New Ruling Takes Sledge Hammer to Ulster County's Economy

Vacation home construction drives the economy in my home town of Olive, New York. The reason is that the Democratic Party-dominated government, led by  Congressman Maurice Hinchey, Assemblyman Kevin Cahill, Assemblyman Sheldon Silver and Governor Andrew Cuomo, have regulated and taxed away productive economic enterprise.  Population in Ulster County, New York has grown at one third the national rate as children have fled (often contrary to Democratic-voting parents' wishes) to Republican states like Colorado and Texas.  Not satisfied with the scope and extent of their economic devastation, the New York State Department of Taxation and Finance has recently won a case that is likely to accelerate it (h/t Glenda McGee).

The widely discussed case concerns a Connecticut couple who own a vacation home in the Hamptons.  They do not frequent the home.  They pay income tax to the state of Connecticut.  The New York tax code says that a cottage is not a permanent residence.  It also says that if you spend 183 days in the state then you are a permanent resident.  For the first time, the courts have held that you are a permanent resident even if you never spend time at a permanent vacation home.

The ruling, recently affirmed in the New York State tax appeals tribunal, will reduce property values throughout the state.  In New York City, the state can now claim that wealthy business executives from Europe and Texas must pay income tax to the City.  Many will sell their apartments instead.  On Long Island, many wealthy people own houses in the Hamptons but live as far away as Texas and Hollywood. These too are going to face pressure to sell rather than pay ten percent of their incomes to New York State.

The same is true in Ulster County.  Here, numerous New Yorkers own vacation homes in the Town of Woodstock, whose median income is the county's highest.  But a sizable percentage, perhaps ten percent, come from other states, especially New Jersey.  The effect will be downward pressure on property values.  There is also the question of people who live full time in Ulster County but own second homes in New York City.  Will they have to pay New York City income tax even though they do not live there?  This also could contribute to downward pressure on property values as they sell the second property in New York City.

Taxation interferes with property rights.  Since economic progress depends on property ownership, more aggressive tax systems such as are evolving in New York will be accompanied by fewer rights concentrated at higher levels.  New York's socialists imagine themselves to be egalitarian, but they are friends of plutocracy.  As aggressive taxes hamstring middle income Americans, the super-rich, who can afford to pay multiple income taxes, are able to purchase property at lower values.  George Soros reaps significant benefits from his contributions to the Democratic Party as the rest of the country becomes poorer and, thanks to the Democratic Party and the Rockefeller Republicans, income inequality is increased.

A Taxing Question--New Yorkers ARE INSANE

How much do you pay in taxes? And what's the payback? I recently spoke with someone at the gym. In my neighborhood leftists reign supreme, and this guy was no exception. He told me that the school in Phoenicia, New York is terrible, so he sends his two kids to a private school in Stone Ridge, New York for $8,000 apiece. When I said to him, "It's terrible that we pay all these school taxes and you can't send your kids to public school," he replied, "I believe in taxes."

This individual was somewhat status conscious and self-conscious of his own status-consciousness. It is not a bad thing to "keep up with the Joneses" but enforced "liberalism" is different. He told me that he was brought up in a large house in Scarsdale and that he could afford an apartment in Manhattan as well as private school and a house here. It did not occur to him that while paying several thousand dollars in school taxes did not prevent him from sending his own children to private school, taxes likely prevent many local residents from being able to afford private schools. So, unlike my rich "liberal" friend who loves taxes and sends his children to private school, others whose children's education the taxes harm are not so rich or so lucky.

The question is: what does someone in New York pay in taxes? First off, there's Social Security. The rate in 2008 was 6.2% for employees and 6.2% for employers. Most economists agree that the employer's portion is largely a deduction from wages, so let's say the total is 10%. Medicare is another 1.45% for employee and employer, so let's call that 2.0%. In 2005, the mean household earnings for a 45-54 year old was $74,446, according to a Boston College study, so let's say the individual earns $80,000. The New York State income tax would be $4,686, or 5.8%. The federal income taxes are about $12,000, or 15%, including deductions. As well, the sales tax around here is about 8%. Also, there are premium and similar kinds of consumption taxes. Let's say 2% of income goes into sales tax. As well, property taxes are easily $4,000 for local property tax (5%) and $2,000 for school tax (2.5%) I'm not counting higher prices due to corporate taxes (corporate taxes are passed on to consumers), capital gains, license and DMV fees, tolls. So if we add up the tax bill for the average household: 10% (Social Security) + 2% (Medicare) + 5.8% (State income) + 15% (Federal income) + 2% (sales) + 5% (property) + 2.5% (sales) = 42.3%.

New Yorkers are INSANE! For 42.3% of their income they get:

Terrible schools + badly paved roads + ?

The only good thing is the snow plowing, I'll give them that. But if I spent 42.3% of my income on something and got back snow plowing, I would sue for fraud. But New Yorkers keep electing the same politicians, over and over, who keep trying to raise taxes even more.

They are INSANE!