New York Will Probably Make Old People’s Lives Difficult If They Move to a Low-tax State
There’s a state fiscal crisis after all. Plus, old people have all the money.
[H]igh-tax states do not like to lose high-income emigrants, and will check to make sure that former residents really have moved and are not simply pretending that their winter home is their permanent domicile.
“New York is the most aggressive, probably followed by California,” said Bob Meighan of TurboTax. “New York has a long reach and will go after retirees, in particular.”
And one more thing – keep those receipts!
David Moise [of] WeiserMazar[s], said that there are two forces at work there. “More people are leaving because of the disparity in income and estate taxes, and New York is becoming much more aggressive about examining those people because there’s much more of a need for revenue,” he said.
“The state will come in and ask for ‘clear and convincing evidence’ that a person who keeps his New York ties has really moved to Florida, or elsewhere,” he said. At WeiserMazar[s], clients have had to produce phone bills, credit card statements, apartment measurements and EZ pass receipts to prove that they no longer spend most of their time in New York.
New Jersey Should Send a ‘Thank You’ Note to California and New York
“In the recently-released 2011 State Business Tax Climate Index, New Jersey finally moved out of its last-place ranking on that list, in part due to Christie’s veto of the millionaires’ tax he mentioned during his interview. While it still ranks a pretty dismal 48 out of 50, it proves that improvement is possible, even in a state with a tax policy legacy as historically abysmal as New Jersey’s.” [Tax Foundation]
Albany Risks Outright Anarchy Enforcing Taxes on Sliced Bagels
The battle between California and New York for the biggest fiscal shitshow has reached new heights as Albany seems to be going after New Yorkers where it really counts.
For many of you living in New York, grabbing a bagel at your local shop is part of the weekday morning routine. You walk in, wait in line, place the order, pay the total and get on with your day. It’s good to know that the one constant in your life is that the Ess-a-Bagel will charge you the same price for your sesame seed bagel with butter day after day after day.
Well! That constant, your rock, your consistently-priced doughy security blanket may soon be stripped away from you. The Journal reported yesterday that bagel chain Bruegger’s got the wrath of the New York Department of Taxation and Finance, demanding that owner Kenneth Greene start collecting “taxes on all bagels, except for those that remain intact and are consumed off premises,” and collected a ‘significant’ sum of taxes owed.
Why, you ask? Because an obscure law on the books says that a sales tax is to be charged on “sliced or prepared bagels (with cream cheese or other toppings).” OH! And if you eat your everything with cream cheese and tomato in the shop, you’ll also be charged the tax.
The Post has stretched the lengths of investigative journalism once again to find out that most of the vendors around the City haven’t been charging you the extra 9¢ for that carbolicious breakfast.
[T]he vast majority of the bagel vendors The Post visited yesterday didn’t tax sliced bagels with no toppings as they are supposed to.
“I don’t think it’s fair. Why would I put tax on a sliced bagel when you don’t want nothing on it?” said Basil Colon, a cashier at Daniel’s Bagels on Third Avenue in Murray Hill.
He served a cinnamon-raisin bagel, sliced with no spread, to a Post reporter for $1.10, which didn’t include the extra tax of about 9 cents.
Like many bagel-store workers throughout the city, he didn’t know about the slice tax.
We think we speak for everyone, when we say, “What. The. Fuck. Albany?” This is what it has come to? The dire fiscal needs of the Empire State have gotten to the point that you’re shaking down bagel shops for an extra 9¢ per bagel? Granted, that may be a lot – A LOT – of bagels but you’re applying the smallest bandage in the box to a gaping head wound. A head wound that has caused many to think that the next step is to put a tourniquet on the neck of the state government.
You really want to kill the will of the people? Just keep shit like this up. Next thing you know they’ll start slapping the tax on pizza unless you buy the whole pie…unsliced.
Sliced Bagels, Taxes on Top [WSJ]
NY’s cut of bagel ‘dough’ [NYP]
Will Governments Finally Recognize Their Fiscal Responsibility?
This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.
If you live or work in New York City you know how the subway can be both a blessing (when it runs on time) and a curse (when it doesn’t) or for reasons that on Wednesday became clear: fare hikes.
If you don’t live in New York you can appreciate why the agency responsible for public transit, the Metropolitan Transportation Authority, is having such a difficult time making ends meet. At the top of the list is compensation and benefits costs, which account for two-thirds of the MTA’s $12 billion operating budget for 2011.
The MTA says its health care costs are going up about 9 percent annually-which is actually in line with national increases. The challenge for a public agency of course is that it is locked into contracts with its heavily unionized workforce. Making changes is not easy.
The plan the MTA put forward Wednesday was to enter in what it called “net zero” contracts with its unions-contracts in which any raise would be “paid” for by givebacks in productivity, changes in work rules or increased contributions to health care benefits. The unions took exception to this proposal but no one doubts that the compensation structure of government employees needs to come in-line with their private sector counterparts. Andrew Cuomo, the Democratic nominee for governor, has made reforming this imbalance part of his platform.
Debt service aside (and the MTA’s debt service totals $1.8 billion this year, growing to $2.5 billion by 2014), the MTA, like so many government entities throughout the country, has long term health care challenges ahead. Its health care retirement obligation totals $1.4 billion growing to $1.7 billion by 2014. While the MTA continues to pay enough into its retiree health care fund to pay for its current retirees’ health care, the authority, citing this year’s cash-flow problems, will not pay $57 million this year into a fund for future obligations.
The Great Recession has helped bring the issue of government post-retirement obligations to light. As government revenues shrink and obligations grow, taxpayers sense an inherent injustice between their own grim retirement prospects and the assurances given to public sector workers. Subway service cuts and fare hikes are only meaningful if they address the long-term problems rather than enable government to deal with short term crisis.
Cuomo is banking on this public displeasure, as is the MTA. Next year the MTA’s contract with its largest union is up for renewal. The transit authority will be able to test whether it has public support for changing the way the state entity does business with unions. Bringing government into the 21st century by reducing health care and other post-retirement obligations will be good for taxpayers and for businesses, including those with heavily unionized workforces.