Posted on 11/08/2013 7:54:05 AM PST by Kaslin
We know that countries suffer when taxes get too high, in part because investors, entrepreneurs, and other successful taxpayers escape to jurisdiction with less oppressive fiscal regimes. France is a glaring example. On steroids.
We know that states also suffer when the tax burden becomes to onerous, leading to an exodus of jobs and investment.
California andIllinois are case studies of this self-destructive practice.
But it’s especially foolish for state governments to over-tax because it’s relatively easy to move from one state to another. Escaping a high-tax nation, by contrast, is a much costlier step and some governments impose quasi-totalitarian barriers to emigration.
Well, if states are foolish for imposing excessive taxation, then local governments that do the same thing are downright suicidal. It hardly requires any effort to move to another neighborhood on the other side of a city’s borders.
That’s why Detroit was doomed to failure. It’s why California cities are going bankrupt. And it explains why I’m now very bearish about New York City.
That’s because the voters of the Big Apple just voted for a Mayor who thinks class-warfare tax policy is the right approach.
That’s not going to end well. Here’s some of what I wrote for City AM, a newspaper that serves the London financial community.
The new mayor-elect Bill de Blasio has a tax-and-spend agenda reminiscent of the profligacy that led Greece to fiscal ruin. …It doesn’t take mass emigration to destabilise a local government’s finances, particularly when a city is very dependent on a limited number of high-income taxpayers. That is why de Blasio’s fiscal agenda is so risky. He wants to raise the New York City income tax (which comes on top of the 39.6 per cent federal income tax and the 8.8 per cent state income tax) from 3.876 per cent to 4.41 percent for taxpayers with an annual income over $500,000.
The Wall Street Crowd, however, doesn’t need to call the moving vans right away.
But there is some good news: New York City does not have full control of its fiscal affairs. Any changes in the local income tax or local sales tax have to be approved by the state. Democratic governor Andrew Cuomo reportedly has national ambitions, and has expressed scepticism about de Blasio’s planned tax hike. Further, Republicans control the state senate and presumably will not be overly sympathetic to any fiscal plan that pillages Wall Street. So folks in places that compete with New York City – such as London, Tokyo, and Hong Kong – shouldn’t put champagne on ice quite yet. Mayor-elect de Blasio wants to help your cities, but it’s uncertain at this stage whether he will succeed.
If you put a gun to my head, I suspect de Blasio will get some sort of tax hike, but probably not what he wants.
So what will that mean? It’s hard to answer that question without also know what will happen on the spending side of the budget. If he pays off his union supporters by augmenting the already excessive pay and benefits of city workers, then New York City will be on the fast track to fiscal trouble.
But if he “merely” gets a tax hike, then the City’s collapse will take longer. As I noted earlier this year, there are many people who are willing to swallow big tax bills to live in particular locations.
…it’s clear that some people are willing to pay more because they like the non-political features of NYC and the Golden State. For those who like museums, fancy dining, and Broadway shows, there’s no easy substitute for New York City. And for people who like the ocean and a Mediterranean climate, it’s hard to compete with California.
But there are limits. Each time the fiscal burden increases, a few more rich people may decide to leave. And since New York City is heavily dependent on upper-income taxpayers (the government already gets 43 percent of its income tax revenue from this sliver of the population), it doesn’t take much fiscal emigration to destabilize the City’s budget.
Perhaps the most important lesson, though, is that higher taxes on the rich are simply the appetizer course. It’s just a matter of time before politicians go after the rest of us – for the simple reason that you can’t finance a welfare state without screwing the middle class.
P.S. If you want more class-warfare cartoons, clickhere, here, here, and here.
After that I went to Yellowstone for a week, also fabulous but it a VASTLY different way.
How LUCKY we are to live in this MARvelous country.
Ping.
Couldn’t happen to a more deserving bunch than the chronically Marxist university types and the Wall St. shysters who thought giving The Won big bucks could spare their fat wallets.. Now this flaming Communist takes over and needs cash fast for the hordes that voted for him.
Progressive New York. They elect a rich, white, liberal, career politician male who wants to tax everybody and everything, further the course of turning schools into state indoctrination centers for all kids except his own, fan flames of race hatred and war for his personal gain, and eliminate all the rich so that he can further enrich himself, his family, friends and flunky donors.
More of the same crap we’ve been seeing for decades, which has given us places like Detroit, New Orleans, Washington DC, Oakland and other utopias.
Progress.
Its why some big players are moving to Detroit. They recognize that Michigan is moving in the right direction and Detroit is being forced into fiscal responsibility.
Original name of the site of NYC was Nouvelle Angouleme, named by Verrazzano on behalf of Francis I of France.
NYC is going to become a Third World hellhole. It has been going in that direction for a long time. Take a walk down Broadway on the Upper West Side and tell me how many whites you see.
Not if Obamacare is implenmented...
Check out the doctors available....they are in your "region"
No out of service allowed
Comrades will soon require a travel permit ....just like in the old soviet union
I think the same way which is why I moved out last year. Im 51 and grew up there but I just couldn’t take it anymore. I call it “A-hole capital of the world” now because it is, it really is. Every week when Obama was running for reelection, sometimes twice a week, he would come into the city and during rush hour no less so people like horseface Sarah Jessica Parker or George Clooney or Alec Baldwin could hold fundraisers for him. EVERY freakin’ week which should give you an idea how lib that p-shole of a city is. It use to be a cool city about 30 years ago, then all these lib, hipster, trust fund Marxist a-holes started moving in and that was the end, they completely destroyed it.
I hope my former “moderate” “”friend”” “enjoys” all of the “benefits” of living in New York. Good luck, dumb a**. Hahaha! (Sorry, had to make this personal)
Actually, he doesn’t want to tax everybody - just successful people, those who have worked and disciplined themselves to get ahead.
Over half the city’s residents will continue to pay no taxes at all.
Typical communist.
A friend whose kids “just love” New York have moved away. They both lived with a roommates and had crappy jobs. I suspect they liked it because if you walk out on the streets and ask, “will you f*ck me?” to three people the third will say yes. The same is true of buying drugs. I asked why they’d moved away and he said, “Well, they got married to pregnant girlfriends. You can’t raise a kid in New York. That would be stupid.”
As a New Yorker, these are sad times. Grandparents came here as teenagers from Ireland escaping the potato famine for a better life and they did have a better life. My parents were born in NYC. My brothers and sisters as well. I’ve raised my kids here as well. It’s got the best and the worst here. I have enjoyed it and been successful here, but I think it is time to leave. I avoided public schools for myself and for my kids. I’ll just be another person escaping from high taxes, increasing welfare dependency of the city, general moral decline and general liberal rule that is failing.
Interesting tidbit. So recognition of Verrazzano himself outlasted most public memory of Francis I or the name “Nouvelle Angouleme”. We still honor Verrazzano on one of the most expensive toll bridges in the country.
Parts of 2015’s ‘Batman/Superman’ film are being shot in Michigan...should be a nice shot in the arm to the local economy.
Bonjour,scum!
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