economics – R&R – Reachout and Rebuild

New York: Most Unequal State in the Nation!

David Posnett — Mon, 14 Nov 2022 22:18:11 +0000

A new report from the Institute on Taxation and Economic Policy (ITEP) recently found that New York State is home to the highest concentration of extreme wealth in the United States. New York State also has the greatest income inequality in the United States. By both of these measures, New York is the most unequal state in the nation.

The Fiscal Policy Institute’s latest brief, Inequality in New York and Options for Progressive Tax Reform, details ITEP’s findings as they apply to New York State, reviews additional research and data on New York State’s income and wealth inequality, and lays out their implications for New York State tax policy.

Key findings include:

New Yorkers worth over $30 million collectively own $6.7 trillion in wealth. These ultra-rich New Yorkers are just 0.4 percent of the state population.

New York’s ultra-rich also hold about one-fifth of the total wealth held by all ultra-rich Americans — the highest concentration of wealth in any state.

Of the $6.7 trillion held by ultra-rich New Yorkers, ITEP estimates that $3.1 trillion consists of unrealized capital gains. Much of this wealth will never be taxed under current law.

New York State tax implications include:

New York’s current tax system, taken as a whole, is regressive: the wealthy pay about the same combined state and local tax rate as the bottom 40 percent.

Because of the substantial overlap between high income earners and owners of extreme wealth, increasing the progressivity of the existing Personal Income Tax would help to address extreme inequality.

At a minimum, the state should not allow the current PIT rates on high earners to expire, as they are currently set to, in 2027.

New York can further address extreme inequality, and increase the overall progressivity of its tax system, through a number of tax policy options, including:

Increasing tax rates on long-term capital gains for high-income taxpayers

Taxing unrealized capital gains on a mark-to-market basis for wealthy taxpayers

Increasing taxes on business profits, such as those earned through pass-through entities such as LLCs, and targeting the profit-shifting of multinational corporations

Taxing inherited wealth, or fixing the estate tax by lowering the exemption threshold and eliminating step-up in basis

Revising the state constitution to permit a direct wealth tax

This will be relevant after December 6, 2022, when “Invest in Our New York” establishes its strategy/agenda for the legislative session.

Geraldine R. Maslanka

How to Climb out of the Financial Rut in NY State

David Posnett — Sat, 06 Feb 2021 20:16:07 +0000

On Feb. 5th R&R heard a presentation by Rebecca Saletan and Nick Lyndon on “The Invest in our New York Act”. It is a package of 6 bills for the State of NY. Together they are proposed to raise more than $50 billion/year in sorely needed revenue:

TAXING HIGH INCOMES

Progressive Income Tax S2622: Creates a tax system where New Yorkers pay a higher rate if they earn significantly more money.RAISES $12-18 BILLION

Right now, individuals with incomes between $21,400 and $1,077,550 are all taxed at roughly the same rate of 6.5%. Higher earners should pay a higher rate. This bill would raise the tax rates on the top 5% of income-earners ($300,000 and above).

Sponsored by Senator Robert Jackson and Assemblymember Demond Meeks

2. Capital Gains Tax A3152:

Taxes income from investments like stocks same as wages.RAISES $7 BILLION

Rich people make much of their income from investments like stocks, not from their jobs. The federal government taxes investment income at a much lower rate than wages. New York can fix this by adding a tax to investment income that’s equal to the tax break the rich are getting from the federal government.

Sponsored by Senator Gustavo Rivera and Assemblymember Ron Kim

TAXING WEALTH

3. Heirs’ Tax S3462 :

A progressive tax on large sums of inherited wealth.RAISES $8 BILLION

Many rich people also make their money from inheriting enormous sums. They can make up to $5 million in a year through inheritance and pay no tax on it. Inheritances of less than $250,000, family homes up to $2 million, money from pensions or retirement funds, and family farms will not be affected.

Sponsored by Senator Jabari Brisport and Assemblymember Michaelle Solages

4. Billionaires’ Tax:

An additional tax on billionaires, and constitutional amendment to allow a wealth tax. RAISES $23 BILLION IN THE FIRST YEAR, $1.3 BILLION PER YEAR THEREAFTER

New York already has a wealth tax: it’s called a property tax. Homeowners pay it every year. But if you own a massive stock portfolio, it is not taxed. This tax would treat billionaires’ gains in wealth as income, and these increases would be taxed at income tax rates. Additionally, a constitutional amendment would allow the state to tax large sums of intangible wealth—i.e., stocks, bonds and company ownership— in the future.

Sponsored by Senator Jessica Ramos and Assemblymember Carmen De La Rosa

TAXING CORPORATIONS AND THE FINANCIAL SECTOR:

5. Wall Street Tax : A small tax on Wall St. financial transactions.RAISES $12-29 BILLION

Unlike other major financial centers like London and Hong Kong, New York doesn’t place any tax on financial transactions. The financial industry is the state’s largest industry: it makes up 30% of our economy. This bill places small taxes on trades of stocks, bonds and derivatives; a similar tax on stocks existed in NY until 1981.

Sponsored by Senator Julia Salazar and Assemblymember Yuh-line Niou

6. Corporate Tax S2833: A bill to repeal the Trump tax cuts, by restoring taxes on the profit a corporation makes each year. RAISES $9 BILLION

In 2017, Trump’s tax cuts reduced the federal corporate profit tax rate from 35% to 21%, and cut taxes on real estate businesses by 20%. New York can end these tax breaks in our state so that businesses pay the same tax as they did three years ago.

Sponsored by Senator Brad Hoylman and Assemblymember Anna Kelles

There is a detailed discussion with over 50 slides which is well worth reading (and beyond this summary):

https://docs.google.com/presentation/d/1MX3-gtlQzBi0nRxNmfTKcziy7YjfB4Y6jnT5Gj-8jVo/edit?usp=sharing

Trump’s Economic Fallout

David Posnett — Mon, 05 Oct 2020 15:50:37 +0000

Guestwords in the East Hampton Star: Trump’s Economic Fallout for Suffolk County and Long Island

By John Tepper Marlin and Steven Newman October 1, 2020

President Trump’s three main economic initiatives have been radical 2017 cuts in taxes (at the expense of states and localities), unprecedented high tariffs on Chinese goods, and “deregulation” of federal agencies (entailing rejection of science-based programs). These initiatives have turned Washington, D.C., and the country upside down. How has this worked out? Following are some outcomes.

Mr. Trump’s denial of Covid-19 gives him ownership of its economic impact: The virus is not just an act of God. Mr. Trump’s knowing denial of its threat and refusal to recommend wearing masks immediately was a betrayal of his country. The pandemic is a national challenge just as much as the 9/11 attack on the World Trade Center towers. An early science-based national response would have greatly reduced the huge negative economic impact.

The corporate tax cuts did not deliver on business investment: The main idea behind the 2017 Tax Act was to reduce the top federal tax rate on corporations from 35 percent to 25 percent. At the last minute, the law, which skipped customary hearings and staff analysis, took the tax rate down to 21 percent, even lower than its major advocates had asked for. Mr. Trump claimed the law would close tax loopholes, about which his newly uncovered tax returns show him to be informed. But few loopholes were closed by the 2017 law. He said businesses would invest the money and thereby create jobs. But after a few months, corporations switched to using the money to buy back their stock, which made a negligible contribution to job creation.

The impact of a fiscal change on the economy is measured by the “fiscal multiplier” — the change in gross domestic product for each dollar of change in tax cuts or spending. A 2015 Congressional Budget Office analysis concludes that fiscal multipliers are more successful for spending programs than tax cuts, for lower-income than for higher-income taxpayers, and for periods of recession than for booms. A widely cited fiscal multiplier for corporate tax cuts is only 0.32, compared with multipliers of 1.71 for an increase in food stamps, 1.55 for extending unemployment benefits, and 1.44 for infrastructure investment.

Tax cuts for individuals: The Tax Act substantially reduced tax rates for the top personal income brackets. When new money gets into the hands of average people, they spend it, because they have real needs that are not being met. This is not true for the very rich. Nevertheless, Mr. Trump argued that tax breaks should go to highest-income taxpayers. Policies that increase unemployment benefits, child credits, and food stamps are not only more equitable, they also generate more jobs.

The Tax Act’s cap on the SALT deduction hit New York State hard: The lowering of the corporate tax rate from 35 percent to 21 percent in 2017 was paid for in part by a radical cap on the deductibility of state and local taxes (SALT) at $10,000 per taxpaying unit, whether single or married and filing jointly. This cap was deliberately targeted at higher-tax blue states. New York State has suffered the most, as indicated by the July jobs data, the latest we have. Jobs were down from a year earlier in every one of the nation’s 49 metro areas with a 2010 census population of 1 million or more. They are below the level of five years ago in more than half of these metro areas.

The five worst-hit metro areas in the country over five years include all three of the large New York State metros — Rochester, Buffalo, and New York City (which takes in a wide swath including Westchester, Nassau, and Suffolk Counties, northern New Jersey, and a piece of Pennsylvania). The SALT cap was a shock to state and local officials, who are scrambling to address lost tax revenues, and one of the hardest-hit cities is New York, which, unlike the federal government, must raise new taxes, cut spending, or borrow. That’s a choice between higher taxes, fewer employees, or postponed fiscal stress. Cutting the quality of services, from sanitation and health care to schools, will affect real estate values just as much as high taxes. Coupled with new interest in less-dense living to avoid exposure to Covid-19, this is making the East End of Long Island a beneficiary. But Suffolk can’t afford to let the engine of its prosperity falter.

The cap on the SALT deduction encourages moves by higher-income residents: The cap on the SALT deduction has made it more attractive and urgent for higher-income individuals to move to lower-tax states and communities. Blue-state residents have been moving to red states and will presumably seek to raise standards of education and other government services in their new locations. One silver lining is that it doesn’t take very many people moving from a populous blue state to increase electoral support for quality education in a small red state. Residents of New Jersey and New York are moving to Florida, while Californians are moving to Idaho and Nevada. Residents of New York City are moving to less-dense communities like East Hampton. Activism for better-quality services may generate some surprises in future elections.

Stressed states and localities need cash and are not getting it: This fiscal year has caught nearly every government by surprise. The CARES Act gave the Federal Reserve the right to lend to states and localities, but the Fed is acting as if the facility is intended as a last resort, for municipalities that can’t obtain private financing. But the municipal bond industry and many state laws favor long-term investment, not financing an operating deficit. Forcing municipalities to cut spending while the coronavirus crisis is still at our door is reverse Keynesian of the kind that exacerbated the worst years of the Great Depression.

Fortunately for the Town of East Hampton, the supervisor, Peter Van Scoyoc, and the town board have been able to keep the town functioning on a steady basis, but concentrating federal aid on businesses rather than local government means less fortunate communities face bleak options.

Tariffs on Chinese goods: Mr. Trump’s radical high-tariff moves are being paid not by Chinese producers but by American retailers and consumers, especially the fashion industry, which is suffering a knockout blow. China’s response to the U.S. tariffs has been to divert key supplies to Europe and has created shortages in this country — for example, in personal protective equipment and many medicines. China has meanwhile retaliated with tariffs on U.S. farm products. The relief program seems to have been concentrated on large agribusinesses, leaving small farmers without aid.

Deregulation has created new risks: The president’s science-denying efforts to roll back environmental, pharmaceutical, and other safety regulations have increased risks in each of these areas and have hampered a national response to the Covid-19 pandemic.

Over all, the economy has fared poorly. Yet the stock market has had an astonishingly good run. The main reason is that some corporations have been buying back their stock and the Federal Reserve has been flooding the financial markets with liquidity to help banks make loans and stave off business bankruptcies. Historically, the total return on stocks in the S&P 500 since 1947 has been higher under Democratic presidents, 10.8 percent per year, versus a rate under Republicans of 5.6 percent per year. The top performance was under Presidents Clinton and Obama, while the most negative was under Nixon and George W. Bush.

It’s a case of an open spigot for big business and a parched earth for states and local governments and nonprofits. This has left New York City in a financial crisis, but East Hampton has been relatively unscathed.

John Tepper Marlin has lived in Springs since 1981. He was for 20 years a federal government economist and the chief economist to three New York City comptrollers. Steven Newman, a resident of Queens, was chief of staff and first deputy to two New York City comptrollers.

Lee Zeldin’s Record

David Posnett — Thu, 11 Jun 2020 17:00:39 +0000

No matter where you live — Montauk or Manorville, Smithtown or Shirley, Patchogue or Port Jefferson — we all want our communities to thrive. To do that, we need a representative who puts our needs first: safe drinking water and well-paying jobs. Affordable healthcare and prescription drugs. A tax plan that works for working families. And decisions based on science, not donations. Although Zeldin says he’s fighting for us, his voting record says otherwise. Zeldin serves the needs of big business and the powerful few, not the working families in his district.

Check out the issues here. For example healthcare.

NY-01 deserves a representative who puts us first.

Photo Courtesy of Sean P. Mills Photography

VOTES DON’T LIE. FOLLOW US ON SOCIAL.

Facebook: @LeeZeldinRecord | Twitter: @ZeldinRecord

Website: https://www.leezeldinrecord.com/

Lowe’s or Home Depot? Your call.

David Posnett — Wed, 10 Jun 2020 01:59:22 +0000

Marvin Ellison, is the CEO of Lowe’s

Lowe’s announced Wednesday that it would assist minority-owned businesses with $25 million in grants to support efforts to relaunch the American economy.

Lowe’s is dishing out the funds to help small businesses, especially home improvement professionals, in need of masks, personal protective equipment and other supplies to operate safely. The new funds follow $340 million of support the home improvement retailer provided for Covid-19 response activities in the first quarter.

By contrast in regard to Home Depot (this from 2019):

Home Depot sought to distance itself from billionaire co-founder Bernie Marcus after he pledged to back President Trump’s bid for re-election in 2020.

Calls to boycott the retailer took off as news spread that Marcus told The Atlanta Journal-Constitution that he plans to support Trump’s bid for another term.

“If you plan on buying a hammer, wood, or ANY home improvement items from Home Depot, you may as well send donations DIRECTLY to trump’s 2020 campaign,” read one tweet under the hashtag #BoycottHomeDepot.

By Betsy Cagan | President| Bargaining Power Inc., New York, NY 10011, bargainingpower.com

When the Forgotten Remain Forgotten, no one is Secure

David Posnett — Sun, 26 Apr 2020 20:05:48 +0000

The Covid-19 pandemic is putting the deepening class divide in America into stark relief.

Four new classes are emerging.

The Remotes: These are professional, managerial, and technical workers – an estimated 35% of the workforce – who are putting in long hours at their laptops, Zooming into conferences, scanning electronic documents, and collecting about the same pay as before the crisis. Many are bored or anxious, but they’re well off compared to the three other classes.

The Essentials: They’re about 30% of workers, including nurses, homecare and childcare workers, farm workers, food processors, truck drivers, warehouse and transit workers, drugstore employees, sanitation workers, police officers, firefighters, and the military. Too many Essentials lack adequate protective gear, paid sick leave, health insurance, and childcare, which is especially important now that schools are shuttered. They also deserve hazard pay. Their vulnerability is generating a wave of worker activism at businesses such as Instacart, Amazon, Walmart, and Whole Foods. Mass-transit workers are organizing work stoppages. Trump’s Occupational Safety and Health Administration has the legal authority to require private employers provide essential workers with protective gear. Don’t hold your breath.

The Unpaid: They’re an even larger group than the unemployed – whose ranks could soon reach 25%, the same as in the Great Depression. Some of the unpaid are furloughed or have used up their paid leave. So far in this crisis, 43% of adults report they or someone in their household has lost jobs or pay, according to the Pew Research Center. An estimated 9.2 million have lost their employer-provided health insurance. Many of these jobs had been in personal services that can’t be done remotely, such as retail, restaurant, and hospitality work. But as consumers rein in spending, layoffs are spreading to news organizations, tech companies, and consumer-goods manufacturers. The unpaid most need cash to feed their families and pay the rent. Fewer than half say they have enough emergency funds to cover three months of expenses, according to a survey conducted this month by Pew. So far, government has failed them, too. Checks mailed out by the Treasury last week are a pittance. Extra benefits could help, but unemployment offices are so overwhelmed with claims that they can’t get money out the door. Loans to small businesses have gone largely to big, well-connected businesses, with banks collecting fat fees. On Wednesday, Republican Senate majority leader Mitch McConnell said he is opposed to any further federal aid to state and local governments, suggesting states declare bankruptcy instead. Which means even less money for unemployment insurance, Medicaid, and everything else the unpaid need. The resulting desperation is fueling demands to “reopen the economy” long before it’s safe. If it comes down to a choice between risking one’s health and putting food on the table, many will take the latter.

The Forgotten: This group includes everyone for whom social distancing is nearly impossible because they’re packed tightly into places most Americans don’t see: prisons, jails for undocumented immigrants, camps for migrant farmworkers, Native American reservations, homeless shelters, and nursing homes. While much of New York City is sheltering at home, for example, more than 17,000 men and women, many already in poor health, are sleeping in roughly 100 shelters for single adults. All such places are becoming hotspots for the virus. These people need safe spaces with proper medical care, adequate social distancing, testing for the virus and isolation of those who have contracted it. Few are getting any of this. Not surprisingly, the Essentials, the Unpaid, and the Forgotten are disproportionately poor, black, and Latino and they are disproportionately becoming infected. An Associated Press breakdown of available state and local data showed close to 33% of those who have died from Covid-19 are African American, despite representing only 14% of the total population in areas surveyed. The Navajo Nation already has lost more people to coronavirus than have 13 states. Four of the 10 largest-known sources of infection in the United States have been correctional facilities. These three groups aren’t getting what they need to survive this crisis because they don’t have lobbyists and political action committees to do their bidding in Washington or state capitals.

The Remotes among us should be concerned, and not just because of the unfairness of the Covid-19 class divide. If the Essentials aren’t sufficiently protected, the Unpaid are forced back to work earlier than is safe, and if the Forgotten remain forgotten, no one is secure. Covid-19 will continue to spread sickness and death for months, if not years to come.

This Tuesday, April 28 at 11 a.m. Pacific Time/2 p.m. Eastern Time, I’ll be having a live discussion with Stacey Abrams about the future of the Democratic Party and voting rights in the age of coronavirus. You can tune in here.

Stay Safe, Robert Reich, Inequality Media P.S.

D. Posnett: Note for D. Trump and L. Zeldin: best to consider all of these 4 groups when attempting to rebuild the economy. Just one sick group with rampant COVID-19 will bring us all down. Viruses don’t really care about who you are. Celebrity or a jailbird, homeless or a billionaire, it’s all the same to them.

“I am a Tariff Man” and Credit for the Stock Market

David Posnett — Wed, 26 Dec 2018 21:49:12 +0000

US stock markets fell sharply on Tuesday as investors lost faith in a trade truce between the US and China that had been negotiated by Donald Trump at last week’s G20 summit.

On September 8th, 2018 I wrote:

“It is astounding that Republicans, like Lee Zeldin, are claiming credit for a soaring stock market. They will mention the tax give-away to businesses (thus increasing profits), the abolition of regulations and hard-nosed trade wars with allies and others. A bull run based on borrowed money and a soaring national deficit seems dangerous. Add the inflation expected from the trade war. Accordingly, the Warren Buffett Indicator predicts a stock market crash in 2018! Perhaps Zeldin and company, should also be credited with the crash, when it happens?”

Well guess what, it is happening!

These are the headlines all over the internet “Dow dives 600 points to below 22,000, S&P 500 enters bear market — worst Christmas Eve ever“

Now Mr. Zeldin, please own up and claim the credit that is rightfully yours. Your pal, Donald Trump, knows this is bad news.

“Trump’s aides have described the president as obsessed with the stock market’s performance, which he sees as a numerical validation of his personal performance. Trump spent much of late 2017 and early 2018 cheering big gains, which he claimed were stimulated by his presidency — in particular, his moves to cut taxes and roll back regulations.” Lee Zeldin followed his lead.

As recently as July 2018, Zeldin took credit in the Riverhead Local: “With our markets hitting historic highs, retirement and college savings accounts are as well, making it a little easier for Long Islanders who invest with the hopes of providing a better life for themselves and their families.”

He also liked to tweet about this:

As stocks drop, Trump fears he’s losing his best argument for reelection. So should Lee!

New York’s Suffolk County Economy: Not so Hot?

David Posnett — Sat, 08 Sep 2018 18:34:14 +0000

Representative Lee Zeldin likes to claim that he has contributed to a “booming” economy resulting in jobs in his district (the eastern part of Suffolk county).

Lets examine this for a minute.

First, jobs

This is the graph of unemployment since the housing crisis (the last major recession) in 2008. While unemployment came down from 10% to just under 5% under Obama, it went to just under 4% under Trump. 5/6 of the recovery (83%), as measured by reduced unemployment, occurred during the Obama years and 1/6 (17%) of the recovery occurred under Trump.

Similar numbers apply to Suffolk county. But what is the job growth in Suffolk county, compared to the rest of the state of New York? Well, it is nothing to brag about. For instance, job growth between Dec 2016 and Dec 2017 on Long Island (Nassau & Suffolk) was 12,500 jobs representing 0.9% job growth. Compared to the rest of the state or to NY City those are measly results: For NY State there were 156,800 new jobs representing 1.6% job growth over the same time period. And if you assess job growth for the period of Dec 2014 through Dec 2017 (the period that Zeldin has been in office), it is 0.934 %. By comparison job growth during the prior 4 years (when Tim Bishop was in office), was 1.425% (Suffolk county total employment numbers).

If job growth had been average on Long Island (equal to the NY State average), we would have had 22,220 new jobs between Dec 2016 and Dec 2017, not 12,500. The shortfall: 22,220 minus 12,500 = 9,720 jobs are in fact jobs we could have had, if we had just “average” job growth. Those are 9,720 jobs we lost.

Second, taxes.

Voters are not stupid. The republican tax cuts benefited primarily businesses and the super rich. The average person in Suffolk county might see a difference in either direction by a few hundred dollars for their federal taxes. The big issue, however, is SALT (State and Local Tax) deductions. These are now no longer fully deductible. And we won’t see the effects until 2019. Here is a simple calculation. If my NY State taxes are 10,000 and my local taxes (realestate/school taxes) about 15,000, for a total of 25,000 SALT deductions, I can still deduct 10,000, according to the new Republican tax plan, so I will have to pay taxes on the remaining 15,000. At a tax rate of 30% that is about $5000 additional taxes. Our taxes in Suffolk county will therefore rise substantially, specially in communities in Western Suffolk where real estate taxes are high. Zeldin tried to weasel out of this, but in the end he supported the Rep. tax bill and did not fight for his constituents. Amazing that he is now listing the new tax law as one of his achievements! Thanks Lee!

Third: Wages

According to the U.S. Bureau of Labor Statistics’ most recent data, average weekly wages in Suffolk and Nassau are close to the national average of $1,109 per week: Suffolk $1,217, Nassau $1,242. But importantly wages have been stagnant and not growing. Slow wage growth indicates that the U.S. economy has not yet fully recovered.

This graph shows lagging employee pay since 2010 while corporate profits are soaring!

From: “Paychecks Lag as Profits Soar, and Prices Erode Wage Gains” NY Times.

Wage stagnation in Suffolk county is real. For instance average weekly wages grew by 0.4% between the 2nd quarter of 2016 and 2017. That compares to 2.3% growth in New York State and 3.2% growth nationally. Suffolk county was ranked 315th in a national survey of comparable counties. This does not compare well with other NY State counties:

Monroe, N.Y.	92
Bronx, N.Y.	114
Kings, N.Y.	148
Oneida, N.Y.	156
Dutchess, N.Y.	168
Erie, N.Y.	189
Orange, N.Y.	189
Westchester, N.Y.	196
New York, N.Y.	215
Queens, N.Y.	215
Richmond, N.Y.	215
Broome, N.Y.	231
Onondaga, N.Y.	247
Saratoga, N.Y.	282
Albany, N.Y.	310
*Suffolk, N.Y.*	*315*
Rockland, N.Y.	336
Nassau, N.Y.	339

Fourth: the stock market

It is astounding that Republicans, like Lee Zeldin, are claiming credit for a soaring stock market. They will mention the tax give-away to businesses (thus increasing profits), the abolition of regulations and hard-nosed trade wars with allies and others. A bull run based on borrowed money and a soaring national deficit seems dangerous. Add the inflation expected from the trade war. Accordingly, the Warren Buffett Indicator predicts a stock market crash in 2018! Perhaps Zeldin and company, should also be credited with the crash, when it happens?

The party of “fiscal hawks” has become a joke. They can not claim to be fiscally conservative or responsible. The national debt now equals $176,000 for each tax payer in the US. Watch the dizzying numbers here! We all know what comes next: sanctimonious statements from Rep. lawmakers about how we need to cut Medicare, Medicaid, Social Security! Oy vey.

Relevant addenda:

1) my friend writes:

It is infuriating that Trump’s only accomplishment was to inherit a strong economy from Obama.

Cynical Republicans then gave a huge tax cut to the wealthy and a little one to the middle class. All conventional economic theory says that that will provide some fiscal stimulus for the economy through at least 2018, but at the cost of ballooning deficits and the inevitable Republican calls to cut Medicare and Social Security. Why are such simple economic ideas so hard to convey to the public?

2) An interesting piece in the NYT demonstrates how essential wages are. Jobs per se, paying so little that you can not survive on them, will not solve the problem of poverty.

Zeldin Supports GOP Shenanigans

David Posnett — Mon, 16 Jul 2018 16:56:01 +0000

Published as Letter to Editor, The East Hampton Star

Fiscal Chicanery

July 10, 2018

Dear David,

If you are under any illusions about congressional Republicans’ intentions to undermine the financial security of American families, just take a look at their new budget plan. Barely six months after passing a huge tax cut for corporations and the wealthy that swelled federal deficits by almost $1.5 trillion over the next 10 years, the Republican-controlled House Budget Committee issued a plan on June 17 that bemoans the “irresponsible imbalance” of the federal budget.

With stunning hypocrisy, the document states, “The federal government is spending more than it takes in. This increasing disparity is largely due to mandatory . . . spending, which includes safety-net programs like Medicare and Social Security. . . .” The plan then proposes to cut Medicare spending by $537 billion through partial privatization.

This is fiscal chicanery, pure and simple, and Lee Zeldin is fully on board with it. In November, let him know you are not on board with it. Vote for Perry Gershon, Democrat, and you will be voting for a representative who will work for real tax reform that helps middle class families and small-business owners, rather than tax reform that further lines the pockets of the 1 percent and large corporations.

Sincerely,

CAROL DEISTLER

Local Economy Dependent on Immigrants

David Posnett — Fri, 25 May 2018 14:24:38 +0000

Recent reports describe increased round up of latinos. Along with suspected “bad guys” ICE is sweeping up many more innocent undocumented workers. This was highlighted by the latest Trump visit to Long Island and Lee Zeldin’s cheer leading. Read more here and here.

Here is the flip slide however: the Long Island Farm Bureau is begging Zeldin to help with temporary work visas to keep their farms open. Landscapers, pool companies, roofers, house cleaners, deck builders, construction crews are absolutely reliant on Latino workers. Here is a relevant article which was published in March 2018.

From: the Southampton Press

BY MICHAEL WRIGHT

For many business owners on the East End, immigrant workers from Central America and South America have become the indispensable backbone of their workforce.

Many firms employ immigrant labor, and some say it’s because of their work ethic.

Business owners across East End trades this week said that if newly aggressive federal deportation policies targeting undocumented immigrants overreach, the effect on the local workforce could threaten their businesses’ ability to operate—and could even drag down the local economy as a whole over time.

Owners and employees of a cross-section of medium-sized businesses in the residential development industry—construction, landscaping and residential painting companies with between 15 and 40 full-time employees—all of whom live in Southampton or East Hampton, spoke this week about their concerns.

None would speak on the record by name, for fear of both legal fallout and becoming the focus of public anger in such a volatile climate, but said that the view of the immigrant community’s importance to the local community is often misunderstood or underestimated by others.

Each of the business owners said that the bulk of their employees are Latino immigrants. Some acknowledged that they are often not certain about a worker’s status, since New York State does not require an employer to verify legal residency of an employee when they file W-2 or 1099 forms linked to a tax identification number. Others said they are aware the majority of their workforce are not legal residents.

But all said that every employee on their crew, documented or not, has a tax ID number or state-issued work permit and pays the full complement of state and federal taxes that any legal resident would pay, and are covered by workmen’s compensation insurance. They said that most other medium or large local companies like theirs have similar arrangements with their employees.

Each also said that, apart from the economic firestorm that would consume their industry if large numbers of immigrants were taken from, or left, the local community, they see most of their employees as upstanding members of the local community: family men, homeowners, devout church-goers and consumers.

Seeing The Need

Most, but not all, of the business owners spoken to said they support Donald Trump and his tough stance on immigration enforcement. They do so in large part because they say they see the impact of companies that, unlike theirs, employ undocumented workers off the booksmaking it difficult to compete with them in the marketplace.

Those who said they support the president’s approach are confident—or at least hopefulthat the administration’s policies would not cost them the most critical components to their business.

“As a business owner, I see both sides of it,” a Southampton-based painting company owner said. “I do the right thing in terms of taxes and insurance, so I have a certain amount of animus toward the guys I see who aren’t doing the right thing and are charging much less and taking business from me.

“But I also see the need,” he added, with a slight sigh. “We created what we have here, and now we need [immigrant workers] to sustain it. It’s hard for me to say what should be done. Except, I guess, I know what needs to be done: The guys who want to work and are paying their taxes and keeping out of trouble, they should be allowed to stay. But they should definitely go after the bad guys.”

Another business owner echoed the sentiment that tougher immigration enforcement should apply only to violent or repeat criminals, not law-abiding people, and said his immigrant employees do, too.

“These are honest, hard-working guys—that is not who they’re going to go after,” a Southampton landscape company owner said of his impression of federal immigration authorities. “They’re only going after the ones who are killing, and the gang members. My guys understand that what the president is talking about is the criminals. And they want the criminals out too.”

Business, Not Greed

Asked why their crews are made up of mostly, if not entirely, immigrant workers, every employer offered a slight variation of the same sentiment: Not because they are cheaper, but because they are the best workers. “White guys, especially the young ones, don’t really want to work all that hard, and when there’s waves they don’t want to work at all, so they just don’t show up,” said one. “I’ve had white guys, black guys, Spanish guys, Russian guys, Polish guys, Irish guys. The Spanish guys show up to work every day, and they work hard. They would work 60 or 70 hours a week, seven days, if they could.”

Each told a series of very similar anecdotes about their travails as employers in finding and hiring non-immigrant workers.

“I started banging nails as soon as I got out of college, and I’d hire my buddies from high school,” recalled a high-end construction company owner based in East Hampton Town. “They’d be smoking pot in the port-apotties, doing blow in the office trailer, or they wouldn’t show up. Then, one year, I hired two Colombian guys. They showed up for work, they didn’t drink—and eventually my all-American crew became an all-immigrant crew.” “I remember my dad’s workers when I was a kid: They were all white, and even then I could tell they were the bottom of the barrel—but that was all you could get back then,” said the painting company owner. “I’ve had two American guys work for me, and they weren’t worth a darn. I get five or 10 Spanish guys looking for jobs every day—nobody of any other race or color has even called for a job.”

A Cottage Industry

Immigrant workers are more than just an expedient business solution to the need for more and more labor in the local economy, one of the businessmen said. They were the foundation that allowed it to rise to a new labor-intensive stratosphere of elegance, ornateness and complexity.

The painting company owner offered that, in the last two decades, the immigrant labor market, particularly among companies not following costly taxation and workman’s comp requirements, allowed the residential development market to grow at an exponentially faster rate and evolve in more labor-dependent ways than it would have otherwise.

“The spec house market was completely dependent on that,” he said of companies staffed by off-the-books immigrant employees. “You take the standard 6,000-square-foot spec house: I have to charge $100,000 to paint that house. But [a spec builder] gets them done for $40,000, because he uses the guys that are paying off the books. If that wasn’t there, all that spec building in Bridgehampton and Water Mill, and all over, that would never have happened.”

Going a step further, the painter said that if the robust supply of immigrant workers were removed or substantially diminished, the demands of the current market could not be met, and that attempts to keep up would likely, over the years, force economic contraction, as services like caring for intricately sculpted landscapes and seemingly endless renovations and expansions of existing homes become more and more expensive.

“Eventually,” he said, “even the rich people are going to say it’s not worth it.”

A Catch-22

The employers labored to cast aside a common misconception about undocumented workers: that they are paid substantially less than legal residents and citizens for the same jobs, and that they do not pay taxes.

Each said their immigrant workers typically make the standard wage for the jobs they do. They acknowledged that there are companies dodging the system but said that most of the recognizable names in the development-related trades in this region are following the letter of the law in regard to employees whose immigration status is clouded.

“These guys take deep pride in paying taxes,” a construction company owner said of his employees. “They want to play by the rules, desperately. If they could pay $10,000 or $15,000 to be able to apply [for legal residency] tomorrow, they would do it in a second. They would buy health insurance in a second—if they could. And they are strong and healthy, they eat well, they work hard and are in shape. They would be paying into the system, not taking from it.”

In 2013, the Social Security Administration issued a report on “unauthorized immigrants” that estimated undocumented but on-the-books workers were paying about $12 billion a year into the Social Security program alone. The report pointed out that the vast majority of those workers would never be eligible to receive the benefits of the program later in life like citizens who paid the same amount in taxes would. Additionally, undocumented residents get no tax refunds.

Three employees of one of the business owners who sat in the company’s office on a recent Friday to explain how they came to be part of the massive undocumented workforce, for their part, said that they are happy to pay taxes and would be willing to pay fines or fees for their past immigration violations if it would give them a path to legal residency. Two said they have already spent many thousands trying to find such a path, and in some cases lost tens of thousands more to unscrupulous attorneys who took their payments up front, in cash, and then vanished.

“I tried to come here legally first,” said Jose, a construction worker. “My brother got here by applying. My seven brothers, we all applied. Only one got a visa.” Jose, who is 29 and a native of Ecuador, said that in his hometown he could work for his father’s masonry businessmaking about $35 a month. “I make more than that in an hour now,” he said.

Another of the workers, an Ecuadorian immigrant named Gallo, said that he pays more than $20,000 a year in taxes and workman’s comp insurance. In 2006, after being arrested by immigration agents while visiting Niagara Falls, he paid an attorney $35,000 to help him apply for legal residency. The man simply never filed the application and vanished with his money.

Since then Gallo has reported annually to an immigration court judge to show that he is fully employed and paying taxes. He worries now, however, that if he reports to the court again, he could be seized and deported. “It’s a Catch-22,” said his boss, who said several employees fear they are in a similar bind. “They’re scared to go to the immigration court like they’ve been doing, to show that they’re doing things properly. But if they don’t go, then they’ll get a deportation warrant put on them. So they could get deported if they don’t go—but if they do go, they could still get deported.”

Two of the three men own homes and have young children who are U.S. citizens. They say that in recent weeks they have grown scared of their future in the United States, even though they have seen no actual evidence of deportations from the community.

One, named John, a former Colombian national soccer team member, said that he worries that if he or he and his wife were to be deported, their mortgage would go into default and be seized by a bank—the tens or hundreds of thousands of dollars already invested in it simply lost.

His son is an American citizen. When he was 3 he was diagnosed with leukemia and relies on medicines now that he could likely not get if the family left the United States together.

“He has to stay here because he has to keep getting his medicine—if I had to leave, what would become of him,” John said. “My son, he is 10. He tells me all the time, ‘Daddy, be careful.’”

Comment:

If you want an emetic, take a look at the vitriol in the comments section of the original article, with comments by anonymous people with telling names like “SlimeAlive”. DP