-ounce limit on the size of sweetened drinks sold at restaurants, movie theaters, sports venues and street carts. It would apply to bottled drinks as well as fountain sodas.

The ban, which could take effect as soon as March, wouldn’t apply to diet sodas, fruit juices, dairy-based drinks or alcoholic beverages.

Mayor Michael Bloomberg said Wednesday that he “thinks it’s what the public wants the mayor to do.”

Hmm….considering Diet soda has been shown to also cause people to gain weight and that fruit juice has just as much sugar as soda, this is clearly drink discrimination. But, there’s a loophole!

But there’s speculation that customers will just buy two 16-ounce bottles instead of one 20-ounce drink. (Townhall)

Maybe while getting a little weed and a little blow on the street you can get a black market 20 oz Mountain Dew!! 🙂

Flee THE  Tax Man

New York thinks of itself as the place to be, but its high taxes have made it a place to flee. Those who have escaped the Empire State tax man could fill a major city.

The state of New York, with about 19.5 million people, has no known plans to erect concrete barriers or barbed wire fences. But from 2000 to 2010 it suffered an exodus of some 3.4 million New Yorkers — nearly a million more people than in Germany’s post-war experience and more than that of any other state.

And the outflow hasn’t stopped. The income loss for the state is $45.6 billion, the Tax Foundation says.

Granted, it’s not just one-way traffic. New York has plenty of immigration from abroad; its more than 4 million foreign-born residents give it the second-biggest immigrant population in America.

So net outward migration is about 1.3 million.

Most New York refugees are in sunny, zero-income-tax Florida. The Sunshine State, along with its rays, offer big relief from New York’s state tax on income, which starts at almost 6.5% and reaches nearly 9% for the overly successful.

On top of that are high sales taxes that approach 9% in New York City, but 7% in some other areas.

Heritage Foundation analyst Nick Kasprak said taxes play a role in people’s decisions to relocate.

“You generally see people moving from higher-tax states to lower-tax states,” he said. “Certainly, taxes are one way that states compete with one another.”

Florida wins that competition with New York hands down. It has no income tax and no estate tax.

http://interactive.taxfoundation.org/migration/

New Yorkers who leave an estate of more than $1 million to their loved ones get hit with a state death tax reaching 16%, bringing billions into state coffers.

Democratic Gov. Andrew Cuomo admits that “working families can’t afford to pay the ever-increasing tax burden … and this state has no future if it is going to be the tax capital of the nation.”

But like a long line of New York politicians from both parties, what he dangles is relief from the state’s high property taxes, which are tied to state government spending mandates on localities — a longtime shell game showing no real signs of ending.

Cuomo’s predecessor, Eliot Spitzer (aka the Emperor’s Club escort agency’s Client No. 9), actually attained the governorship as a tax crusader of sorts, suing H&R Block for $250 million on fraud charges as state attorney general while simultaneously seeking the governor’s mansion.

But Spitzer didn’t, and Cuomo hasn’t, threatened New York’s status as “tax capital of the nation” with any substantive reform that changes the status quo.

Like those formerly enslaved behind the Iron Curtain, New Yorkers’ choice is a wrenching one: either escape by leaving home, or spend years waiting for a liberator to arrive.

Political Cartoons by Lisa Benson

 Political Cartoons by Chip Bok
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2011

People can change the volume, the location and the composition of their income, and they can do so in response to changes in government policies.

It shouldn’t surprise anyone that the nine states without an income tax are growing far faster and attracting more people than are the nine states with the highest income tax rates. People and businesses change the location of income based on incentives.

John Fund of WSJ’s Political Diary breaks down Tuesday’s most interesting primary contests. Also, WSJ Columnist Mary Anastasia O’Grady translates the latest economic signals from Washington.

Likewise, who is gobsmacked when they are told that the two wealthiest Americans—Bill Gates and Warren Buffett—hold the bulk of their wealth in the nontaxed form of unrealized capital gains? The composition of wealth also responds to incentives. And it’s also simple enough for most people to understand that if the government taxes people who work and pays people not to work, fewer people will work. Incentives matter.

People can also change the timing of when they earn and receive their income in response to government policies. According to a 2004 U.S. Treasury report, “high income taxpayers accelerated the receipt of wages and year-end bonuses from 1993 to 1992—over $15 billion—in order to avoid the effects of the anticipated increase in the top rate from 31% to 39.6%. At the end of 1993, taxpayers shifted wages and bonuses yet again to avoid the increase in Medicare taxes that went into effect beginning 1994.”

Just remember what happened to auto sales when the cash for clunkers program ended. Or how about new housing sales when the $8,000 tax credit ended? It isn’t rocket surgery, as the Ivy League professor said.

On or about Jan. 1, 2011, federal, state and local tax rates are scheduled to rise quite sharply. President George W. Bush’s tax cuts expire on that date, meaning that the highest federal personal income tax rate will go 39.6% from 35%, the highest federal dividend tax rate pops up to 39.6% from 15%, the capital gains tax rate to 20% from 15%, and the estate tax rate to 55% from zero. Lots and lots of other changes will also occur as a result of the sunset provision in the Bush tax cuts.

Tax rates have been and will be raised on income earned from off-shore investments. Payroll taxes are already scheduled to rise in 2013 and the Alternative Minimum Tax (AMT) will be digging deeper and deeper into middle-income taxpayers. And there’s always the celebrated tax increase on Cadillac health care plans. State and local tax rates are also going up in 2011 as they did in 2010. Tax rate increases next year are everywhere.

[laffer]

Now, if people know tax rates will be higher next year than they are this year, what will those people do this year? They will shift production and income out of next year into this year to the extent possible. As a result, income this year has already been inflated above where it otherwise should be and next year, 2011, income will be lower than it otherwise should be.

Also, the prospect of rising prices, higher interest rates and more regulations next year will further entice demand and supply to be shifted from 2011 into 2010. In my view, this shift of income and demand is a major reason that the economy in 2010 has appeared as strong as it has. When we pass the tax boundary of Jan. 1, 2011, my best guess is that the train goes off the tracks and we get our worst nightmare of a severe “double dip” recession.

In 1981, Ronald Reagan—with bipartisan support—began the first phase in a series of tax cuts passed under the Economic Recovery Tax Act (ERTA), whereby the bulk of the tax cuts didn’t take effect until Jan. 1, 1983. Reagan’s delayed tax cuts were the mirror image of President Barack Obama’s delayed tax rate increases. For 1981 and 1982 people deferred so much economic activity that real GDP was basically flat (i.e., no growth), and the unemployment rate rose to well over 10%.

But at the tax boundary of Jan. 1, 1983 the economy took off like a rocket, with average real growth reaching 7.5% in 1983 and 5.5% in 1984. It has always amazed me how tax cuts don’t work until they take effect. Mr. Obama’s experience with deferred tax rate increases will be the reverse. The economy will collapse in 2011.

Consider corporate profits as a share of GDP. Today, corporate profits as a share of GDP are way too high given the state of the U.S. economy. These high profits reflect the shift in income into 2010 from 2011. These profits will tumble in 2011, preceded most likely by the stock market.

In 2010, without any prepayment penalties, people can cash in their Individual Retirement Accounts (IRAs), Keough deferred income accounts and 401(k) deferred income accounts. After paying their taxes, these deferred income accounts can be rolled into Roth IRAs that provide after-tax income to their owners into the future. Given what’s going to happen to tax rates, this conversion seems like a no-brainer.

The result will be a crash in tax receipts once the surge is past. If you thought deficits and unemployment have been bad lately, you ain’t seen nothing yet. (Mr. Arthur Laffer is the chairman of Laffer Associates and co-author of “Return to Prosperity: How America Can Regain Its Economic Superpower Status” (Threshold, 2010).)
And there’s the “reduction” in the Deficit from The Government takeover of health care and those associated taxes.

Then the proposals for Cap & Trade that will tax your energy.

Fifty three of the Senate’s 59 Democrats gave unelected, overpaid bureaucrats at the U.S. Environmental Protection Agency a green light yesterday to do pretty much whatever they choose in their quixotic crusade against global warming. All 41 Republicans and six brave Democrats voted for Alaska Sen. Lisa Murkowski’s resolution nullifying the EPA’s recent usurpation of authority under the Clean Air Act to regulate the U.S. economy to combat greenhouse gases. Thankfully, this craven surrender of congressional authority isn’t the last word on the issue, assuming that the November elections produce a Senate with enough backbone to reassert the legislature’s rightful power.

In the meantime, it’s vital to understand how bureaucracies function. Whatever else they may do, leading bureaucrats always do two things, regardless of which party controls the White House or Congress: They limit choices available to the rest of us by imposing regulations that increase government power and thus justify expanding their budgets and staffs; and they protect themselves and their turf by suppressing internal dissent, often at any costs.

As an example of the latter, consider career EPA scientist Alan Carlin. Last year, Carlin went through all the proper channels in submitting a study to the EPA’s top leadership in which he raised serious questions about the credibility of scientific reports used to justify the agency’s decision to regulate greenhouse gases. Carlin’s study became public thanks to the Competitive Enterprise Institute. Carlin’s reward was to be publicly pilloried by President Obama’s EPA administrator, Lisa Jackson. His work was suppressed within the agency, and he was threatened with additional retaliation if he continued voicing his views. Rather than endure this bureaucratic muzzling, Carlin retired.

Similarly, EPA lawyers Allan Zabel and Laurie Williams — a married couple living in San Francisco who between them have four decades of experience at the agency — became so concerned last year about the EPA’s support of cap-and-trade legislation that they created a YouTube video titled “The Huge Mistake” to explain their case. They made it clear that the video represented only their personal opinions, but the EPA still ordered them to change the video’s content or face severe punishment.

Sen. Lamar Alexander, R-Tenn., predicts that a suffocating new round of EPA regulations will soon descend upon the “one-fifth of our restaurants, one-fourth of our schools, two-thirds of our hospitals and doctor’s offices, 10 percent of our churches, thousands of farms and millions of small businesses” that emit greenhouse gases. Considering how the EPA grandees mistreat their underlings, we wonder how the agency will respond to the soon-to-be-swelling ranks of critics on the outside.(Washington Examiner)

Then there’s the bankruptcy of Social Security and Medicare.

But don’t worry, you can be safe and secure and get the warm fuzzies…

BECAUSE IT’S ALL GEORGE W. BUSH’s FAULT! 🙂

So have your Two Minute Hate (A hideous ecstasy of fear and vindictiveness, a desire to kill, to torture, to smash faces in with a sledge hammer, seemed to flow through the whole group of people like an electric current, turning one even against one’s will into a grimacing, screaming lunatic. And yet the rage that one felt was an abstract, undirected emotion which could be switched from one object to another like the flame of a blowlamp-George Orwell) and go out and work 3 jobs just to put food on the table and a roof over your head.

The Guardian reported on June 2 that the UN was supporting a switch to a radical anti-meat agenda. “A global shift towards a vegan diet is vital to save the world from hunger, fuel poverty and the worst impacts of climate change, a UN report said today,” wrote the paper.

Here’s how the group Vegan Action describes this extreme vegetarianism. “While vegetarians choose not to use flesh foods, vegans also avoid dairy and eggs, as well as fur, leather, wool, down, and cosmetics or chemical products tested on animals

The UN report is all about the environmental impact of “consumption and production,” or pretty much what humans do – eat and make stuff. It warns: “A substantial reduction of impacts would only be possible with a substantial worldwide diet change, away from animal products.”

So evil carnivores everywhere beware, the Politically Correct are gunning for you too!

Best rest assured, the government will be here to save you! 🙂

We see it as a entrepreneurial bill – a bill that says to someone, if you want to be creative and be a musician or whatever, you can leave your work, focus on your talent, your skill, your passion, your aspirations because you will have health care.”-Speaker Nancy Pelosi

Doesn’t that just make you feel so much better! 🙂