Economy

Wealthy Americans flee high-tax states, take billions with them: ‘Tax the rich. The rich leave’

The real estate market in some of the richest pockets of the Northeast is flooded with sellers, as homeowners try to unload gorgeous properties — and their high tax rates. There also is evidence that Americans are not just moving to smaller homes in town but fleeing high-tax states altogether as they search for more frugal digs. “Tax the rich. Tax the rich. Tax the rich. The rich leave,” New York Gov. Andrew M. Cuomo, a Democrat, lamented in February as he announced an anticipated revenue plunge in the Empire State. “And now what do you do?” The population of New York and other high-tax states has posted a demonstrable decline in recent years, sparking a debate on whether there are limits to how much the taxman can squeeze from residents. The issue is particularly acute as the April 15 income tax filing deadline approaches — the first since the Republicans’ tax overhaul capped the amount of state and local taxes that can be deducted on federal returns. The $10,000 limit has left governors in high-tax states steaming and has sent Democratic politicians scrambling to try to offer breaks to the same wealthy Americans they usually demand pay their fair share. “It is having a big impact,” said Chris Edwards, tax policy director at the Cato Institute. “There was migration before, but there has always been disputes about the causes with the data. Now I suspect a lot of people are just getting fed up.” Mr. Edwards’ data shows a net outflow in 2016 of almost 600,000 people from the 25 highest-tax states to the 25 lowest, and they took with them roughly $33 billion in income. For the 2018 tax year, the combined state and local tax bill that won’t be deductible comes to $323 billion, according to the Treasury Department’s estimate, and that whopping total will be borne by fewer than 11 million taxpayers. Most of the affected taxpayers are higher earners who already pay most of the nation’s income taxes. The cap on state and local tax deductions affects only those who itemize their returns, which in the past accounted for 27% of filers, according to the IRS. When Republicans pushed through the tax changes in late 2017, they suggested that high-tax states could cut their own taxes, thus saving residents the pain. Maryland Gov. Larry Hogan, a Republican, tried. He proposed a bill to try to reduce taxes for retirees because many have been leaving over high tax bills. Democrat-led states, meanwhile, attempted quirky workarounds, such as giving wealthy taxpayers an option of paying some of their taxes as charitable contributions, thus offering a break to offset the cap on state and local tax deductions. The IRS said it would reject those maneuvers. Migration is one sure way to dodge the hit. The median home price now in Summit, New Jersey, is $868,200 but tops $1.3 million in Darien, Connecticut. Just how many people avail themselves of that option, however, is not clear.

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Fed Says It Won’t Hike Rates in 2019, Citing Economic Slowdown

The Federal Reserve left interest rates unchanged Wednesday and predicted that it will not raise them again for the entirety of the coming year due to a recent slowdown in economic growth. In a widely anticipated move, the central bank’s policy-making Federal Open Market Committee abandoned its previous prediction, made just three-months ago, of continued strong economic growth that would necessitate two rate hikes this year. After predicting in December that the economy would continue to grow at 2.3 percent on the year, officials revised their assessment to 2.1 percent. As a result, the benchmark-funds rate will remain between 2.25 percent and 2.5 percent. The Fed has generally kept rates low since the 2008 financial crisis, but began raising them incrementally under Janet Yellen. The new economic-growth forecast further widens the chasm between the central bank and the White House, which has consistently provided the rosier prediction of 3.2 percent growth this year. The decision to halt rate hikes will likely please President Trump, who, following the Fed’s December announcement, lambasted Chairman Jerome Powell for threatening the bull market he’s enjoyed since taking office. Powell, for his part, has resisted criticizing the president and has repeatedly asserted the Fed’s independence from the Trump administration.

Great news!!     🙂

NY Times Admits: Tight Labor Market Raises U.S. Wages on Dairy Farms

President Trump’s crackdown on illegal immigration in the United States is producing higher wages and better working conditions on American dairy farms, the New York Times admits. Though 1.5 million legal immigrants continue to be admitted to the country every year, and illegal immigration at the U.S.-Mexico border soars to historic levels, the Immigration and Customs Enforcement (ICE) agency efforts to go after employers who hire illegal aliens are proving to be an economic surplus for lower-wage workers. The latest New York Times report on immigration details complaints from dairy farmers who argue that they needed illegal aliens to survive as a viable business. Recent ICE raids of dairy farms, they claim, have made dairy farming more difficult as they can no longer readily rely on cheaper, foreign workers. Dairy farm workers, on the other hand, are seeing the benefits of Trump’s “Hire American” tight labor market through increased wages and better working conditions: Without a legal alternative to informal migrant labor, the competition between dairy farms to retain migrant workers is so fierce that farm owners, once notorious for underpaying and mistreating workers, are now improving working conditions and wages to entice employees to stay on their farms, workers said. Victor Cortez is an immigrant who has worked on a dairy farm in western New York for 18 years. A few years ago, farm owners “wouldn’t let us leave the farm,” he said, adding, “They wouldn’t pay us as much as they promised they would.” “But the good thing about it now,” he said, “is that we get paid more and this farmer is good to me.” For decades, a flooded labor market for America’s working and middle class due to mass legal and illegal immigration has produced generations of low-wage workers, stagnant salaries, and a cheaper labor economy — a benefit to employers at the expense of American workers. Center for Immigration Studies Director Mark Krikorian said that rather than U.S. dairy farms relying on an endless flow of cheaper, foreign workers, the federal government ought to provide subsidized loans for smaller dairy farmers to invest in robots and machines that can do the work more efficiently and without Americans having to subsidize the cost of illegal alien labor. A Bloomberg report from 2015 highlighted the effectiveness of dairy farmers mechanizing: A recent analysis by Goldman Sachs revealed how Trump’s tightened labor market for America’s working and middle class helped grow wages by four percent in 12 months. ICE has played a crucial role in carrying out Trump’s “Hire American” economic nationalist agenda by indirectly reducing the foreign competition, which U.S. workers have been subjected to. Last fiscal year, for example, ICE agents deported more than a quarter of a million illegal aliens, including more than 95,000 deportations of illegal aliens who were living in the interior of the country. Currently, the nation’s Washington, DC-imposed policy on mass legal immigration — where about 1.5 million unskilled legal immigrants are admitted to the U.S. every year — is a boon to corporate executives, Wall Street, big business, and multinational conglomerates, as working and middle-class Americans have their wealth redistributed to the country’s top earners through wage stagnation. Research by the National Academies of Sciences, Engineering, and Medicine has discovered that immigration to the country shifts about $500 billion in wages away from working and middle-class Americans to new arrivals and economic elites.

CNN Poll: 71 Percent of Americans Say Economy Doing Well; Majority Credits Donald Trump

A CNN poll released Monday shows an overwhelming majority of Americans believe the economy is doing well during President’s Donald Trump’s presidency. Seventy-one percent of Americans now believe that the economy is in good shape, according to the poll. Only 27 percent rated the economic conditions as poor. CNN reports that the number is the highest positive number since February 2001 and the best of Trump’s presidency. The poll shows that 51 percent of Americans give Trump positive ratings for his handling of the economy, while 42 percent disapprove. The CNN poll shows that Trump’s overall approval rating is at 42 percent, the highest recorded in the poll since August of 2018. Fifty-one percent disapprove. Eight percent had no opinion. The CNN Poll was conducted by SSRS March 14 through 17 from a random national sample of 1,003 adults with a plus or minus 3.8 percentage points. In an exclusive interview with Breitbart News last week, President Trump cited the economy as his biggest accomplishment so far in his presidency. “Look at jobs. Best jobs record in 60 years. Best individual records for Asians, for African-Americans, for Hispanics ever,” he said. Trump indicated that he looked forward to running for re-election in 2020. “We’ve done a good job,” he said. “So, in theory, it’s easier because I can say, ‘Look what I’ve done,’ as opposed to the first time where I said, ‘I can do this.’”

Good point!  Kinda hard to argue with that!      🙂

The Green New Deal Threatens to Derail Colorado’s Economy

Oil and gas rigs have been popping up all across Colorado in recent years, as have jobs working the rigs. Colorado’s total oil production is valued at more than $9.9 billion for 2018—an estimated 62 percent higher than 2017, according to the University of Colorado Boulder’s most recent study of the state’s economy. The value of the state’s natural gas production in 2018 was estimated at $5.3 billion. Employment in the Colorado oil and gas industry has grown by more than 23 percent since 2016, now accounting for around 25,700 jobs. This year it is expected to grow another 4.8 percent. But now, the Green New Deal, proposed Thursday by Rep. Alexandria Ocasio-Cortez (D-NY) and Sen. Ed Markey (D-MA), is threatening the state’s energy boom. The plan calls for the U.S. to completely abandon the use of fossil fuels over the next ten years. That would not just derail Colorado’s natural resource and mining sector but also the many businesses and jobs that have grown up to serve the energy boom. “Unexpected economic and political factors can change the trajectory of Colorado’s NRM employment outlook abruptly,” the University of Colorado Boulder study warned. Across the United States, the Green New Deal could threaten such extreme economic disruption that it could put into play states once considered safe for Democrats. That is especially true of Colorado, which accounts for almost 5 percent of the total crude oil produced in the United States and has far more to lose from the Green New Deal than places like New York and Massachusetts. In 2016, Hillary Clinton won 48.1 percent of Colorado’s votes. Donald Trump won just 43.1 percent. Libertarian candidate Gary Johnson took 5.1 percent. A Democrat candidate who embraced a plan that would certainly eliminate 25,000 oil and gas extraction jobs and likely another untold number of jobs indirectly related to the sector could create a political, as well as an economic, earthquake. Of course, the Green New Deal would also create jobs, according to its proponents. But while Colorado’s oil and natural gas jobs cannot be located outside of the state, there is no guarantee the new green jobs would be created there. Making matters worse, wind and solar energy farms can be operated with a far thinner workforce, which means that even if the Green New Deal’s new energy were produced in Colorado, it would employ far fewer workers. Sen. Michael Bennet (D-CO) is reportedly considering a presidential bid. This puts him in a political bind: support the Green New Deal program popular with the base of the national party or stand by his state’s economic interest. His office did not respond to a request for comment. Although natural resource drilling and mining employ just 1 percent of the Colorado workforce, the sector pulls above its weight calls in economic impact because the jobs generate some of the highest per worker income levels in the state. Average pay in the sector is 146 percent of the state average. The damage will go beyond just oil and natural gas. Coal jobs too would be killed off. According to a 2015 National Mining Association survey, the coal industry contributed $1.9 billion to Colorado’s economy and directly employed 3,723 workers, plus 12,977 indirect and induced jobs. In the United States, factories that produce equipment for mining and drilling have boomed in recent years on the backs of the technological innovations that have made the U.S. one of the world’s largest energy producers. These factories and the investments in them would go to waste in a Green New Deal that made fossil fuels obsolete or illegal. Investment in Colorado’s traditional energy sector would dry up. Whether investors burned by a government that turned against fossil fuels would willingly support investment in Green-New-Deal-favored energy projects is a risk—and certainly a risk for Colorado’s economy. Ocasio-Cortez portrays the Green New Deal as offering Americans a tremendous opportunity. And no doubt a new national program of green investment, subsidized by cheap government financing, would create many new wealthy entrepreneurs. But it also threatens jobs that Americans already have and depend upon for their livelihoods. Colorado, because it has such a high concentration of good jobs extracting fossil fuels, is one of the states that would be hit the hardest.

Agreed..  Thanks to John Carney for that sobering analysis.  All of us who are tax-paying voters here in the great state of Colorado need to keep this in mind in November of next year when we go to the polls..

Promises Kept: Trump Economy on Track to Create 25 Million Jobs Over 10 Years

Back in 2016 when Donald Trump declared in a speech at the New York Economic Club that his economic plan would create 25 million new jobs over the next decade, many economists scoffed. After years of economic expansion, even a sluggish one, the idea that the economy could add the 208,000 jobs each month needed to hit that goal struck many as far-fetched. Many thought we would be lucky if job creation kept up with population growth, creating around 90,000 jobs per month. But the economy is outperforming expectations–and helping President Trump fulfill his job promise. The economy created an average of 223,000 per month in 2018. And with January’s mammoth 304,000 non-farm payroll gain, the three-month moving average hit 241,000 jobs. During the course two years of the Trump presidency, the economy has added 4,879,000 jobs. That puts Trump just 121,000 jobs behind being exactly on target to create 25 million jobs over 10 years, a 2.48 percent gap. As January’s numbers demonstrated, that could be made up in a single month.

You cannot argue with the numbers.  No matter what the dominantly liberal mainstream media tells you, or how they try to spin it, the Trump economy has been on fire.    🙂

Data: Foreign Workers See 4X the Job Growth of Americans in January

Foreign-born workers are continuing to make significant employment gains over native-born American workers, the latest federal job data reveals. For the month of January, foreign-born workers increased their labor participation rate year-to-year nearly nine times as much as native-born Americans. Likewise, foreign workers enjoyed nearly four times the job growth in January as American workers. While the foreign worker population increased about 3.4 percent year-to-year, the American worker population increased less than 0.9 percent over the same period. Even in unemployment data, foreign-born workers are vastly outpacing American workers. For January, foreign-born workers saw their unemployment rate drop 4.46 percent compared to this time last year. For native-born American workers, the unemployment rated dropped, but at a much slower pace, with a year-to-year decrease of about 2.22 percent. Though President Trump campaigned to decrease overall illegal and legal immigration to the U.S., regulatory curbs to immigration laws have not actually reduced the number of legal immigrants arriving in the country every year. About 1.5 million foreign nationals arrive in the U.S. annually, as well as the 1.5 million foreign workers occupying high-paying, white-collar American jobs at any given time. In December, November, October, and September of last year, foreign-born workers continuously made larger gains over American citizens in monthly employment and unemployment totals. While legal immigrants continued being admitted to the U.S. to take blue-collar working-class jobs and many white-collar, high-paying jobs, there remains 6.5 million Americans who are unemployed, 12.9 percent of whom are teenagers, and 6.8 percent of whom are black Americans. Overall, about remain about 1.3 million U.S. workers have been jobless for at least 27 weeks, accounting for about 19 percent of the unemployed population. Roughly 5.1 million workers are working part-time but want full-time jobs, and 1.6 million workers want a job, including 426,000 workers who are discouraged by their job prospects.