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States in Deep Trouble Over Plunging Income Tax Revenues

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posted on Jun, 18 2009 @ 07:25 PM
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This is by way of Mish's blog, here:
globaleconomicanalysis.blogspot.com...

"The Nelson A. Rockefeller Institute of Government has issued a State Revenue Flash Report discussing an across the board enormous drop in personal income tax revenues."




Total personal income tax collections in January-April 2009 were 26 percent, or about $28.8 billion below the level of a year ago in states for which we have data. In April 2009 alone (April being the month when many states receive the bulk of their balance due or final payments), personal income tax receipts fell by 36.5 percent, or $18.2 billion.

Personal income tax receipts in the first four months of calendar year 2009 were greater than in 2008 in only three states — Alabama, North Dakota, and Utah.

In FY 2008, personal income tax revenue made up over 50 percent of total tax collections in six states — Colorado, Connecticut, Massachusetts, New York, Oregon, and Virginia. Personal income tax revenue declined dramatically in all six of these states for the months of January-April of 2009 compared to the same period of 2008. Among all 37 early-reporting states, the largest decline was in Arizona, where collections declined by nearly 55 percent.



There is a lot more grimness along those lines at the original source, a PDF file that can be downloaded at the following URL:
online.wsj.com...

Well, this makes a lot of sense. States spent like drunken sailors during the boom and socked away NOTHING for the hard times. California has been in the news a lot recently in this respect, but I am certain we are going to see a lot more of this elsewhere.

If things get bad enough, we could get a (wait for it...) FEDERAL bailout of states with inflationary printed money, which of course would come with vastly reduced states rights...the FEDGOV has wanted to break the back of states rights for a long time -- in some ways, the entire history of the US is a long, slow decline of states rights -- and now the feds have their big chance. Creeping communism much? Pretty soon not only big companies like GM will cede control to the central gov't but you'll probably see states falling like dominoes...sickening stuff.




posted on Jun, 18 2009 @ 09:28 PM
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California is in bad shape for sure. The voters were faced with another permanent tax hike, and voted no! Now there are everyday meetings where the lawmakers are angry and lashing out at Govenor Arnold.
Too bad suck it up and take your lumps California!

Same goes for Maryland!


Millionaires Go Missing
Wall Street Journal
Here's a two-minute drill in soak-the-rich economics:

Maryland couldn't balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state-local tax rate can go as high as 9.45%.

Governor Martin O'Malley, a dedicated class warrior, declared that these richest 0.3% of filers were "willing and able to pay their fair share." The Baltimore Sun predicted the rich would "grin and bear it."

One year later, nobody's grinning. One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller's office concedes is a "substantial decline." On those missing returns, the government collects 6.25% of nothing.


That old saying...cant squeeze blood out of a turnip! Although we already know that most states will not live withing a budget, neither the Federal Government. They will just eventually attempt to handcuff us, take our wallets and feed us beans. (if we are lucky)


[edit on 18-6-2009 by burntheships]



posted on Jun, 18 2009 @ 09:39 PM
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reply to post by burntheships
 


Agreed, taxing the rich is a losing move.

Speaking of Maryland, I saw an article the other day (I think some threads have already been posted on ATS about it) that a number of large businesses are leaving Baltimore in droves. The reason: the CRIME has gotten too hardcore...even in daylight.

Here's the info for one such company but I know its not the only one:
weblogs.baltimoresun.com...

These guys wrote a letter about the move, an exerpt from which is as follows. Seems taxes were also an issue:



Dear Mayor Dixon,

My name is Louis Citron and I am the General Counsel at New Enterprise Associates. We are a venture capital firm located at...[snip]

...We would like you to know that New Enterprise Associates has decided to move its Baltimore city office to Timonium. We calculated that our decision will cost the merchants in this neighborhood at least $200,000 per year in revenue as we are terminating, among others, our cleaning service and security guard, and will no longer be paying for parking spaces in the local garages, and no longer buying our lunches from local restaurants and the Maryland Club.

Our decision was a result of the high level of crime in our neighborhood. Over the last several years, many of our cars have been broken into resulting in very expensive repairs, our employees have been robbed at gun point, drug needles and used condoms have been left on our front stoop, and psychotic homeless people have menaced our employees and threatened to kill them. We have voiced our frustrations to the local community leaders and police, but the environment has only worsened. The recent local beatings by roving teenagers during the day in this neighborhood, the raucous club in the basement of the Belvedere, and other gang violence throughout the city reinforces the appropriateness of New Enterprise Associates’ decision to move in order to protect its employees....

... Further, now that I no longer work in the city, I might move my family out of the city too if violence and crime continue to increase in the Roland Park area. I pay too much in taxes now to live in fear and to have sewer lines back up on a regular basis into my home.




[edit on 6/18/09 by silent thunder]



posted on Jun, 19 2009 @ 01:32 AM
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Don't believe California government, they're NOT BROKE!!!!

If you have stocks and bonds, and no job, are you broke?

Look up CAFR, Comprehensive Annual Financial Report. All state, county, city, transportation, federal, and other agencies have millions to billions in bonds, stocks, annuities and other investments.

It's a trick to take more from us!!!

California's CAFR: www.sco.ca.gov...

California assets alone are $182 Billion dollars (not counting assets of county, state, city, etc), they're about to shut down government for a budget gap of what, $24Billion?

Edit: Excuse me, $408 Billion, see page 48 of the CAFR doc linked above.
Edit 2: Billion, not Trillion

[edit on 19-6-2009 by Dbriefed]

[edit on 19-6-2009 by Dbriefed]



posted on Jun, 19 2009 @ 01:40 AM
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I find it strange that California would be in such big financial trouble because many of the movie and singing "stars" live there.

Don't they pay taxes?

Just a few of these "stars" have a net worth more than some entire countries.

We need a straight taxing system, no loop holes, no fancy lawyers just equality for everyone and not just the rich and famous.

If you make more than 372,950 your tax bracket is 35% www.moneychimp.com...



posted on Jun, 19 2009 @ 03:20 AM
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reply to post by ofhumandescent
 


State and local income taxes are FAR below Federal (39% max)

Most states only collect 40-50% of their revenue through income taxes alone. And while they pay more in taxes, there are much fewer than there are Middle class, or christ, the Lower class.. A few dozen thousand have to provide for the millions that don't pay any taxes at all.. the resource drain is .. incredible.

As to the fella who brought up the investment budgets and accounts:

Most assets are non-liquid, no one has 408 trillion in anything, and the majority of Hedge Funds operated by the State are for Pensions -- civil employee retirements, health care and so forth. There are investment funds specifically for States supplemental income, however since the markets on average lost 50% of their value, that obviously took a major hit. Also, as a list of total assets real estate is also included.

I think you may only be looking at numbers, and not what the numbers are used for.



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