Month: March 2021

Study: Graduated Income Tax Proponents Rely on Analyses That Exclude the Vast Majority Of “Millionaires” to Argue Their Case

Mary Pat Campbell
Study: Graduated Income Tax Proponents Rely on Analyses That Exclude the Vast Majority Of “Millionaires” to Argue Their Case

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Excerpt:

“Professor Young’s wealth migration analyses don’t capture the full breadth of tax flight by million-dollar earners,” said Andrew Mikula, co-author of “Missing the Mark on Wealth Migration: Past Studies Drastically Undercounted Millionaires.” “High-net worth households that do financial planning could move to another state before they sell million-dollar assets. They fly under the radar in Cristobal Young’s work because most of them don’t earn more than $1 million in the year before they leave.”

The graduated income tax proposal advanced by the Massachusetts Teachers Association, the Service Employees International Union, and other union, advocacy, and religious groups, defines earnings as including salary and capital gains on the sale of assets, which makes net worth a critical component of households subject to the tax.

Publication Date: 25 March 2021

Publication Site: Pioneer Institute

Part I: Lamont’s Budget: A Game of ‘Caps,’ Except for The Privileged Few

Mary Pat Campbell

Link: https://ctexaminer.com/2021/03/26/lamonts-budget-a-game-of-caps-except-for-the-privileged-few/

Excerpt:

For over a decade, state employee compensation has exceeded compensation in Connecticut’s private sector by about 40 percent, the biggest gap in the nation. 

The consequence is that the State Employee Retirement Fund (SERF) is drastically underfunded. It is difficult to fund such wildly overgenerous benefits, especially since the state didn’t even start to fund them until years after beginning to award them.

What now is an ongoing gravy train for state employees is ultimately a train wreck for them and the state. There are only three ways to avoid the wreck: (1) massive tax increases and/or service cuts, a disastrous option (2) significant cuts in state employee benefits and/or (3) a federal bailout.

Author(s): Red Jahncke

Publication Date: 26 March 2021

Publication Site: CT Examiner

Impact of the COVID-19 Pandemic on Subway Ridership in New York City

Mary Pat Campbell

Link: https://www.osc.state.ny.us/reports/osdc/impact-covid-19-pandemic-subway-ridership-new-york-city

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Subway turnstile data published by the Metropolitan Transportation Authority (MTA) shows a correlation between median household income and subway ridership. Neighborhoods with lower median household incomes tended to have significantly higher ridership as a share of 2019 levels compared to wealthier neighborhoods. This trend was clear not only in April, when COVID-19 had its most dramatic impact on ridership, but has continued through the recovery to date.

In high-income neighborhoods, residents are more likely to be employed in sectors that have easily adapted to remote-work models, such as financial activities and business services. In neighborhoods where residents are more likely to continue using the subway during the pandemic, common areas of employment are the health care and social assistance sector and the leisure and hospitality sector.

Author(s): Thomas DiNapoli

Date Accessed: 28 March 2021

Publication Site: Office of New York State Comptroller

NYS Comptroller DiNapoli: Wall Street’s 2020 Bonuses Rose Amid Volatility

Mary Pat Campbell

Link: https://www.osc.state.ny.us/press/releases/2021/03/nys-comptroller-dinapoli-wall-streets-2020-bonuses-rose-amid-volatility

Excerpt:

The average bonus paid to employees in New York City’s securities industry grew by 10 percent in 2020 to $184,000, in line with the city’s most recent 9.9 percent projection, likely allowing the city to meet or exceed its income tax revenue projections in FY2021, according to annual estimates released today by New York State Comptroller Thomas P. DiNapoli.

….

As a major source of revenue, DiNapoli estimates that the securities industry accounted for 18 percent ($15.1 billion) of state tax collections in state fiscal year (SFY) 2020 and 6 percent ($3.9 billion) of city tax collections in city fiscal year (CFY) 2020.

Pretax profits in 2020 for the broker/dealer operations of New York Stock Exchange member firms (the traditional measure of securities industry profits) increased by 81 percent to $50.9 billion. It was the fifth consecutive year of growth in profits, which are up 256 percent since 2015. Profitability in 2020 was the second highest on record, trailing $61.4 billion recorded in 2009.

Author(s): Thomas DiNapoli

Publication Date: 26 March 2021

Publication Site: Office of New York State Comptroller

States Reopened, but Covid-19 Fears Threaten to Keep Consumers Away

Mary Pat Campbell

Link: https://www.wsj.com/articles/states-reopened-but-covid-19-fears-threaten-to-keep-consumers-away-11616146203

Excerpt:

Texas, Iowa and Mississippi were among the first states to fully reopen businesses this year, ending shutdown orders intended to curb the spread of Covid-19.

But research suggests the dormant economies won’t immediately blossom—unless consumers also lose their fear of the coronavirus.

So far, about 40 million Americans, or 12% of the population, have been fully vaccinated against Covid-19, according to the Centers for Disease Control and Prevention. More than 73 million, or about 22% have received at least one shot.

Author(s): Jo Craven McGinty

Publication Date: 19 March 2021

Publication Site: Wall Street Journal

Federal Reserve to End Emergency Capital Relief for Big Banks

Mary Pat Campbell

Link: https://www.wsj.com/articles/federal-reserve-to-end-emergency-capital-relief-for-big-banks-11616158811

Excerpt:

The Federal Reserve said it was ending a yearlong reprieve that had eased capital requirements for big banks, disappointing Wall Street firms that had lobbied for an extension.

Friday’s decision means banks will lose the temporary ability to exclude Treasurys and deposits held at the central bank from lenders’ so-called supplementary leverage ratio. The ratio measures capital — funds that banks raise from investors, earn through profits and use to absorb losses — as a percentage of loans and other assets. Without the exclusion, Treasurys and deposits count as assets. That will likely force banks to hold more capital or reduce their holdings of those assets, both of which could ripple through markets.

Analysts have been keying on the issue, which is widely viewed on Wall Street as carrying potential implications for markets from bonds to stocks to commodities.

Author(s): Andrew Ackerman, David Benoit

Publication Date: 19 March 2021

Publication Site: Wall Street Journal

Novel coronavirus circulated undetected months before first COVID-19 cases in Wuhan, China

Mary Pat Campbell

Link: https://www.sciencedaily.com/releases/2021/03/210318185328.htm

Excerpt:

Using molecular dating tools and epidemiological simulations, researchers at University of California San Diego School of Medicine, with colleagues at the University of Arizona and Illumina, Inc., estimate that the SARS-CoV-2 virus was likely circulating undetected for at most two months before the first human cases of COVID-19 were described in Wuhan, China in late-December 2019.

Writing in the March 18, 2021 online issue of Science, they also note that their simulations suggest that the mutating virus dies out naturally more than three-quarters of the time without causing an epidemic.

Publication Date: 18 March 2021

Publication Site: Science Daily

COVID: German doctors call for 2-week hard lockdown

Mary Pat Campbell

Link: https://www.dw.com/en/covid-german-doctors-call-for-2-week-hard-lockdown/a-57023394

Excerpt:

Germany’s intensive care doctors have called for a two-week hard lockdown in order to avoid overwhelming the health care system.

A mix of hard lockdown, vaccinations and testing is necessary to “prevent intensive care units from being overflowed,” the head of the German Interdisciplinary Association for Intensive Care and Emergency Medicine, Christian Karagiannidis, told the Rheinische Post newspaper.

His comments come as Germany battles a third wave of coronavirus infections.

Publication Date: 17 March 2021

Publication Site: Deutsche Welle

Death and Lockdowns

Mary Pat Campbell

Link: https://www.city-journal.org/death-and-lockdowns

Excerpt:

The number of excess deaths not involving Covid-19 has been especially high in U.S. counties with more low-income households and minority residents, who were disproportionately affected by lockdowns. Nearly 40 percent of workers in low-income households lost their jobs during the spring, triple the rate in high-income households. Minority-owned small businesses suffered more, too. During the spring, when it was estimated that 22 percent of all small businesses closed, 32 percent of Hispanic owners and 41 percent of black owners shut down. Martin Kulldorff, a professor at Harvard Medical School, summarized the impact: “Lockdowns have protected the laptop class of young low-risk journalists, scientists, teachers, politicians and lawyers, while throwing children, the working class and high-risk older people under the bus.”

The deadly impact of lockdowns will grow in future years, due to the lasting economic and educational consequences. The United States will experience more than 1 million excess deaths in the United States during the next two decades as a result of the massive “unemployment shock” last year, according to a team of researchers from Johns Hopkins and Duke, who analyzed the effects of past recessions on mortality. Other researchers, noting how educational levels affect income and life expectancy, have projected that the “learning loss” from school closures will ultimately cost this generation of students more years of life than have been lost by all the victims of the coronavirus.

Author(s): John Tierney

Publication Date: 21 March 2021

Publication Site: City Journal

Coronavirus: Germany’s Merkel reverses plans for Easter lockdown

Mary Pat Campbell

Link: https://www.bbc.com/news/world-europe-56513366

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German Chancellor Angela Merkel has cancelled plans for a strict lockdown over Easter, just a day after the measures were announced.

Calling the plan a “mistake”, Mrs Merkel said she took “ultimate responsibility” for the U-turn.

The proposed lockdown was agreed with regional leaders in talks overnight on Monday, with restrictions set to be tightened between 1-5 April.

But the plan was reversed following a crisis meeting on Wednesday.

Author(s): Jenny Hill

Publication Date: 25 March 2021

Publication Site: BBC News

ILLINOIS IS ONE OF FEW STATES WITH ‘DEATH TAX.’ BILL WOULD DOUBLE IT.

Mary Pat Campbell

Link: https://www.illinoispolicy.org/illinois-is-one-of-few-states-with-death-tax-bill-would-double-it/

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Many states have moved away from taxing assets after people die because of the harm to family businesses and farms, but a new proposal before state lawmakers would double Illinois’ estate tax.

House Bill 3920 would hike the existing state tax on estates of over $4 million to 9.95% from 4.95%. Unlike neighboring Wisconsin, Michigan, Indiana and Missouri, Illinois is one of just a dozen states that still have an estate or inheritance tax. Tax Foundation analyst Katherine Loughead noted, “The top marginal estate tax rate under this proposal would become the highest in the country at 21%.”

While the bill’s sponsors intend the extra revenues to be used to support Illinoisans with disabilities, hiking the estate tax would squeeze family farmers, reduce the accumulation of productive assets, encourage spendthrift behavior, fuel tax avoidance and evasion, and drive wealth to other states.

Author(s): Justin Carlson

Publication Date: 16 March 2021

Publication Site: Illinois Policy Institute