When It Absolutely Just Caught In Their Throat
A report from CNBC on New York. “Manhattan real estate sales and prices took a fall in the fourth quarter, and they’re likely to slide even further this year after the new tax rules take effect. Total sales volume fell 12 percent compared with the fourth quarter of last year — the lowest quarterly level in six years, according to a report from Douglas Elliman Real Estate and Miller Samuel, the appraisal firm. The average sales price in Manhattan fell below $2 million for the first time in nearly two years. The high end of the Manhattan market is showing the biggest cracks. Inventory of luxury apartments — those in the top 10 percent by price — grew by 15 percent.”
“There is now a 17-month supply of luxury apartments in Manhattan, up from 10 months a year ago. And with giant new condo towers sprouting up in every corner of the city, those numbers are likely to grow. Jonathan Miller, president and CEO of Miller Samuel, said that while buyers have already adjusted, sellers may take more time to catch up. ‘The sellers were already recalibrating after 2015,’ he said. ‘Now they will have to readjust again.’”
From Bloomberg. “Manhattan home resales fell in the fourth quarter as buyers wavered ahead of the expected tax overhaul and stood firm in their refusal to overpay. ‘The buyer is very worried about overpaying,’ Steven James, chief executive officer of Douglas Elliman’s New York City division, said in an interview. ‘The fourth quarter was when it absolutely just caught in their throat, where they said ‘No, I’m not going to do it.’”
From the Real Deal. “The last of the legacy contracts from the superluxury boom are closing, and the market is beginning to feel the hangover. The dropoff is largely due to the fact the wave of contracts signed in 2014 and 2015, during the luxury development boom, is coming to an end. That’s evidenced by the much starker declines in the luxury market, where the average sales price slipped 21 percent, from $9.6 million in 2016 to $7.6 million at the end of 2017. In the new development market, the average price fell 17 percent to $4 million.”
“According to a report from Stribling & Associates, the losses in the condo market were unevenly spread throughout the island. Average declines were highest on the Upper East Side and Upper West Side, where the average sales price fell by 15 and 19 percent compared to 2016.”
From New York City Patch. “Prices for the largest, most expensive condominiums and co-operative apartments fell the most, the report found. Co-ops with three or more bedrooms went for 18 percent less on average than a year ago, while large condos went for more than 12 percent less. Sale prices in Manhattan declined throughout the last six months of 2017 after increases in the first half of the year, the report says. The price per square foot in new buildings has been falling even longer. It hit $1,989 in the fourth quarter of last year, down from $2,254 in the fourth quarter of 2016.”
From Curbed New York. “Like the end of 2016, 2017 wrapped with significant political uncertainty and how, exactly, it would affect New York City’s real estate market. The underlying theme through the fourth quarter market reports were questions regarding the latest tax bill. ‘I’m not forecasting the price impact of the tax bill yet,’ Jonathan Miller, the author of Douglas Elliman’s market report said, but he noted that ‘it has more of an effect on the higher end.’ He continued, ‘I expect that in the near future, buyers will come in lower on offers initially and sellers will resist, a repeat of what we have been seeing.’”
“Compass put it most bluntly in its report: ‘The disconnect between luxury inventory and the demands of the market continues to widen.’ Condo inventory priced above $3 million made up 38 percent of condo inventory, but only 25 percent of contracts signed. Co-ops, which tend to be less expensive, became more popular with buyers, who also started negotiating more aggressively.”
From Bisnow. “With all of its debt paid off, 432 Park’s owners appear content with selling off its remaining condos at deep discounts. A buyer from China under the name 432 Park Joy LLC is under contract to buy three units at the tallest residential tower in the world for a total of $91M, The Real Deal reports. Developers Macklowe Properties and CIM Group had listed units 92, 92B and 93B for a total of $120M.”
From Westfair Online. “Several investors have sued companies run by White Plains developer Michael Paul D’Alessio for allegedly stopping payments on three midtown Manhattan condo projects. They fear ‘that there has been a gross misuse of funds,’ according to one of three lawsuits filed on Dec. 22 in Westchester Supreme Court, and unless they can review the books now, ‘it might be too late to seek appropriate relief.’”
“D’Alessio is the head of Michael Paul Enterprises LLC in White Plains. The firm has a 25-year record of building and managing commercial and residential projects, according to its website. ‘My only response,’ D’Alessio told the Business Journal, ‘is that all of the allegations are false and have no basis. I look forward to my day in court to open the books and records.’”
“The lawsuits make essentially the same claims. Investors were promised returns of 10 to 16 percent per year and quick repayment of principal. At some point, payments stopped and D’Alessio cited ‘liquidity’ issues.”
‘Several investors have sued companies…for allegedly stopping payments on three midtown Manhattan condo projects’
This kind of stuff doesn’t appear until the tide goes out. People saying “oh, there’s no fraud” don’t know really, and bubbles attract bums and crooks like flies.
‘The sellers were already recalibrating after 2015,’ he said. ‘Now they will have to readjust again.’
Make it stop?
“Make it stop?”
Sadist to macochist: “Be nice to me or I will stop the pain”.
Er, masochist.
Wow Charleston SC snow ice bridges closed a coastal town i used to live in…
http://www.live5news.com/story/37181422/first-alert-traffic-lowcountry-bridges-closing-because-of-ice
Yep, too much carbon dioxide in the air will tend to do that.
I pay attention to a prognosticator who has pointed out solar sunspot activity has been decreasing dramatically for the past few years..he sold his residence up north and moved to florida last year……”Worst still, the rate of decline will be brutal. This implies we are looking at the fastest decline in nearly 10,000 years. I suppose that is appropriate since we are also at a 5,000-year low in interest rates as well.There is additional research correlating sunspot activity to planetary orbits. Real scientists are exploring climate change as a part of nature rather than man and the correlations are interesting. “The movement of planets, solar activity, and global climate change are increasingly being explored. The periodicity of solar activity along with the physical mechanism of the changing of the Sun is an important topic in solar physics” (may 2017 Annales Geophysicae (EGU). Unlike the Global Warming crowd pushing fake research to get $1 billion grants from government welfare, real investigation into global climate change and solar activity is an incredibly vital and important subject in geophysics, which government is not funding with handouts because it does NOT support raising taxes.” Time will tell……
Yep. Pointing to another “Little Ice Age”, which drove the settlers out of Greenland and changed the way Europe lived during that period:
https://en.wikipedia.org/wiki/Little_Ice_Age
Much of the landscape art during that period chronicles frozen rivers, the popularity of ice-skating, etc.
Interestingly, there’s been some chatter on the local Tampa area boards about some people’s power being out due to the strain on the grid brought about by increase in use of heat.
add e cars and u better build some nukes-pronto
A frozen river nailed the coffin lid down on the Roman Empire.
all 391 ppm of it
“Wow Charleston SC snow ice bridges closed a coastal town i used to live in…”
Some people would say this was “Threadjacking” and it is not “very polite” (not me mind you) especially coming from such an enlightened person that realizes “Archie Bunker still lives in Millions of Americans today”.
Of course that “Archie Bunker” statement makes one realize it’s the same pukes who push the “white privilege” narrative today.
“white people are a plague to the planet.”
‘Buzzfeed’ Celebrates Anti-White Racism
By AMANDA PRESTIGIACOMO
December 7, 2016
On Monday, BuzzFeed celebrated anti-white racism in a piece titled “19 School Powerpoint Presentations That Give Zero F–ks,” in which the liberal publication touted photos of messages that bash white people, such as the always-hilarious “white tears” and the declaration that “white people are a plague to the planet.”
Obviously, if “white” were changed to “black,” BuzzFeed would rightfully condemn such disgusting, racist behavior. But it says “white,” so it’s applauded.
https://www.dailywire.com/news/11415/buzzfeed-celebrates-anti-white-racism-amanda-prestigiacomo
Where will the social checks come from when all the white guys are gone?
https://i.ebayimg.com/images/g/vb0AAOSwjZJZ8zrK/s-l1600.jpg
Just read a joke on WaPo: You know it’s cold in DC when the politicians walk around with their hands in their own pockets.
Being a west coaster I can’t really appreciate the cold snap you’re getting served this weekend. Hunker down.
You can read all the massive overdevelopment in Long Island city, just unbelievable all because of rezoning. Yes there are jobs and NYU law school moved here, the UN financial credit union, but nothing even remotely affordable.
https://twitter.com/LICCourtSquare
Plus all the mom and pop stores were bought out
Realtors are liars.
Sorry for the OT, but no one in all the bloviating press and punditry seems to have caught this little gem, “supposedly” from Bannon.
On where the Trump team could have “dump[ed]…down” information: “Breitbart or something like that, or maybe some other more legitimate publication.”
Kinda weird, as the implication is that Breitbart is not all that “legitimate” as a publication. And yet Bannon was a founding member of the board of Breitbart, and became executive chair after Andrew Breitbart’s death. After leaving the White House, he went back to Breitbart in some capacity.
Wut?
Breitbart is one of the only sources reporting on what’s really going on in Western Europe.
I guess. But why would Bannon make a weird implication about the legitimacy of his own publication? Unless he didn’t, and Wolff put words in his mouth.
Its fake news, question is if Trump is behind it or the dems, but someone needs a distraction.
Wolff has gotten busted in the past for making things up out of whole cloth - typical libtard media.
Bannon was behind it and Bannon is toast. The proof in the pudding is that he has denied none of it. The guy’s a real jerk. He’s the one who let Wolff in and gave him free run of the White House. Wouldn’t you think he’d have researched Wolff before turning him loose? Of course, he did. This was deliberate.
Basically this was a crappy attempt to divide the base. I don’t think it worked. In fact, right now, Bannon might as well hang it up and become a libtard, which he probably is anyway. In fact he’s probably deep state through his Navy Intelligence/Hollywood money laundering associations.
Fratricide is such an ugly thing.
‘With all of its debt paid off, 432 Park’s owners appear content with selling off its remaining condos at deep discounts’
Of course this means the previous buyers are fooked.
Ha, yes! Which is exactly what happened in a number of cases during bubble bust 1.0. I remember being told by a homeowner in a development in Ruskin (south Hillsborough County, Tampa Bay area) development that he had paid $250,000 for his house while the property across the street sold for $80,000. And then there was the story that you or someone else posted here about a lady who was buying a property and pleading with the salesman to promise that other properties in the same development would not be sold below “market value”. I believe the guy made a solemn promise that nothing would be sold below “market vlaue”, lol.
causa trump
NYC skyboxes have been falling for 2 years
1/2 of snow and feds can sleep in n get paid
Here’s something the media will never admit: the President signed a tax bill knowing full well it would do financial harm to his own companies.
BTW, the only thing we salt down here is our margarita glasses.
‘Here’s something the media will never admit: the President signed a tax bill knowing full well it would do financial harm to his own companies.”
Yup. And his own personal tax liability. He’s the real deal folks. God bless DJT.
Re: my posts yesterday about the House Intel committee and the subpoena:
http://www.foxnews.com/politics/2018/01/04/house-intel-committee-to-get-long-sought-documents-from-doj-on-fusion-gps-nunes-says.html
Let’s make a deal.
So, they didn’t actually get them, but they’re going to get them. Boolsheet.
“Here’s something the media will never admit: the President signed a tax bill knowing full well it would do financial harm to his own companies.”
I would like to understand why you think this. Everything I’ve read about the tax law leads me to believe that Trump makes out very well with the new tax law changes:
https://www.usatoday.com/story/news/nation-now/2017/12/20/new-tax-plan-make-trumps-family-richer-experts-say-heres-how/970834001/
‘Like the end of 2016, 2017 wrapped with significant political uncertainty and how, exactly, it would affect New York City’s real estate market. The underlying theme through the fourth quarter market reports were questions regarding the latest tax bill. ‘I’m not forecasting the price impact of the tax bill yet,’ Jonathan Miller, the author of Douglas Elliman’s market report said, but he noted that ‘it has more of an effect on the higher end.’ He continued, ‘I expect that in the near future, buyers will come in lower on offers initially and sellers will resist, a repeat of what we have been seeing.’
NYC is a very high tax city in a very high tax state.
No SALT deduction means higher marginal tax rates for Trump. People have been focusing on ordinary rates with respect to this deduction. However, the biggest benefit is for people who have lots of capital gains…you get to deduct state and local taxes against ordinary income for any capital gains taxes paid.
So, if you pay 10% in state taxes on the sale of a building, you get to deduct that against 37% marginal rates for ordinary income (a savings of approximately 4% of the 10%–effectively reducing the capital gains rate by 4%).
Contrary to popular belief, most of the rental income from real estate is typically sheltered due to depreciation (sophisticated players already enact component depreciation to accelerate depreciation…for properties with lots of wear and tear, like hotels, there is massive depreciation under prior law)…most of the income developers make is from the cap gains when they sell the properties. No SALT deduction is a big hit there.
The article you sent also notes:
1. Maintaining the 1031 exchange for real estate…status quo.
I live in CA, and am in real estate…not nearly to the extent of Trump…my taxes are going up.
The SALT deduction is a hit, but I think this is probably more than offset by the other changes, notably the top marginal tax rate changing from 39.6% to 37%. I think this statement at the end of the article still rings true:
“It is inconceivable that any tax hike from that provision for Trump would not be offset by the break for the billions of dollars worth of pass-through businesses that he owns — at least by his own account.”
The positive thing to remember is that the culture of housing debt just took a big hit.
The positive thing to remember is that the culture of housing debt just took a big hit.
As did the culture of loading up companies with debt.
“It is inconceivable that any tax hike from that provision for Trump would not be offset by the break for the billions of dollars worth of pass-through businesses that he owns — at least by his own account.”
But it’s very conceivable.
Tax rate for NYC residents is 12.7%. At 39.6% with the SALT, the Federal marginal rate was 34.5%.
Without SALT, but at the new rates, it’s 37%.
You do know that a lot of buildings that have the Trump name are not owned by him, right? He licensed the use of this name…so, that income is taxed more.
If Trump can utilize the full 20% deduction for all of his partnership income (still an “if” in my mind, as I’m not sure if the “Capital Element” applies to the one contributing the capital, or anyone owning a piece of the partnership), the most the 37% could be reduced to is to 29.6% (vs. the 34.5% under the old law).
Also, as note above, before, the effective federal capital gains rate for Trump would have been 15% (20%, with the benefit of the SALT deduction against ordinary income). Under the new law, it’s 20%.
So, from what I can tell, Trump’s rates would be:
Non-partnership income (licensing, etc.)…from 34.5% to 37% (a negative under the new law)
Partnership income (LLC pass through)…from 34.5% to as low as 29.6% (depending on who gets the benefit from the capital adjustment) (a positive under the new law)
Capital gains on building sales….from 15% to 20% (a negative)
As noted above, partnership income is typically minimized through the use of depreciation and component depreciation…which is recaptured at the time of sale (as a form of capital gains).
Big income items from developers are typically capital gain events.
In other words, anyone who says that Trump clearly gets a benefit from the new tax law doesn’t know what they are talking about. Some years, he may get such a benefit. In other years, he would take a big hit. And in my experience, the years from developers where they generate capital gains greatly outweigh the annual taxable income from rents.
BTW, I know this because a developer we work with pushed the sale of an asset before year end, citing the negative consequences to the tax law being in a high SALT state.
And unless you own a building with no partners (or in a TIC structure), completing 1031 exchanges is problematic. Still though, I would have liked to see 1031 exchanges go away. Still a wonderful tax avoidance scheme. 1031 until you die…then get a step-up in basis. Never pay a penny of capital gains…FANTASTIC!
I guess the only way to really settle this for certain would be to see a before and after of tax returns, which I don’t think we’ll ever see. I appreciate your explanation of how this might conceivably hurt Trump, but most non-partial tax analyses that I have seen show that the lion’s share of tax relief under this plan skews towards the wealthy and ultra wealthy. I find it difficult to believe that Trump would somehow be exempt from this.
“I have seen show that the lion’s share of tax relief under this plan skews towards the wealthy and ultra wealthy. I find it difficult to believe that Trump would somehow be exempt from this.”
Then honestly, I don’t think you haven’t been paying attention. Or you are blinded by what the MSM is telling you.
As an aside, OF COURSE the benefit from a tax cut skews toward the wealthy…they are the ones to pay the lion’s share of the taxes in the first place.
That said, there is a HUGE difference whether there is a benefit to any particular wealthy person depending on whether they live in a high income tax state, or not–with the biggest negative being the elimination of the SALT deduction.
The biggest screams of all are coming from states with high income taxes. They are trying all sorts of things to reduce/eliminate the negative effect of the elimination of the SALT deduction. Why would in the world would they do this if it didn’t hit their particular wealthy people hard?
Trump lives in a high income tax state (and/or has a lot of his income generated by properties in such high tax state)–thus, he falls into the category of getting whacked hard by the elimination of the SALT deduction.
Said another way, why is Andrew Cuomo doing everything possible to reduce Trump’s taxes further if Trump just got a big tax break?
It is VERY easy to see how Trump wouldn’t benefit. You just don’t want to believe it.
Then honestly, I don’t think you haven’t been paying attention. Or you are blinded by what the MSM is telling you.
You strike me as one of the more intelligent, thoughtful posters on this blog. But when you rail against MSM, your credibility wanes.
Said another way, why is Andrew Cuomo doing everything possible to reduce Trump’s taxes further if Trump just got a big tax break?
The way Trump derives his income is arguably quite different from the way the average blue state New Yorker who still lives in a primary residence with high state and local taxes. Trump at least gets many of the benefits of the tax law when he is hit with limits on SALT deductiblity. Until we see tax returns, arguing whether one outweighs the other is futile.
On the other hand, many residents in NJ, CA, and NY get hit with a double whammy. They don’t derive their income from pass-throughs, LLCs, or partnerships, and they are not corporations, so they have more to lose. I don’t agree with the governors creative ways to circumvent the new law, but I kind of understand why they might go down the path. It’s also a genius move from the point of view of ideology because it basically forces high tax states to cut their spending. The unintended consequences down the road might be that high tax revenue states might start balking when federal aid dollars are doled out to net takers (red states). The polarization will probably get worse.
Everything about how the tax law impacts you is highly dependent on how you derive your income, where you live, and your personal circumstances (e.g. the make-up of your household).
But when you rail against MSM, your credibility wanes.
Really? After all they’ve done to prove Trump’s annoying “fake news” assertions correct?
Until we see tax returns, arguing whether one outweighs the other is futile.
That is absolutely correct, but to say:
“I find it difficult to believe that Trump would somehow be exempt from this.”
And
“The SALT deduction is a hit, but I think this is probably more than offset by the other changes, notably the top marginal tax rate changing from 39.6% to 37%.”
Tells me that you don’t really understand the SALT deduction (because wealthy NYC residents’ Federal marginal tax rate just went up, despite the decline from 39.6% to 37%). And you have been selectively reading what we do know about Trump’s finances.
You need to understand that:
1. To get a benefit under the new passthru laws, you need to either have a) relatively low income, b) lots of employees, or c) high capital investment; AND
2. Trump has in large part organized his world to be “capital light” and “employee light”…licensing his name to real estate developments, not investing his capital in those developments–in other words, his licensing deals, even if through passthru entities, would likely be subject to higher marginal tax rates because of limitations baked into the law.
https://www.washingtonpost.com/graphics/world/trump-worldwide-licensing/
If you were in the real estate business, living in a high tax state (like me), you wouldn’t find it difficult to understand at all that Trump’s taxes could very easily be going up (and very likely might).
And so statements like this from the MSM: “It is inconceivable that any tax hike from that provision for Trump would not be offset by the break for the billions of dollars worth of pass-through businesses that he owns — at least by his own account.”
Leads me to believe that the author doesn’t get it either–or is exhibiting some bias–because based on what I understand, it is certainly possible, and maybe even likely that Trump’s taxes will go up under the plan.
Yes, we will never know unless we see the tax returns…BUT for anyone to say it is “inconceivable” that his taxes went up under the plan is absurd.
On the other hand, many residents in NJ, CA, and NY get hit with a double whammy. They don’t derive their income from pass-throughs, LLCs, or partnerships, and they are not corporations, so they have more to lose.
They only really get hit hard if they are high earners. Lower earners in these high tax states have the blow cushioned through a) the higher standard deduction, and b) brackets for each rate change going up (it takes more income to get to the highest marginal rate now).
The people in high tax states that get hit the hardest are those whose incomes are well over $750k per year.
By the way, we shouldn’t lose sight of the fact that two people integrally involved in the new tax law (Cohn–lives in NYC and Mnuchin–at one point lived in CA) get hurt hard with the lack of the SALT deduction–including lots of their friends at Goldman.
This flies in the face of the implication that policy makers ONLY look out for themselves–certainly some do…but that’s not the sole driving force for all of them.
Cohn is actually one of the adults in the room and one of the policy makers I respect. There are some aspects of the tax plan that I actually agree with and are laudable. His rhetorical question (e.g. “Why aren’t the rest of the hands up?) when trying to sell the tax plan I think may prove quite prescient. I think he genuinely believes that the supply side ideology behind this tax cut will create growth. His genuine surprise that many corporations are not going to invest the extra profit in wages or productivity was perhaps shocking for him. For him, it might be that cracks are starting to form in his cosmovision; maybe the world doesn’t work quite the way he thought it does.
My main gripe is that I’m not sure the trade-off will be worth it. I think it will continue to explode the deficit and will not prove revenue neutral and the benefits are not targeted to where they are needed for broad based growth. But I have an open mind and we’ll see what happens in the next few years. I could change my mind if some of the predictions about increases in household wages come to pass.
Mnuchin has prostituted his credibility and made so many laughable statements that I have no respect for him. His antics with his wife are completely out of touch and tone deaf.
Really? After all they’ve done to prove Trump’s annoying “fake news” assertions correct?
This is sarcasm, right?
https://www.npr.org/2017/02/17/515630467/with-fake-news-trump-moves-from-alternative-facts-to-alternative-language
His genuine surprise that many corporations are not going to invest the extra profit in wages or productivity was perhaps shocking for him. For him, it might be that cracks are starting to form in his cosmovision; maybe the world doesn’t work quite the way he thought it does.
Last month, there were 148k jobs “created”. However, this is made up of approximately 5MM “hires”, and slightly less “fires”.
So, small changes in the number of people hired, or the number of people fired make a HUGE difference in the monthly job numbers.
A 2% increase in hiring, all-else equal would increase employment by 100k.
It doesn’t surprise me that companies are not simply taking the money they are getting back and hiring workers, or buying new equipment…most of them that had money overseas knew some repatriation was in the works (even Obama was talking about it), and with interest rates so low, they simply borrowed the money necessary for their needs–they were not starving for capital. The repatriation will simply allow some of them to de-lever their balance sheet.
And with the limits on interest deductibility on the corporate side, many will.
HOWEVER, in the same way that the 35% marginal tax rate caused some companies to expand elsewhere before the US, or structure their activities to have more overseas vs in the US, a lower tax rate will change what companies do in the future when they grow/contract in the ordinary course.
The US will be a more attractive place in which to expand/keep jobs than before…and when small changes in hiring/firing can make a big difference in the monthly job numbers, I’d be surprised if there isn’t a meaningful positive effect in the US from the new law over time.
Mnuchin has prostituted his credibility and made so many laughable statements that I have no respect for him. His antics with his wife are completely out of touch and tone deaf.
Maybe so, but it’s hard to say that the new tax law is a windfall for him.
Jobs are good, but we’ve had good employment numbers for some time. My diagnosis wasn’t that the problem was not enough jobs or that corporations needed fatter profits, it was that workers pay hasn’t tracked the success of said corporations. That may be changing though:
https://www.nytimes.com/2018/01/05/business/economy/jobs-report.html
I would have liked to see some way to reward corporations via the tax code that are both 1) creating new jobs and 2) creating above average paying jobs. For far too long corporations have been rewarded for shipping jobs and profits overseas. It would be nice to align incentives such that more favorable tax treatment accrues to companies who are employing more and increasing pay. Hard to do this without creating unintended consequences and ways to game the system though.
The US will be a more attractive place in which to expand/keep jobs than before…and when small changes in hiring/firing can make a big difference in the monthly job numbers, I’d be surprised if there isn’t a meaningful positive effect in the US from the new law over time.
I am hoping for the best, preparing for the worst.
I would have liked to see some way to reward corporations via the tax code that are both 1) creating new jobs and 2) creating above average paying jobs. For far too long corporations have been rewarded for shipping jobs and profits overseas. It would be nice to align incentives such that more favorable tax treatment accrues to companies who are employing more and increasing pay. Hard to do this without creating unintended consequences and ways to game the system though.
The only way I’m aware corporations been rewarded for shipping jobs overseas was by gaining access to cheaper labor. How else have they been rewarded?
I wish the government would stop trying to fix things through the tax code. It is very difficult to legislate higher pay.
You can remove barriers to people working (licensing issues), and removing corporate welfare (allowing competition)…both of which would improve competition for labor…driving up its cost.
But of course, that would require politicians to stop tinkering with the tax code as a way to guide what they think would work in the economy.
It is very difficult to legislate higher pay.
you are so correct RW. as a matter of fact it isn’t only difficult, it’s impossible.
https://www.youtube.com/watch?v=l7iaOk9QTHM
The only way I’m aware corporations been rewarded for shipping jobs overseas was by gaining access to cheaper labor. How else have they been rewarded?
Well, how about effective tax rates of near zero for multinational companies with armies of lawyers who can book profits subsidiaries and concoct all sorts of IP transfers, double Irish, etc. The one-time repatriation tax of 8% (15.5%) is sort of a way to collect some of these profits that have not been taxed.
The tax code incentivizes the booking of profits in low tax jurisdictions. Meanwhile, multinational corporations have access to relatively wealthy (for now) US consumers. It’s a bit of a “have your cake and eat it too” mentality where they get to piggyback on past successes of the US being able to build a middle class.
The good news about the new tax law is that it moves towards a territorial system, but I don’t think it goes far enough. But it’s a start. This has policy implications from a macro point of view because a local HVAC company pays one tax rate and some massive multinational might pay a completely different rate. It’s fundamentally unfair and it changes the structure of production in ways that are not good. It also encourages a race to the bottom in terms of remuneration for US based employees.
I wish the government would stop trying to fix things through the tax code. It is very difficult to legislate higher pay.
Implicit in any tax system are value based judgments. Are we going to tax income, consumption, wealth? Are we going to have a progressive tax and, if so, how progressive? What about social safety net and unemployment insurance? Taxes are not neutral, they have ideological underpinnings. So fixing things is part of the game if you think they have unintended consequences or are not favoring society as a whole. Would you have preferred to keep the corporate rate at 35% or is it better to have it lower?
You can remove barriers to people working (licensing issues), and removing corporate welfare (allowing competition)…both of which would improve competition for labor…driving up its cost.
I am a huge fan of reducing corporate welfare. It would be nice if we could somehow figure out which companies get subsidized labor via social assistance programs (housing, food, etc.) and then charge a surtax on those companies for failing to pay a living wage. It should be noted that Walmart has raised pay voluntarily under new leadership, but before this happened, they were able to get away with low pay by virtue that many of its low paid hourly employees were able to survive by government assistance programs. Walmart (the company) had wonderful profits, but it was able keep wages low (and their prices) partially by relying on government assistance to their workforce. This is effectively a subsidy to low wage providers.
That which you tax you get less of, that which you subsidize you get more of. My ideal would be to use the tax code to subsidize the things you want. While I would tend to agree that government can’t mandate higher pay, they can do a lot to create favorable conditions where this is more likely to occur.
So fixing things is part of the game if you think they have unintended consequences or are not favoring society as a whole.
yes we know you think you know how to ‘fix things’, but you don’t. how would you legislate higher pay?
I am a huge fan of reducing corporate welfare.
corporations aren’t ’subsidized’ as you ignorantly believe. you don’t even know what a subsidy is. and no, reduced taxes aren’t subsidies, no matter what your leftist lords tell you.
That which you tax you get less of, that which you subsidize you get more of.
The problem with utilizing the tax code like this is that there are unintended consequences that effectively cause distortions in the market and society as people/corporations distort their activities to minimize taxes. These unintended consequences become more numerous, and more difficult to predict the more complex the tax code.
Example: Subsidizing personal home ownership through the MID also increases home prices, and encourages risky behavior like increasing levels of personal debt.
Companies and people spend more and more time and resources figuring out ways to avoid tax (or to benefit themselves from the tax code), rather than spending their time and resources on more productive activities.
Despite there being some features that I think will be beneficial (including the elimination of the SALT deduction), I still dislike this tax law (and legislating through the tax code in general)…it leaves huge complexity in the code, which leaves it wide open for continued manipulation.
The simpler the code the more time people will be able to spend on other productive activities…even if it’s simply spending more time with their family/kids.
Subsidizing personal home ownership through the MID also increases home prices
normally i wouldn’t nitpick with you, but because i couldn’t keep out of the conversation and you always seek the fundamental truth, i ask that you look at the etymology of the word ’subsidy’.
i agree with you that the MID tax break artificially pushes up home prices and like you, i’d like to see it gone. but since i was previously in an argument with oam about this subject, i couldn’t help but weigh in.
i’m against all subsidies, so i don’t mind when people pejoratively call the MID a subsidy in casual conversation. but when oam starts talking about corporate welfare, then we need to clarify what a subsidy truly is.
Fair enough tj. You understand my point…trying to influence behavior through tax code is a blunt tool that has many unintended consequences–many of which are not broadly beneficial to the economy as a whole.
How would you legislate higher pay?
Certainly I have thoughts on this, but I don’t find it a particularly good use of my time, nor enjoyable, to discuss these issues with you.
corporations aren’t ’subsidized’ as you ignorantly believe. you don’t even know what a subsidy is. and no, reduced taxes aren’t subsidies.
We understand subsidies differently. Let’s just leave it at that.
“but I don’t find it a particularly good use of my time, nor enjoyable, to discuss these issues with you.”
if you had a good argument, you’d make it. but you don’t so you’ll be sitting on the bench.
“We understand subsidies differently.”
no, i understand what they are and you don’t. back to the bench, rookie.
I thought that the property taxes for commercial property were still tax-deductible as business expenses. Yeah, I guess Trump won’t be able to deduct the taxes on his gold-plated apartment in Trump Tower, but I don’t think he’ll go broke over it.
Vienna, VA Housing Housing Prices Crater 5% YOY On Skyrocketing Housing Inventory
https://www.movoto.com/vienna-va/market-trends/
Oh dear…
The Trump administration freed federal prosecutors on Thursday to more aggressively enforce marijuana laws, effectively threatening to undermine the legalization movement that has spread to six states, most recently California.
https://mobile.nytimes.com/2018/01/04/us/politics/marijuana-legalization-justice-department-prosecutions.html?referer=https://www.google.com/
take 5 hits of the new pot-drink your legal limit for your weight
attempt to drive
impossible
I’ve driven on acid.smack everything-no way on this legal combo
so it’s completely legal as they have no thc detection for current “last few hours” testing
‘The Obama administration in 2013 announced it would not stand in the way of states that legalize marijuana, so long as officials acted to keep it from migrating to places where it remained outlawed and keep it out of the hands of criminal gangs and children. Sessions is rescinding that memo, written by then-Deputy Attorney General James M. Cole, which had cleared up some of the uncertainty about how the federal government would respond as states began allowing sales for recreational and medical purposes.’
‘The Sessions Justice Department believed the Cole memo created a “safe harbor” for marijuana sales that are federally illegal, Justice Department officials said. Sessions in the memo called the Obama guidance “unnecessary.”
‘Sessions’ policy will let U.S. attorneys across the country decide what kinds of federal resources to devote to marijuana enforcement based on what they see as priorities in their districts. Nor is it clear how the memo might affect states where marijuana is legal for medical purposes. A congressional amendment blocks the Justice Department from interfering with medical marijuana programs in states where it is allowed. Justice officials said they would follow the law, but would not preclude the possibility of medical-marijuana related prosecutions.’
‘Sessions and some law enforcement officials in states such as Colorado blame legalization for a number of problems, including drug traffickers who have taken advantage of lax marijuana laws to illegally grow and ship the drug across state lines, where it can sell for much more.’
‘Threats of a federal crackdown have united liberals who object to the human costs of a war on pot with conservatives who see it as a states’ rights issue. Some in law enforcement support a tougher approach, but a bipartisan group of senators in March urged Sessions to uphold existing marijuana policy. Others in Congress have been seeking ways to protect and promote legal pot businesses.’
https://apnews.com/19f6bfec15a74733b40eaf0ff9162bfa
I’ve never liked the Obama era, wink wink nod nod stuff. We need to get this settled once and for all. Do states have the right or not? And if they do it opens up a bunch of other matters where the feds can butt-outsky. All these kinda-sorta, stroke of the pen, memo-legal arraignments do is keep money flowing toward the people who decide which laws to enforce and which ones they don’t. I say bah to that.
“the people who decide which laws to enforce and which ones they don’t.”
Exactly the problem. Arbitrary enforcement of the law is no law at all. When Trump campaigned on being a law and order candidate, it wasn’t just the usual lower-the-crime-rate stuff - he meant these shenanigans.
I like this.
Colorado has the most established infrastructure of marijuana grows, both legal and illegal. The greater the crackdown in other states (Texas, Florida) the more money flows here.
‘Sessions’ plan drew immediate strong objection from Republican Sen. Cory Gardner of Colorado, one of eight states that have legalized marijuana for recreational use. Gardner said in a tweet that the Justice Department “has trampled on the will of the voters” in Colorado and other states.’
They need to elect some libertarians instead of these people who want to pick and chose when to trample on the will of the voters.
It’s in the state Constitution here now. I hope for aggressive prosecutions in all states where recreational is still illegal. Nobody in Colorado can make real money at $1,600 a pound wholesale.
I build grows, I don’t ask questions, and growers only pay in cash
A couple of observations here:
1) While I am personally for Marijuana legalization, it is still a federal crime. So I don’t have a problem with the Feds enforcing it since I also support them enforcing immigration law and I try to be consistent.
What I would like to happen is to either a) Congress legalize it nationally or b) Congress remove it from Federal law and let states decide.
2) Here in California where it is now recreational, the taxes can top 30%. As we’ve learned with tobacco, that level of taxation and greed drives a black market so you are looking at illegal grows and drug trafficking possibly increasing to take advantage of a larger pool of customers.
3) Could this be a bargaining move? “Help us out with the illegals and maybe we’ll look the other way on the marijuana”
Should be interesting to see play out.
CHE - follow-up question for an earlier post. You said on 12/27:
“I jump over at least a couple of homeless people just sprawled out on the sidewalk now in West Hollywood on my daily run. I watch the tents line Sunset Blvd as I drive to work.”
Can you elaborate? I used to live in Weho but haven’t been back in a couple of years, surprised to hear the homeless problem is getting worse and moving up to Sunset. What part of Sunset are the tents? Thanks much for the intel, very interesting.
What I would like to happen is to either a) Congress legalize it nationally or b) Congress remove it from Federal law and let states decide.
Only b) is possible. Congress can’t overturn state laws.
There’s a difference with the feds saying a state can’t make something illegal versus making it legal. From what I understand the supreme court quietly accepted an obscure case on legalizing gambling on college games in New Jersey. It is said a big change in states rights regarding the feds could be in the cards.
States rights makes Mike a sad panda.
It will be interesting to see how tension between state and federal plays out as several blue states (NY, CA, and NJ) are contemplating changing their tax structure to bypass the $10k limit on SALT deductions. This is clearly against the intent of the tax law, but it will probably end up being legal. So now you’ll have all these wealthy filers who are gifting their state taxes and taking a deduction.
Lurker:
The tents are further to the east of West Hollywood in “regular” Hollywood on Sunset east of Fairfax. There’s also quite a tent city set up around the park near Santa Monica Blvd and Cahuenga and down at Poinsettia Park (south of SMB near La Brea) just south of the WeHo City limits..
In West Hollywood, we’ve always had a few local hobos but the numbers have been growing over the past couple of years - plus they’re getting more brazen harassing pedestrians and business owners. Now it’s to the point where I often see large piles their trash littering the sidewalk (places like La Cienega/Santa Monica!)
The quicker this gets to the Supreme Court, the better. For all we know, some White House insider (not Sessions) is cracking down deliberately, to create a “victim” who now has standing to sue.
My prediction: Colorado vs. United States. Rule 5/4 that in-state grow and consume is under state jurisdiction, but no shipping over state lines until Federal law legalizes.
Sierra Madre, CA Housing Prices Dive 16% YOY As California Housing Correction Expands
https://www.movoto.com/sierra-madre-ca/market-trends/
I checked SFR sales for my area in Oct-Dec 2017. Looks like they plunged 80% from 100 to 20. Normal for these months the last couple years is 100 sales.
I wonder if this will continue.
Check your neighborhood : househunt.com
“With all of its debt paid off, 432 Park’s owners appear content with selling off its remaining condos at deep discounts. A buyer from China under the name 432 Park Joy LLC is under contract to buy three units at the tallest residential tower in the world for a total of $91M, The Real Deal reports. Developers Macklowe Properties and CIM Group had listed units 92, 92B and 93B for a total of $120M.”
Time for dips to buy?
“Toronto Home Prices Fall for Seventh Month as Lending Tightens”
https://www.bloomberg.com/news/articles/2018-01-04/toronto-home-prices-fall-for-seventh-month-as-lending-tightens
Prices started falling long before any “lending tightening”
dow 30,0000! get on this gravy train you guys. just buy anything and watch it go up.
Can’t go wrong buying stocks these days. They are as much a sure thing as Bitcoin!
i wonder what % of the economy is based on inflating stock and home prices?
The fed can buy a rally while shorty has to get it right.
They are as much a sure thing as Bitcoin!
No doubt.
CENK UYGUR Chronicle of a loser (4 chapters) 2016 Election
https://www.youtube.com/watch?v=pPD0OlVFVYs
I wish I could have seen the look on his face when he realized that he was being thrown under the bus
He’s such a jerk. I remember him saying he had turned down terrific offers from mainstream media because he couldn’t/wouldn’t abide by being told what to say. Seems he should have taken the offer because he’s would have fit right in.
He’s such a jerk.
yep. and he’s so confused it’s amazing he makes it from one side of the street to the other.
The article is several years old. I was curious about monthly maintenance fees.
Parking is seldomly discussed.
https://www.nytimes.com/2014/10/26/realestate/in-new-yorks-luxury-apartments-amenities-are-costly-add-ons.html
I was talking about this a couple months ago. My area has a lot of Grade B with old surface lots. Open lot was free, covered parking was cheap, like $30. Now those complexes are charging for parking — it’s free money for them. And it’s a way for them to keep out the illegals and their 4-5 white vans/household.
How about a white van tax
Lester Hole of NBC Screws reporting a blizzard slams east coast. Just called it a massive blizzard. There is no blizzard.
Fake News
we r so rich cause stocks keep going up.all we need to do is inflate stock and homes and watch the cash roll in. let the folks overseas make our stuff.
Parts of the coast — for example the mid-Atlantic beaches — did get blizzard conditions. It didn’t last long and there wasn’t more than 5-6 inches accumulation, but there was enough wind and blowing snow to be dangerous.
“94,785,000 Not in Labor Force; At 62.9%, Labor Force Participation Stuck Near 38-Year Low”
https://www.cnsnews.com/news/article/susan-jones/no-records-set-august-number-employed-americans-drops-participation-rate
we i go into walmart I think of u broke @ss folks who missed out on a 10 year bull run.
Funkadelic — Hit It And Quit It (1971):
https://www.youtube.com/watch?v=EBXU2t4hodo
B.T. Express - DO IT (Til’ You’re Satisfied)
https://youtu.be/90QXhl95qP8
I’m looking for version of Whoa Is Me but can’t find it. Who wrote it? Donk Craterton And The Stampedes? OneOfMany And The Bedpan Band?
First time I heard that was from this (from the Cincinnati Public Library):
http://ew.com/article/1991/02/22/soul-hits-70s-didnt-it-blow-your-mind/
Wes Montgomery - Round Midnight
https://www.youtube.com/watch?v=MOm17yw__6U
Thelonious Monk Quartet - ‘Round Midnight
https://www.youtube.com/watch?v=-yg7aZpIXRI
Bill Evans, ‘Round Midnight
https://www.youtube.com/watch?v=3QwiTYBzU68
Check out the standup bass play in the last link. That’s my favorite of the three.
Greenwich Village Manhattan Housing Prices Crater 19% YOY
https://www.zillow.com/greenwich-village-new-york-ny/home-values/
goldilocks
we need to expand the feds balance sheet again so people have money to buy cheap imports.
Murphy, TX Housing Prices Crater 5% YOY
https://www.movoto.com/murphy-tx/market-trends/
if debbie dow goes up 100 points per day how long will it take to get to 30000?
Chumming?
december nfp comes in @ 148k , awful
u would think it would be great as retailers hire xmas help
Who needs a house out in Hackensack?
Is that all you get for your money?
https://www.youtube.com/watch?v=Ykeh0EkEXnc
Another day, another 100 point opening bell rally on the DJIA. You really can’t miss buying stocks in this kind of market.
This feels a hell of a lot like 1999/2000.