NEW YORKERS FLEE FOR TAX-FRIENDLY FLORIDA

Wealthy New Yorkers Ditching the Big Apple for Tax-Friendly Florida

JOHANNES EISELE/AFP/Getty Images

AMY FURR

21 Jul 20191,230

2:34

Affluent New Yorkers are leaving the city in favor of Florida’s more reasonably priced Miami-Dade County.

Reports state that more and more New Yorkers are finding the prospect of annual tax and cost-of-living savings between $20,000 and $120,000 by moving to Florida is an offer they cannot refuse.

Recent changes in the nation’s tax laws have convinced many financially stressed residents of the Big Apple to make the move south.

The New York Post reports:

The federal Tax Cuts and Jobs Act signed into law in late 2017 brought with it sweeping changes that limited deductions on state and local taxes — with taxpayers particularly hard hit in New York, New Jersey and Connecticut, which are among the states with the highest income and property taxes.

However, New York’s liberal policies have also caused residents to leave, which in turn causes a decline in population numbers.

“New York and Florida are similar in size, population, and racial profiles,” writes Kristin Tate, an opinion contributor for The Hill. “Each attracts plenty of immigrants. But years of mismanagement in New York has wreaked havoc on its residents.”

Tate continues:

At the end of the day, the price of staying in New York is nearly double that of a temperate place geared toward the lifestyle of older Americans. Plus, there is no loss in culture or cuisine in moving to Miami or West Palm Beach, with the amenities of modern life available for the thousands of residents who are making the jump from New York to Florida each year.

Tax collectors in New York can also make relocating difficult, causing taxpayers to think twice about their plans.

“Like other high-tax states, New York’s Department of Taxation and Finance will go to great lengths to keep wealthy residents on their tax lists,” Bloomberg reported in 2018.

“The states’ methods can be aggressive: Issuing subpoenas to pore through credit card statements, bank transactions or phone records to track a taxpayer’s location, and sending auditors to interview doormen or confirm doctors’ appointments,” the report concluded.

Barry Horowitz, a partner at the WithumSmith+Brown accounting firm, said in March that wealthy residents planning on leaving New York should expect to be audited.

“If you’re a high earner in New York and you move to Florida, your chances of a residency audit are 100 percent,” he said. “New York has always been aggressive. But it’s getting worse.”

Warren Warns of Impending Economic Crisis: ‘Warning Lights Are Flashing’

AFP/Getty/Robyn Beck

HANNAH BLEAU

 22 Jul 2019169

4:13

Another economic crisis is imminent and “warning lights are flashing,” according to presidential candidate and Massachusetts Sen. Elizabeth Warren (D-MA), who offered a plan Monday to address the alleged economic threat.

Warren voiced her concerns on the “serious warning signs in the economy” in a Medium post titled “The Coming Economic Crash — And How to Stop It.”

She described herself as ahead of the curve on the economic crisis of 2008, but said the “people with the power to stop the crisis ” did not listen. This, she implied, could be happening again.

She wrote:

When I look at the economy today, I see a lot to worry about again. I see a manufacturing sector in recession. I see a precarious economy that is built on debt — both household debt and corporate debt — and that is vulnerable to shocks. And I see a number of serious shocks on the horizon that could cause our economy’s shaky foundation to crumble.

Warren listed a few ideas designed to address what she considers this looming economic crisis, many of which she has articulated before. She said it is crucial to reduce household debt and plans to do so, in part, by raising the minimum wage to $15 an hour– a move which the Congressional Budget Office found could result in up to 3.7 million workers losing their jobs, although the CBO’s median estimate is 1.3 million.

“The CBO also found that the hike would raise consumer prices and slightly shrink the country’s economic output by reducing capital investment,” Breitbart News reported.

Warren would also erase the majority of student debt and offer “free” college and “free” universal childcare. Her sweeping debt cancellation plan alone would cost the U.S. roughly $640 billion, putting another significant strain on taxpayer wallets.

The presidential candidate also teased her Green Manufacturing Plan, which will “mobilize our industrial base by making a $2 trillion investment in American green research, manufacturing, and exporting over the next decade.” She believes her Green Manufacturing plan will create over a million “high quality” jobs, which will ultimately help address what she described as the “existential threat of climate change.”

“Warning lights are flashing. Whether it’s this year or next year, the odds of another economic downturn are high — and growing,” Warren warned. “Congress and regulators should act immediately to tamp down these threats before it’s too late.”

The U.S. economy has thrived under the Trump administration, and it remains one of the president’s strong points. During an exclusive Oval Office interview with Breitbart News in March, Trump named the economy as his biggest accomplishment, largely attributing it to his success of deregulating.

As Breitbart News reported:

“Maybe the economy,” Trump replied when Breitbart News Washington Political Editor Matthew Boyle asked him what his biggest accomplishment was in his view. “Look at jobs. Best jobs record in 60 years. Best individual records for Asians, for African-Americans, for Hispanics ever. I think the economy—but I think a lot of things. Regulations—I think regulations led to the economy, the tax cuts. Even in the tax cuts we got ANWR. Nobody for 50 years could get it and I got it approved—you know, the biggest drilling site. So we’ve done a good job—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.’”

The unemployment rate is currently sitting at 3.7 percent– a slight increase from 3.6 percent. However, the slight uptick is not necessarily a bad thing.

“At 3.7 percent, the unemployment rate is close to multi-decade lows. And the reason the rate rose slightly is that the number of Americans looking for work picked up,” Breitbart News reported.

The U.S. economy grew 3.2 percent in the first quarter of 2019, smashing expectations and prompting critics to unload on Obama, who openly mocked Trump’s vision for economic prosperity in the past.

“What magic wand do you have?” Obama asked during a 2016 PBS town hall.

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Pres. Obama on Donald Trump: "The answer is he doesn't have an answer." #POTUSonNewsHour

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“Well Abracadabra buddy… I guess there is a magic wand for that!!!” Donald Trump Jr. exclaimed in a tweet last month.

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Well Abracadabra buddy... I guess there is a magic wand for that!!! @realdonaldtrump has it and is using it for all Americans as promised. It just takes a real leader, one with experience and guts. #magic #teamtrump #flgop #gop

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2020 ElectionEconomyPolitics2020 Presidential RaceDonald Trumpeconomic crisiseconomic growthElizabeth Warren

Déjà Vu? Auto-Loan Delinquency Hits New Record High For, Um … Some Reason

https://hotair.com/archives/2019/02/13/deja-vu-auto-loan-delinquency-hits-new-record-high-um-reason/

 

 

ED MORRISSEY February 13, 2019

Is this a failure of the labor market? Or is it a rerun on a smaller scale of the financial crash that created the Great Recession? According to the Federal Reserve of New York, a record number of Americans are three months or more behind on their car payments — even worse than during the crash in the previous decade:

A record 7 million Americans are 90 days or more behind on their auto loan payments, the Federal Reserve Bank of New York reported Tuesday, even more than during the wake of the financial crisis.

Economists warn that this is a red flag. Despite the strong economy and low unemployment rate, many Americans are struggling to pay their bills.

That seems incongruous in an economy where growth has spread out across the spectrum. Job creation has picked up, wages have increased in real terms at the best rate since before the Great Recession, and the overhang of discouraged workers finally appears to be evaporating. Still, the New York Fed blames this on a lack of widespread impact from the economy:

 “The substantial and growing number of distressed borrowers suggests that not all Americans have benefited from the strong labor market,” economists at the New York Fed wrote in a blog post.

Maaaayyyyybeee, but there’s something else going on here too. In the same blog post, the NY Fed also notes that the delinquencies are mainly coming from subprime loans:

The flow into serious delinquency (that is, the share of balances that were current or in early delinquency that became 90+ days delinquent) in the fourth quarter of 2018 crept up to 2.4 percent, substantially above the low of 1.5 percent seen in 2012.

In the chart below, we disaggregate the delinquency rate by the borrower’s credit score at origination. The relative performance between each credit score group stands out immediately; but the increase in delinquency is most obvious among the loans of the two groups of lower-score borrowers, shown by the blue and red lines in the chart below. Borrowers with credit scores less than 620 saw their transitions into delinquency exceed 8 percent in the fourth quarter (annualized as a moving sum), a development that is surprising during a strong economy and labor market. Meanwhile, the delinquency transitions among those with the highest credit scores have remained stable and very low. In aggregate, the increasing share of prime loans has partially offset the deteriorating performance of the subprime sector.

That increase in the percentage of prime lending as a hedge against subprime risk has only happened recently. Over the last several years, subprime lending increased significantly, including in the auto-loan market. By 2013, subprime auto lending had increased 18.8%, while subprime auto-loan securities had grown 63.5%. Many of those loans carried high interest rates, sometimes as high as revolving credit-card rates. Did people expect to marry credit risks to high interest rates and not get defaults?

The Washington Post buries the scope of that risk towards the end of their article:

He noted that non-prime and subprime auto loans increased from 28 percent of the market in 2009 to 39 percent in 2015, a reminder of how aggressively lenders went after borrowers who were on the margin of being able to pay. More lenders are giving people six or seven years to repay now vs. four of five years in the past, according to Experian, another tactic to try to make loans look affordable that might not otherwise be.

That’s a more accurate look at the aggressive nature of subprime lenders, which also has echoes of the housing bubble and its 2008 collapse. The NY Fed blames this mainly on “auto finance reporters,” but this chart shows a more nuanced picture:

Half of all auto-finance reporter loans are subprime, which accounts for $75 billion in outstanding debt. However, 25% of all auto loans written by large institutions are also subprime — and that accounts for over $97 billion in outstanding debt. Those “too big to fail” institutions apparently didn’t learn any lessons, and neither did the investors who are buying securities based on subprime debt. And how much backstop are the auto finance reporters getting from the large banks?

The only potential good news is that auto-loan debt isn’t large enough to knock out financial institutions — on its own, anyway. Does anyone want to bet that subprime lending in the housing markets hasn’t followed along in the same manner, though?

 

Three Ways to Avoid Death of Dollar – and America

By John Horvat II |

Little remains of the vast edifice of family, community and faith relationships that once unified and anchored the American way of life. These things have not disappeared from the horizon. They are still important, but they have deteriorated. There is no more consensus about what they mean, and they no longer serve as anchors of certainty.

One final anchor remains that does unite Americans. This anchor survives despite everything. Now, even this seems targeted for destruction.

The Last Anchor That Unites Everyone

It seems almost irreverent to affirm, but this last anchor is the American dollar. Money is not supposed to be a social anchor. Other more immaterial things—moral, principles, social bonds—should play this role. However, today money bridges the seemingly unbridgeable chasms that polarize the nation in a way nothing else can.  

It is not just money. What unites Americans across the board is the dollar, which is accepted everywhere either in its physical or virtual form. No one questions its dominant role. As the world’s reserve currency, it keeps global trade running while everything else falls apart. When the other anchors fail, the dollar is always there to spend ways out of a crisis. 

Calling the dollar the last anchor does not mean that money should or does run everything. The dollar is much more than a simple unit of currency. It has immense symbolic importance since it is attached to notions of national sovereignty, power and the American way of life. The dollar sustains the myth of an America that will never fail. Thus, its fall is unimaginable to many Americans who cannot visualize the country without it.

A Culture of Intemperance

However, there is a darker side to the dollar. It facilitates the frenetic intemperance of a culture that rejects limits. People want everything instantly and effortlessly, and the dollar is ever-ready to supply the means to buy fleeting happiness. The government offers its dollar subsidies to keep people dependent and happy. So many others seem willing to sustain this frenzied lifestyle by contracting debt of all types—private, corporate and governmental.

And the dollar is the ideal instrument for this frenzy. It is stable, flexible and plentiful. What sustains the dollar is the world’s willingness to buy U.S. Treasury bonds as a stable investment. There seems to be no limit to the frenetic appetite for these debt dollars worldwide.

However, the dollar cannot solve the nation’s problems no matter how many trillions are thrown at them. Like any currency, the dollar is only as strong as the society that sustains it. With the decline of America’s institutions, it is inevitable that the dollar too will face a decline—perhaps radically and dramatically.

This dollar decline could happen in three different ways, especially in these erratic times.

The Post-2008 U.S. Is Unprepared for New Economic Crises

First, it can be destroyed by overconfidence. The grand myth holds that the dollar cannot be destroyed because it has never been destroyed before, despite several close calls.

There is no logic to this affirmation. All things temporal can be destroyed, especially if they are neglected. However, the argument does carry some weight in a culture that is run on emotions and feelings.

The fact is that the dollar is surviving on borrowed time. The 2008 crisis provoked world finance leaders to use every tool in their toolboxes to fix the crisis. Programs of zero or even negative interest, quantitative easing and other vehicles have all run their course with limited effects. Overconfident Americans need to take notice of dangers on the horizon.

Risks still abound in today’s global economy with trade wars and political tensions. Many economic observers say that should a major crisis hit the world economy, the financial systems could go down. And there are very few new tricks that can be employed to stem the grave damage since the root causes are not being addressed.

The mantra that the dollar is indestructible is hardly reassuring.

The Very Real Debt Threat

The second factor that could cause the dollar’s decline is debt in all its forms, especially American sovereign debt. When the world no longer wants to buy American debt, the crushing burden of high interest rates will have disastrous consequences for the nation.

The present governmental debt shows no sign of diminishing. People have gotten used to the idea of annual $800 billion deficits. It will be the new normal over the coming years as no Senator or U.S. Congressman wants to take things off their shopping lists or face the firestorm of public opprobrium for urging fiscal restraint.  

Also, corporate debt now stands at nearly $9 trillion. The quality of investment-grade bonds has deteriorated with many in or bordering on junk category. This debt could trigger defaults, bankruptcies, burst bubbles of immense proportions, all of which will weigh heavily on the dollar.

Similarly, personal debt has climbed back to pre-2008 crisis levels.

Indeed, ours is a world awash in debt of all sizes, types, and nations. As the world’s reserve currency, the dollar cannot escape the reverberations of a world financial crisis when major players default.

Sidelining the Dollar as the World’s Reserve Currency

The final threat is more deliberate and targeted. As the preferred unit of currency in commodity markets, the dollar is under direct attack today through a new European Union mechanism called a Special Purpose Vehicle (SPV).

Everyone knows that no currency (or even basket of currencies) can replace the dollar as the world’s reserve currency. However, the European Union, China, Russia and Iran are seeking to create a clearinghouse that will run circles around U.S. sanctions against the Islamic Republic of Iran. They are setting up a credit system that will allow the barter trading of commodities without the use of American dollars.

In this way, the dollar can come to be challenged and sidelined by many major countries in international trade, and potentially even losing its privileged status.

The Collapse of the Postwar Order

Any of these three ways can drag down the U.S. dollar from its post-World War II throne. This would be disastrous since it would hasten the collapse of the postwar order with no replacement save chaos and disorder. 

However, the greatest catastrophe would be for American society. The collapse of America’s last anchor will increase the fragmentation and polarization of the nation.  All these three ways are avoidable if America’s political leaders would apply themselves energetically and without further loss of time toward addressing the root causes of the threats the nation faces. It would involve the need for great restraint, sacrifice and new national priorities.

The real problem facing America today is much more a moral problem than an economic one.  Society needs anchors, especially moral anchors to unify the nation. When those anchors are gone, the nation is left rudderless in a sea of chaos.

John Horvat II is a scholar, researcher, educator, international speaker, and author of the book Return to Order: From a Frenzied Economy to an Organic Christian Soceity--Where We've Been, How We Go Here, and Where We Need to Go. He lives in Spring Grove, Pennsylvania, where he is the vice president of the American Society for the Defense of Tradition, Family and Property.