I throw these items out given the magnitude of their potential impact for local economies and the market overall:
1. From Forbes The Obsolete New York Model, we learn that in
today’s New York City, where 1.2% of the taxpayers–40,000 households–pay 50% of the income taxes and half the households pay no income tax at all.
So what will the Obama health care plan, potentially funded by a surtax on higher wage earners along with a whole host of small businesses, mean for tax rates in New York City? We learn from a report published by The Tax Foundation, an independent Washington D.C. based organization founded in 1937, that the top tax rate in New York City would be 58.7%!! What do you think that does to the high end real estate market and job creation at small businesses?
2. Sticking with the Tax Foundation, we learn House Leadership’s Health Care Plan Pushes Top Tax Rates Over 50% In 39 States:
If Health Surtax Is 5.4 Percent, Taxpayers in 39 States Would Pay a Top Tax Rate Over 50%,” may be found online at http://www.taxfoundation.org/publications/show/24863.html
The hardest-hit states would be Oregon (57.5%), Hawaii (57.2%), New Jersey (57.1%), New York (56.9%), California (56.8%), Rhode Island (56.2%), Vermont (55.8%), Maryland (55.6%), Minnesota (54.4%) and Idaho (54.3%)
The effective marginal tax rate takes into consideration deductions and adjustments in order to present a truer measure of an individual’s rate.
Top tax rates in the remaining 11 states range from 47.3% to 50%.
Who else has an opinion about health care legislation and the proposed funding of Obama’s plan? None other than Douglas Elmendorf, head of the independent Congressional Budget Office (CBO). Elmendorf says in today’s Washington Post, CBO Chief Criticizes Democrats’ Health Reform Measures:
Instead of saving the federal government from fiscal catastrophe, the health reform measures being drafted by congressional Democrats would increase rather than reduce public spending on health care, potentially worsening an already bleak budget outlook, the director of the nonpartisan Congressional Budget Office said this morning.
Though President Obama and Democratic leaders have said repeatedly that reining in the skyrocketing growth in spending on government health programs such as Medicaid and Medicare is their top priority, the reform measures put forth so far would not fulfill their pledge to “bend the cost curve” downward, Elmendorf said. Instead, he said, “The curve is being raised.”
3. I have previously referenced how highly I consider Bloomberg reporter Jonathan Weil. In a discourse on CIT this afternoon, Weil pulled no punches in stating, “the government needs to stop lying about how well capitalized certain banks are.”
4. Sense on Cents is fully motivated to provide the clearest and most balanced assessment of the economy and markets. In that spirit, today’s rally was driven by a surprisingly bullish comment by none other than Dr. Doom himself, Nouriel Roubini. Bloomberg offers, U.S. to Recover, May Need More Stimulus, Roubini said:
“We might be at the bottom or close to the bottom,” Roubini said in a speech today at a Chilean investors’ conference in New York. “In many ways the worst is behind us in terms of economic and financial conditions,” he said, cautioning that “the recession might continue through the end of the year.”
“We should continue with fiscal stimulus and we might need a second one,” Roubini, 51, said today. There’s still a “meaningful amount of weakness” in labor markets, industrial production and housing, he said.
A second stimulus package of as much as $250 billion may be needed sometime early next year, particularly if unemployment goes “well above 10 percent by the end of the year,”
I read that assessment as “don’t break out the champagne but if you want a cold beer, go ahead.”
Keep those cards and letters coming . . .