the rule of thumb i've always seen is "consecutive quarters of negative economic growth" - in other words, negative change in GNP (have seen GDP used as well) after accounting for inflation.
since these indicators are always published after a time period has occurred and been tabulated, its possible we have crossed the threshold and are in a recession as we speak.
Q1 2022 is estimated at -1.5% right now, the final number will be released on 6/29. Meaning Q2 final data will be released sometime around the end of September, to make it an "official" recession (if Q2 ends up being negative).
it will be interesting to watch NY (and/or CA) put something like this in place and observe from afar. i strongly feel that states should be much more aggressive running policy experiments if their constituents desire them, and at the national level we all get some benefit of seeing how things turn out in real time.
all that said, assuming there is some tangible tax increase, NYC high earners are going to be knocking on the door of 60% combined rates (city, state, federal). tax avoidance and/or relocation services are going to be booming if so.
I don't want to be rude, but if you paid 17%, that's basically the minimum income tax rate (10+4+3) for NYC. That's pretty far form the OP's "NYC high earners". Of course, if you got credits, that's orthogonal as normally those credits cost more than they are worth. For instance, the child credit is far from the cast of raising a child.
I can't think of what county you must live in where you'd be able to afford a home in NYS and pay that little in fed+state+local without any special deductions.
If you're a "high earner" there are a panoply of services that allow you to structure your income, wealth appreciation, or other forms of wealth generation in tax-optimized vehicles.
The tax universes at 200k/yr and 500k/yr-2m/yr income look very different.
I believe - someone more financially literate (and far richer!) correct me if I'm wrong - that you can convert some of those wages into various different vehicles and get paid in non-wage forms in certain cases. Correlation != causation of course, but if you're making $500k/year chances are pretty good a large chunk of that is non-wage income such as capital gains, corporate bonuses, trust funds, etc. And even if it was all wage-derived, over time you could easily realize major capital gains on it if you're lucky enough to (a) make a huge chunk 'o change, (b) have low-enough cost of living to be able to move it into investments and then (c) have enough life stability to be able to continue this pattern for several years or decades (or better yet, have grandparents and parents who did then passed the wealth down to you). Even after taxes as high as 50%, with enough raw wage income you can definitely pivot your "margin" into vehicles that yield serious ROI over time, and can even leverage the highly disparate cost of living to your advantage: use NYC's housing market to justify a ridiculous salary, then live super cheap out there somehow (insert hand-waving magic reference here), and use the difference to buy housing out in, say, rural Texas or Kansas before the pandemic, rent it out via property company, reap profit month-after-month.
From there you follow the directions on your shampoo bottle:
401k, HSA, 529s for state taxes. You can give children gifts up to $28k, which is taxed at the kids rate. There are games you can play with home equity loans.
If you own a business there is a thousand ways to do it. One thing I’ve seen is people’s businesses “donate” to private schools and then get “merit” scholarships for their kids. You can accelerate depreciation of up to $500k of assets, etc.
If you’re smart, you’ll sometimes pay less tax in high tax states. Usually the low tax states have higher property and sales tax rates.
Re: 529s, do remember that tax treatment varies widely state to state. I was bummed to learn that California doesn't offer any deductions for 529 contributions.
(Of course the tax treatment for qualified withdrawals is the same regardless of where you live.)
A number of the comments to your post have some vague sense of what's going on.
The key concept is that as you get more wealthy, you will have access to professionals and tax structures that allow you to defer and recharacterize significant portions of your revenue streams into tax advantaged forms. The exact mechanisms change depending on jurisdiction and asset mix.
Advisory services take money to purchase, but their cost, and the cost of various vehicles used to avoid taxes, do not scale linearly with the amount of wealth to shelter.
The panama and various other financial leak disclosure reporting provide a decently accessible area for lay-persons to investigate. If you'd like to see the effects of scale - there's a lot of literature regarding the multi-national corporation side of tax avoidance in academic journals that's easily found via google scholar or sci-hub.
I am not an accountant nor someone who benefits from these deductions, but I'm casually interested. From what I've seen, a few:
1. Charity can be meaningfully different from chipping in $200 to something if you can afford to pay for large parts of a program, meaning things can have your name on them, or you can get events that you care about hosted at your church while saving on your taxes.
2. Tax advantaged accounts everywhere. Max out all retirement of course, but also education accounts for your four kids. Then I think there's some interesting tax advantages to whole life insurance, but I don't know which end those come on.
3. Structuring more of your life as a business. For example, I use my affordable car almost exclusively for work but it's not worth the trouble to track it for deductions because I still do best with standard deduction. Once you pass that, may as well track everything. And you should buy a large SUV instead of a minivan for your family so you can use the more favorable depreciation schedule that encourages SUV use over minivan and car use. Deduct your laptop and phone and phone plan because if you're making a lot of money, there's almost no chance you're using those for personal stuff more than for business. Probably some travel and dining fit as deductions too. Clothing, maybe? This is all completely legitimate (well, maybe it's not because of my ignorance on particular applications, but the spirit is consistent with how deductions work.)
You also may have the ability to structure some of your income as business appreciation so as to not pay taxes yet. True, it's still trapped until you pay taxes, but it's still resources you have available to you that haven't yet caused you to suffer tax expenditures. As a rule, you should never volunteer taxes that you can legally defer.
It'll all add up, though probably not to an overwhelming amount. My impression is that a lot of the exaggerations of low tax rates come from very slimy accounting driven by agendas (to say nothing of expressing taxes in a given year as a fraction of total accumulated wealth.)
> For example, I use my affordable car almost exclusively for work but it's not worth the trouble to track it for deductions because I still do best with standard deduction
That's not how business expenses work. Talk to an accountant, you're leaving money on the table.
Probably depends what you mean by high income. I think someone making 100k will not pay that much and that is considered high in a lot of places. But I am not sure that is considered high in NYC. High is probably more like 150k - 200k+ and that still wont be anywhere near 60%.
I do get to ~40% when you add up federal, state and city. I don't think anyone is really looking at an actual 60%. Maybe 50% if you're making like over a million.
Median household income in NYC for 2020 was $67k [0]. $100k (especially for a single earner, as is often the case in tech) is considered quite high, but not outrageously so if that makes sense? That's "1BR apartment in a nice but not too trendy neighborhood outside of Manhattan" money, so well on the upper side of middle class. I think people tend to overestimate how much money those outside of the tech bubble actually make.
I’m in Quebec so I paid 29% on everything over 66k to federal and my provincial rates were 20% (over 50k), 26% (over 100k), and 29% (over 150k).
We also have a 15% sales tax. I paid more than a 50% effective rate last year. This is the cost of our social safety net. It feels like too much too me and I’ll be relocating next year.
Quebec has one of the higher tax rates in canada. You still get a similar safety net in the rest of canada for lower (albeit still high if you are a high earner) taxes.
Yes, for sure. I’m not sure what causes Quebec to be so much higher. Our health care system has struggled immensely with the pandemic even with so much funding.
We may have a stronger government programs than most (subsidized parental leave, subsided childcare, subsidized French language media, etc), but almost none of them give any benefit to me.
Part of the difficulty to me is our high rates seem to kick in very early. A lot of other regions also have very high top tax brackets, but very few places are starting their top tax brackets at 100k/y income.
yeah here in NZ we pay 39% marginal over $180k, 33% $70k-180k - no state tax - mostly free public health (5$/drug $100 max per year, $30 to visit GP, nothing for hospital/urgent care/everything else)
What we don't do is spen d all our money on a military industrial complex
> What we don't do is spen d all our money on a military industrial complex
I know it's a bit of a meme, but military spending is far from our only problem. We could cut military spending to $0 and not even make a dent in the defecit, let alone be able to cut taxes. Social security, Medicare, and medicaid together make up 42% of federal spending. (Not to mention food assistance, housing assistance, unemployment, or the dozens of other programs). The US spends a lot on social programs! We just don't get much of anything for it.
EDIT: for completeness - defense spending was 12% of the federal budget in 2021.
last year we spent 25% on social welfare (everything from retirement pensions to the dole), 17% on healthcare for all, 13% on education (from preschool to tertiary) - military was ~3%
One big difference of course is that here in NZ the govt owns the hospitals and doesn't run them for profit, no one takes a cut providing insurance either. We bulk buy pharma for the entire country. We also have a no-fault accident insurance scheme that takes personal injury out of the courts (fewer courts, fewer lawyers, smaller law schools in universities)
You paid much more than that. A substantial part of your rent is property taxes. I also doubt you included sales taxes in that number. Then there's more esoteric stuff like tariffs, etc
My parents lived in North County and paid 13k+ a year on a $350k house. Their current place in Tampa is about 400k and the taxes are less than half of what they were in NY. Maybe Florida is a special case?
I'm basing this off of apartments in NYC. I often see ~$600k co-cops with $800 monthly co op fees (of which half is maintenance half is taxes). That seems low to me compared with similarly priced homes elsewhere.
So, I made a comment that it was in the top 10. Then you listed one that was dramatically higher. While I agree that NY doesn't compete for the top spot; your example in no way invalidates my point.
Because they are responding to the OP (who is talking about NYC) and further elaborating on NYC taxes, while describing their (supposed) NYC tax burden.
Prices are determined by supply and demand. Both are rather inelastic, especially in a highly desirable city like NYC, so very of the property taxes gets passed to the renters. If this weren't true, then renters in California would see savings from prop 13, but clearly that isn't happening.
Bobby gave Lisa $10. Lisa then gave $3 to Uncle Sam. What percentage of Bobby's money went to Uncle Sam? 30%. It's that simple. Bobby gave Uncle Sam 30% of his money.
But if property taxes go up you'd still be paying the same rent. I don't see how it makes sense to say you're paying property taxes when they have next to zero effect on your cost of living.
- A substantial part of your rent is property taxes.
Without detailed analysis there's no way to know if this is true, or how true it is. It is entirely possible for an increase in taxes to lead to no increase in end prices or even a drop in rent prices. It's a complex system.
Landlords are price takers. Supply is fixed short/medium run so just charge the maximum people will pay. Property tax rates have next to 0 effect on that.
That's not how things work. When you file your taxes, your rental properties will be treated as a business and the taxes paid there are a business expense. They are deducted from any rental income before the income is counted for the landlord. It is essentially as if the renter is paying the government directly.
"To some economists, the question is moot: Americans already pay a massive “tax” to fund health care, they say. It just happens to go to private insurance companies, rather than the federal government."
...
"Health insurance costs raise the average effective tax rate on American labor from 29 percent to 37 percent, they said."
The point is, the apartment owner pays property tax and collect rent from tenants to pay for that. If property taxes go up, property owners raise rents to compensate. So the tenants are paying the property tax, albeit indirectly.
If one landlord raises the rent, this will tend to make renters go to other landlords who are not raising the rent. But if the taxes are increased on all the landlords, they will likely all raise their rents together and renters can't simply go to another landlord who isn't raising the rent to avoid the increase.
Its actually much more complicated then that, depending on factors such as the propensity of landlords to cease renting out units if their profit decreases, the propensity of renters to shift to smaller dwellings in the face of rent increases, etc.
This happens all the time. Deciding whether a raised rent price is justification for moving out is a complicated and personal process and yet it fuels all of the response to landlords that do this.
Also, 1-year leases are typical in the U.S. (at least Philly/NYC northeast U.S.), so from that contractual perspective, your rent can go up every year and that's totally legal.
Landlords are also competing with each other and tenants have limits based on what they can actually afford to pay. At some point they can be forced to move out of the city to a lower cost of living location, dropping demand. In fact it's entirely possible for a significant increase in tax rates to make rental units a poor investment, causing housing prices to plummet and rents to drop.
Your mistake is assuming that people who bought up housing stock are guaranteed future profit on their speculative investment.
> In fact it's entirely possible for a significant increase in tax rates to make rental units a poor investment, causing housing prices to plummet and rents to drop.
How does this logic work? Building apartments becomes a bad investment. Then developers don't build apartments. And somehow constrained supply is supposed to result in lower prices?
What if developers built too many apartments so there is no shortage? What if the builders all decided to tear down the cheap apartments and build a bunch of Luxury Condominiums when the the housing market is full broke college students who can't even afford to cover the taxes on individual units?
You can say the market won't let it happen, but the second case is the current real estate market for the town I went to school in.
I’m a landlord and yes it is. My taxes doubled last year because of the stupid housing bubble and so we had to raise rent as well. Gotta make a profit here for this investment to be worthwhile.
Sell your building. Your taxes went up because your property value went up. You aren't entitled to a profit on rent. If you sell your building below what it's valued at, you'll still make a hefty profit, and it'll cause the value of other buildings to lower.
Land owners seem to feel entitled to businesses with no risk. Costs are always passed down, even if it makes people homeless. I'm more than happy with you going out of business if an event that makes you richer isn't an event that you can handle in terms of cost.
Maybe if people didn't buy property they don't live in as an investment then things like the stupid housing bubble might not happen in the first place.
Personally I think owning a residence you don't actually live in should just straight up be illegal, but I'm admittedly pretty radical about parts of the system that seem to exist solely to make the rich richer.
So, if I am going to live in an area for a year... I should be required to purchase a house, including all the money, time, and effort that involves? I would hate to live in a world where that was the case.
I have both owned and rented at different points in my life. There have been times where renting was a better choice for me, for a variety of reasons. I am glad that renting is an option.
In a world where there was no rentals there would probably be new things we can't imagine such as community ownerships. The specific thing that shouldn't exist - in parent commentors and myself is that the renter is paying money so that the actual owner pays off the property for their benefit, not the renter.
If some kind of community property system exists (not for ALL properties but a large number of them) then any rent you pay in say New York is also paying down a virtual mortgage you have the the "community" that spans the country. Like a virtual HOA.
That's how it used to work in the UK with social housing. The local authority would collect the rent and it would be used for upkeep of the properties, with surplus going to other public works. This was set up in the decades following the Second World War as Britain rebuilt, and it generally worked really well.
But then a right-wing government came to power and sold most of the social housing off, while banning local authorities from building any more. So now, we have the situation here where the large majority of tenants are renting from private landlords, who are just pocketing all the rent for themselves and doing the bare minimum upkeep, while holding a rapidly appreciating asset.
Which is exactly what the right-wingers wanted, but of course doesn't help everyone else who isn't a landlord, and just wants somewhere decent and affordable to live.
> Maybe if people didn't buy property they don't live in as an investment then things like the stupid housing bubble might not happen in the first place.
Sure would be awful for a rental market to exist. Without rental there’d be only be home owners and homeless and that is clearly a better world.
There's no guarantee that builders will use the loosened restrictions to build the most efficient housing. In fact they will most likely build the most profitable housing instead.
The most profitable is on the high end - so marble countertops, stainless steel appliances, etc. All the builders will race to build as much of that as they can, as fast as they can. Then, when the market is glutted, they'll be unable to sell off their investments. Builders will end up with their capital all sunk in cheap land and expensive housing. no one can afford to buy. The builders can't sell the cheap land since they leveraged it to pay for developing the expensive housing. They can't sell the expensive housing because the market has temporarily dried up. The builders will just wait until the glut resolves and continue business as usual.
Meanwhile, there is not really that much more actual housing for the low end market. Some builders made a bunch of money and some craftsmen got extra work building houses they can never afford.
> Then, when the market is glutted, they'll be unable to sell off their investments. Builders will end up with their capital all sunk in cheap land and expensive housing. no one can afford to buy. The builders can't sell the cheap land since they leveraged it to pay for developing the expensive housing. They can't sell the expensive housing because the market has temporarily dried up. The builders will just wait until the glut resolves and continue business as usual.
If there’s a glut in the market prices fall. If you have invested a lot of money in something in the hopes of selling it at a profit and you can’t you go out of business and your assets are sold. So if you over leverage and prices fall you go out of business and lose all your assets and the bank may lose some of its assets. Housing supply increases though. In a market where there’s excess demand at current price points (rising prices) that’s good.
Capitalism doesn’t make ever increasing housing prices, zoning does.
I respect the honest response. In my case, I'm not rich. I’m just trying to build up enough passive income to retire someday. There’s no pension for me. I can’t depend solely on my 401K. I’m just trying to be moderately responsible about my own future.
> My taxes doubled last year because of the stupid housing bubble and so we had to raise rent as well. Gotta make a profit here for this investment to be worthwhile
Surely you see stuff like this is part of what is driving this very bubble?
I mean you’re sort of right. There’s no such thing as a free lunch. So stuff is all ultimately paid by the consumer since that’s the end of the line.
There’s really no way to increase taxes without impacting consumers. Unless you try to limit rents, but then you have other problems with people not wanting to invest in apartment buildings.
That assertion depends on an efficient market though, and that is provably not true - the existence of corporate profits demonstrates this, because in an efficient market everyone makes 0 profit, and any rent-seeking will cause every single one of your customers to flee to a competitor who doesn't rent-seek. Everyone has to price as aggressively as possible given the costs, or lose customers to someone who does, and that means zero profit above the actual cost of production/service.
In a world where corporations make profits, some competitors choose to eat the taxes and retain customers, while others may increase prices and lose some customers, and some customers may eat the increased price and remain even though they're getting a worse deal than before. This is the concept of "consumer surplus" vs "producer surplus", and taxes are cutting into those surpluses differently depending on the specifics of each market participant.
All of this has been debated endlessly by economists, in terms of just how much of corporate taxes get passed along to consumers and so on. And the answer seems to be "not zero, and not 100% either", and everything beyond that is up for debate. So no, not "everything is ultimately paid by the consumer", that is the 100% answer and that's pretty clearly wrong in a market where producer-surplus exists.
In reality, real-estate and rents are probably one of the least-efficient markets imaginable. The frictional costs to buying and selling property, and finding a new tenant who might be a problem/deadbeat/etc, or spending a bunch of time apartment-shopping, picking up your life and packing your stuff, and moving, are immense, and all parties involved are highly emotionally invested as well. Landlords are trying to make a long-term calculation about whether the property is going to appreciate - even if they are losing money today, if they expect to make capital gains in the long term it could be worth it. And all parties are operating with minimal information. Out of all the markets in the world, real-estate and rental living spaces are probably one of the least efficient possible.
Yes. Companies are legal fictions and all people buy goods and services. Some people buy those services through those legal fictions so they consume the fraction of them corresponding to their to ownership fraction. Ultimately a person pays all taxes and all people are consumers.
> Last year I paid 17% of my total income in taxes.
Was that in NYS? It doesn't take a lot of income to hit the state rate of 6.33%, everything after $80,651 filing alone, which isn't unusual downstate. You can add roughly 3.8% to that if you live in NYC and another 22% Federally, all just on income.
If you’re earning 1m + in w2 income, then your effective rate is right about 50% in nyc. If the marginal tax bracket goes to 60%, high earners will definitely be moving. Nyc really has a high opinion of itself if they think people are going to be willing to pay 20% extra in taxes for the privilege of living in a city where garbage is left on the sidewalks and infrastructure is constantly breaking down
How do you manage that? I get 31% taken straight from my paycheck (state + federal income, socsec, medicare, etc, and this is after 401k deduction) and then have sales tax and property tax on top.
NY currently greatly restricts how health insurers can discriminate on price based on age to the point that age basically isn't a factor. But most states allow for a ~3x price difference based on age. The other state with a similar rule, Vermont, has a form of single payer insurance as well
...and why combined tax rates for the middle class are around 50%.
As someone who's lived in the Canadian health care system and the US system - it is absolutely lower quality than what average private employer healthcare plan provides in the US.
Even before covid, Quebec's healthcare system was in crisis with packed ERs having dozens of neglected patients on beds in the hallways for weeks... GP access is impossible with waiting lists 3 years long. ...and the nursing shortage was bad before - now because covid caused the government to order nurses to do forced overtime.
Americans have rose-colored glasses when they think about the quality of care in Canada. The truth is that Canadian healthcare is better for people that cannot afford healthcare. ...and American healthcare is far better for the average person that is employed with those benefits.
It's a simple tradeoff. Significantly higher taxes + healthcare for the poor (Canada) vs better healthcare for the average middle-class employed person (US).
The US already spends more than double what Canada spends per capita. If we had the cost efficiency of Canada's health care system, we could by double the health care without spending more than we already do.
The US spends more because our care is higher quality. If you want to see a specialist for instance, the top of their fields will be here because they can charge what they’re worth.
NY should pay for single payer in part by raising real estate taxes, it's the only clear way the state has to avoid capital flight in the way you're describing here.
This said, a big thing NY benefits from is that a lot of people work in NY state temporarily as consultants in addition to the bridge and tunnel crowd that come in from NJ and CT, this gives them a much larger tax base than the population living there brings in on its own.
They are offensively low for multi-million dollar buildings in NYC. Cut some slack for owner occupiers who had the assessed value skyrocket on them. Tax everybody else fairly.
If a property sells for $10M and it's assessed at $100K that's objectively unfair. NYC's deficit spending means that their intentional under taxation of property is subsidized by the rest of the state.
"most of us" don't understand the basic concept of marginal tax rates, and "most of us" don't understand the idea of marginal utility. "most of us" have in some form or another been doused in a firehose of "the only good tax rate is a lower tax rate" propaganda generated over (at least) the last 40 years.
For a long time, the USA (like many other post-industrial revolution countries) has accepted that "fair" means using progressive taxation to try to create roughly equal impact given the marginal utility of higher levels of income. It's not incredibly scientific, but it isn't really incredibly subjective either.
Conservatives and their cousins at some level more or less reject the concept that there is any fair level of taxation at all, and if there is, they lean toward equal numerical taxes for every dollar earned (or taxed), thus rejecting marginal utility theory entirely.
There are at least a couple of high-net-worth-admission lobbying groups that have asked Congress to raise rates on people like themselves (which inevitably will impact other people like themselves). And speaking for myself, I believe that I should pay more in taxes.
Most of us understand the concept of marginal tax rates just fine. We're arguing about the optimal shape of the curve. Everyone (with a few exceptions) seems to prefer that the curve should trend up sharply just past their own income level.
At least half, and I would say as a hand-waving number, maybe as much as 75% of the comments I see in any online comment thread to any news-y-ish thing demonstrate a complete failure to understand marginal tax rates.
Closer to home: my kids don't understand it. My wife doesn't understand it. Most of my in-laws don't understand it.
> the only good tax rate is a lower tax rate" propaganda generated over (at least) the last 40 years.
You lost me here. I guess it’s bad to want to keep my money I’ve worked so hard to earn. Must be that propaganda. Or perhaps the socialism propaganda just isn’t working?
I can't tell if you're being serious - but when people start moving out because of excessive taxation, prices drop and tax revenues go down with them (because real estate taxes are based on home values).
Capital flight lowers real estate tax revenues. This should be obvious, so maybe your comment was a joke?
Remember that this expense is also reducing the cost of employers.
One of the best ways to finance this would be a payroll tax that is basically equal (in aggregate) to the insurance the company is (usually) already paying.
Big employers like having health insurance tied to employment. It makes changing jobs a riskier maneuver for employees as they do not know the quality of the other jobs' insurance coverage, and it creates higher overhead costs for smaller employers so it provides a competitive advantage there too.
Pretty specious argument in the days where SF companies are mandating RTO when it could be far cheaper to negotiate to WFH status those employees who didn't want to be in the bay area or bay area offices anymore.
Large metro areas have a large # of services available. From office furniture delivered in hours to a wide range of service industries available on demand.
From food delivery to sign printing to courier services, large, dense, cities have economics of scale.
I mean, they can lobby against it, but other than that, what does it matter that they don't like it? It's not like they are so management heavy that they can swing a vote.
> they do not know the quality of the other jobs' insurance coverage
And the fact that you can't actually take time off of work to pursue a career change or look for a new job, because you need your job in order to be able to afford basic healthcare. Which makes it a lot harder to pursue a career change or look for a new job, because you are stuck/busy at your current one + whatever other life responsibilities you have (not to mention the really high commute times in NYC).
Only because people are conditioned to only seek medical attention when it's absolutely necessary, because it's too expensive to be proactive even with insurance.
There is nothing stopping NY employers now from just giving people enough cash to buy a plan on the ACA marketplace. You're assuming this upcoming plan will have offerings employees will want, and charges employers whether or not this is the case.
> a payroll tax that is basically equal (in aggregate) to the insurance
Whereupon there is no reduction in cost to any employer.
Theoretically there could be a reduction because the state would be a larger pool of cross-subsidization than any particular employer. In reality the costs are worse since the state will use the taxes to subsidize non-employed persons.
I don't think they're saying that at all. I think the point was, a payroll tax won't necessarily increase costs for a company because it would be offset by eliminating the current healthcare costs.
Right, but my point is that to keep the relative advantage they’d have to pay.
For example imagine a company attracts talent by paying median + healthcare, and another that just paid median. For the latter they would have more costs, no?
The savings aren’t offset unless they were already offering the incentive.
This came up in the VOX in the weeds on healthcare policy some time ago. Their conclusion from the people that had looked into it is that it is sort of impossible for states to do this. Can't really remember the reasons.
There was another state that was trying something like this, I believe it was Vermont.
> Their conclusion from the people that had looked into it is that it is sort of impossible for states to do this. Can't really remember the reasons.
adverse selection is the usual objection raised. If you can live in Montana while you're healthy, and move to New York when you're sick, then New York effectively becomes the dumping ground for the nation's sick and ends up picking up a hugely disproportionate amount of the tab without the revenue base to make it up.
That said, since coastal states make up a disproportionate amount of the economic activity anyway... they may be able to power through it, especially if they can all get onboard with it at the same time. It's not like de-facto cash transfers to the poorer "heartland" states are a new thing in the US.
People don’t move for various reasons, and now sick people are going to move for healthcare?
It’s not financially possible. The tax rate will be so high healthy people will then leave and you’ll be left with a fat bill for your sick population.
You have it backwards, you won’t get more sick people you’ll have less healthy people covering the bills.
I'm guessing the economy of scale for such a buy in isn't enough, and that states would have to take out as much debt as their yearly budgets or even more. Even a Elizabeth Warren's proposed solution was something like 17x the federal budget.
States wouldn't be able to borrow on anything like that scale to fund a healthcare program. Any major increases in healthcare spending would have to be funded by huge tax increases.
FWIW, New York's current Medicaid budget alone puts it between San Marino and Israel for per capita healthcare spending. Widening the net a bit, that's between Italy and the UK.
There’s comments above that explains it “working”. Here’s a site that explains it better. TLDR, taxes go up a lot, private spending for medical procedures slightly falls. Quality of care drops. Pretty well a losing proposition all the way around.
Isn’t this sort of guaranteed to fail? High earners already have great insurance from employers. There’s not likely to be a mechanism to get those benefits back as dollars like you would expect in a national scale steady state system.
The VOX in the weeds healthcare people looked at it some time ago, and most healthcare economists thinks it is not possible for states to do something here.
Somehow they have private insurance in Europe too. Germany has universal health care and you are well advised to get private insurance if you make enough that the state will allow you to buy it. The threshold is a salary of about $68K/year in US dollars.
That’s not what I’m saying. The norm is that a fairly substantial part of your comp in the US is healthcare provided by your employer. If this suddenly becomes worthless (or rather much less valuable because there’s a single payer system in parallel) but your salary stays the same while your taxes go up, you will lose out big time.
It could work just fine if everyone did it. But seems very hard to do just Ny.
The notional value of insurance isn't impossibly high and it would likely loosen up the job market if switching was not complicated by continuing coverage and the risk of not replacing a good benefit.
> NYC high earners are going to be knocking on the door of 60% combined rates (city, state, federal). tax avoidance and/or relocation services are going to be booming if so.
It turns out that people don't often move over taxes, despite the claims of the anti-tax crowd, or NY and CA would have been emptied out long ago. Taxes are investment; we need to start calling them 'low-investment' and 'high-investment' states (but the liberal crowd is blind to the power of messaging and perception). People like the services and the community that investment creates, such a health care and arts.
Also, they can subtract their health insurance costs, and you are only talking about income taxes, while most taxes are either fixed rate for benefits (e.g., Social Security) or, for the wealthy, capital gains.
This is anecdotal, but I know multiple people who have moved to Washington and Texas from NY and CA specifically to save on taxes from large stock grants at tech companies. I don’t think this is a unique experience in the tech industry. At a large public company I worked for, an entire team ended up moving.
I don't know those people and of course can't judge anyone else but me. Generally, the trendy focus on taxes is absurdity. They are making all that money, and are uprooting their lives and family, not to mention the other benefits of living in world cultural and technology capital (which isn't coincidental to the taxes and resulting community investment), to save on taxes? I hope they see that some things are more important in life.
Seattle and Austin are totally comparable, even preferable, to NYC and SF in many ways. So yes, all else equal, why not save an extra 10% of your income?
> Seattle and Austin are totally comparable, even preferable, to NYC and SF in many ways.
I'm sure we can find ways, Seattle and Austin are wonderful places, and what makes NYC and SF special doesn't appeal to everyone. But really Seattle and Austin are not even close. There's a reason NYC and SF have been centers of culture and business for generations; there's a reason that demand is so high that housing costs are stratospheric.
Sure NYC has certain desirable aspects. Seattle has a different set (e.g. way better nature). The point isn’t to compare the cities to find the absolute best. Rather, the question is whether or not the benefits of certain cities or worth the cost. For high earners, the cost of living in NYC is hundreds of thousands or even millions of dollars per year. For some percentage of people that cost is simply not worth it and they move. To claim people don’t move because of taxes is to deny basic economics.
> To claim people don’t move because of taxes is to deny basic economics.
No, it's just not framing the entire economic question around taxes. There are many, many other factors. You can live in places with no taxes at all, but people don't choose to.
> the cost of living in NYC is hundreds of thousands or even millions of dollars per year. For some percentage of people that cost is simply not worth it and they move
They've already moved in that case, but the demand for NYC is enormous.
Maybe we're discussing different things. I was responding to the claim that higher taxes doesn't cause people to move. Just because high earners live in NYC doesn't mean that there weren't some high earners that left due to taxes.
if you live in NYC as a high earner, you already have some of the highest tax rates in the country. A lot of people who are high earners in NYC make their money through w2 income, so there's no way to avoid paying ~50% in taxes.
Anecdotally, I know so many people in this >1M "high earning" bracket who have moved out of NYC to Austin/Miami/Tampa/Seattle in the last couple of years. Especially now that remote work is a viable choice at many companies. Every year you're saving somewhere between 8-10% in taxes, which is upwards of 100k/year.
Whatever your stance on higher taxes for the wealthy are, as long as viable alternative locations exist in the USA where there is such a massive discrepancy in the taxes, you're not going to be able to raise more revenue in NYS/NYC by simply raising the marginal tax rate for the highest earners.
If they actually increased taxes to fund this, I highly doubt they will be able to raise additional revenue, and the primary effect will be driving up home prices even further in the tax-free cities above
I think if states become more heterogenous (and SCOTUS seems to be on that wavelength) the idea is "if you don't like the new laws, relocate". Which sounds great; more diversity of laws, more states that are likely to fit my values more closely.
But this impacts poor people disproportionately. If you're poor it'll be hard or impossible to relocate.
It also impacts people who consider themselves something other than "rootless cosmopolitans".
I do happen to proudly put myself in the rootless cosmopolitan category, but I've had some interesting interactions (even here on HN) with people for whom community, place, family ties, family history etc. are much more important than they are to someone like me. "Relocate" is a particularly jarring edict for such folk.
im adding marginal rates which is somewhat lazy. assuming 1,080,000 as a single earner (married changes the calculation of course):
- 37% federal
- 9.65% state
- 3.876% city tax
- 3% SS and medicare
- ?? disability, unemployment, etc.
- some additional % to cover single payer
so thats somewhere in the mid 50% range adding up. again, effective rates won't be that exact number except for ultra high earners. this also doesn't include property tax or sales tax (8.875%).
crocodile tears for million dollar earners and their tax bills of course, my point being that chasing away a small amount of residents can have an outsized effect on state revenue. (0.3% of returns account for 27% of revenue federally)
Citation needed. Every population graph I can find show a small decline over the last few years but it's still above 2000 and they've had population dips before (1970-1980) that then recovered.
This comment reads like my in-laws who always talk about how "people can't get out of CA fast enough", um the population numbers say otherwise.
How much of this do you think comes from the Bay Area and Los Angeles housing costs and the ability to remote work in the last couple of years (which seems to be coming to an end... possibly) and how much do you think is because of policy and city deterioration which has been publicized?
I can't speak for CA but I see parallels in Seattle, though there's only movement to other cities within other WA cities (mainly the east side).
The common refrain is very Yogi-Berra-like, "nobody lives there anymore, it's too crowded."
Few people on the right want to connect things like rising homelessness -> rising rents and property values in the same period -> an influx of high paying jobs. There aren't concrete policy proposals given to fix those things given the circumstances of the last decade, just finger-pointing at whatever particularly policy someone doesn't like. The amount of gymnastics done to blame anything other than "importing a bunch of high-earners and/or wealthy people has unintended consequences" is high. E.g., pointing to pre-Covid out-migration overall numbers while ignoring net in-migration within the US for earners over 100K/yr. (I haven't seen if this has changed post-Covid, it wouldn't suprise me if it has, but one would want to keep an eye on it over the next two years as policies around WFH shift, of course.)
Why would you even mention "the right" in any conversation involving the governance of San Francisco? What level of control does a party need before accepting responsibility for their governing instead of looking for an exiled boogeyman to blame?
Well, even CA still operates under the basic assumptions of contemporary US capitalism. There's a notable limit to what you can accomplish in terms of social change when you still cannot (or refuse to) directly control housing costs (for example), or control capital flows, or the labor share of (in this case, state) GDP.
While there are some great analyses that point out the flaws and hypocrisy in Democratic governance within CA, I think it's also equally true to say that the state's "left" leaning situation ends up pointing out the inherent contradictions of contemporary US capitalism as well as anything could.
I lived in SF for ~8 years and left during COVID and bought a house. I have worked remote for 5 years (long before covid). My quality of life is just better not living in SF. I should have left earlier. It is all of the reasons you listed and more.
Also, I am a startup junkie and avoiding CA's 13% capital gains has more than offset any pay cut I might take by working remote (which hasn't happened).
Our public school district in the south Bay Area had been steadily losing enrollment. I talked to one of the administrators and she said that based on student records transfer requests, the most common destination outside of California was Texas.
I don't see how expanding coverage will have any bearing on the quality of care givers. It's going to be the exact same doctors and nurses, just compensated from a different source.
> We recently expanded the privileges of nurse practitioners which is great, but two large nursing unions are less than 60 days away from striking.
The problem is that NPs are not fundamentally trained in diagnosis and have huge gaps in their medical training compared to physicians.
In the best case you go to an NP for a simple scrip. In the worst case you see a series of NPs and never get an accurate diagnosis, leading to a circular series of appointments.
NP = 2 year program on top of a 4 year nursing degree.
Physician = 1-3 years of fellowship (optional) + 3-7 years of residency + 4 year medical school on top of a 4 year bachelors degree
I will say that, as someone who knew the above mentioned hacker when I was underage, ATT and Verizon methodically train their employees on pretexting and other social engineering attacks. While they may have their flaws, they both have a culture of security and privacy that is completely different from TMOB.
There was a Darknet Diaries episode recently[0] that focused on a guy who frequently did phone scams, and he said Verizon was the most expensive to hack because you had to basically pay a bribe to get into their systems.
Webmail providers don't even have service, which can be a curse as much as it is a blessing
Anyone can commit megafraud against you by filing a USPS change of address form on your behalf to intercept all your paper correspondence, not to mention the rampant straight up package theft the past few years.
We need a more comprehensive plan than just 'dont use phones'. As long as correspondence has value, someone is going to try and steal it.
a few weeks ago UI released an update to their protect surveillance line which subsequently prevented certain cameras from recording. an update which fixed this "bug" was released 3 days ago.
things like this contribute more to the mood you reference than the reporting from Krebs a year ago, IMO.
They very well have opened themselves to discovery, which is why it is very unwise to throw stones in glass houses when it comes to litigation. I have seen this before where a company opens a defamation suit against someone, they then don't get the results they were looking for and end up losing a countersuit or end up settling out of court because of their idiocy.
I'm not sure what they are thinking on this, but this is also the company that wired 46 million dollars to fraudsters, so its obvious they haven't made wise decisions in the past.
81% off its initial day of trading price. Are there ANY tech IPOS in the last 2 years that are currently trading above their IPO price? I get we are approaching a bear market today but some day the public will wise up to the fact that they get no chance at genuine growth opportunities for these niche tech companies and are being sold on illusory global market dominance narratives.
there are a myriad of wasteful, polluting machines in the world today. who is the arbiter of who is and who is not allowed to use such a machine?
also why blame anyone who purchases such a vehicle for nonsensical tax laws? it is not clearly a commercial vehicle yet the laws are such that it is considered so simply by weighing a certain amount. that is what creates the tax loophole, not the speed limiter. the limiter is simply a consequence of an arbitrary classification.
It's not arbitrary. The weight and speed have external impacts on road durability as well as air quality. Compare the amount of carbon dioxide released by a truck of that size and most other residential polluting machines and it doesn't come close.
If you want to push the cost of your hobby onto society by commiting tax fraud I don't think it's the democratically elected legislature that's at issue here.
I thought they were of concern for the effect on the global climate, in contrast to NOx, CO or HC emissions.
I would think it's academic anyway, because a vehicle that costs as much as a Ferrari isn't going to be used to commute in. Ten times the CO2 emissions from a vehicle driven 1/10th as much is a wash.
As far as weight goes, it may be huge but the article says it's just barely large enough to be classed with commercial vehicles. Wouldn't you think the biggest commercial trucks do most road damage? There's a widespread factoid that the damage is a very nonlinear function of weight, and so road taxes are allegedly misapportioned.
> The weight and speed have external impacts on road durability as well as air quality. Compare the amount of carbon dioxide released by a truck of that size and most other residential polluting machines and it doesn't come close.
Correlation, causation regarding weight/size of vehicle and external impact. Its actually quite simple to objectively determine that sort of impact on a vehicle by vehicle basis, all of this is known. No reason to anchor it to the weight of a vehicle.
Again, the tax aspect ("fraud") is NOT being pushed by a potential purchaser. the laws FORCE it to be a vehicle that is tax exempt (according to the article).
The government is well accepted as being that arbiter. The tax laws are reasonable, and keeping that vehicle driving slowly is correct for maintaining the shared infrastructure it will drive on
since these indicators are always published after a time period has occurred and been tabulated, its possible we have crossed the threshold and are in a recession as we speak.
Q1 2022 is estimated at -1.5% right now, the final number will be released on 6/29. Meaning Q2 final data will be released sometime around the end of September, to make it an "official" recession (if Q2 ends up being negative).