Pay Equality – 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

US Healthcare: no Bang for the Buck

David Posnett — Sat, 19 May 2018 22:36:07 +0000

Health care in the US is more expensive, by far, than anywhere else on this planet. It represents greater than 17.9% of the US GDP. Health spending is projected to grow 1.0 percentage point faster than Gross Domestic Product (GDP) per year over the 2017-26 period; as a result, the health share of GDP is expected to rise from 17.9 percent in 2016 to 19.7 percent by 2026. Other comparable developed countries pay much less:

The question is why are we so wasteful and what do we get for all this money. If you look at longevity as the overall measure of success for healthcare, we are not doing very well, as described in a recent article in the NY Times:

The above graph shows life expectancy over time compared to similar developed nations.

This shows life expectancy as a function of health spending per person.

So what are the proposed causes for this dramatic inefficiency? The authors propose many factors to explain the sudden up tick in health care spending around 1980. For example:

“suppliers marketed very costly technological innovations with gusto,”and they “found ready customers in hospitals, medical practices and other entities eager to keep up with rivals in the medical arms race.” The last third of the 20th century or so, was a fertile time for expensive health care innovation: Coronary artery bypass grafting, innovative drug treatments for H.I.V. for cancer and expensive NICU care for premature babies.

But innovation does not necessarily translate in to better outcomes. Almost no matter how it’s measured, longevity in the United States has not kept pace with that of other nations.

Another study, published in JAMA, found that even accounting for motor vehicle traffic crashes, firearm-related injuries and drug poisonings, the United States has higher mortality rates than comparably wealthy countries.

So here is the presumed bottom line.

“The lack of universal health coverage and less safety net support for low-income populations could have something to do with it. The most efficient way to improve population health is to focus on those at the bottom,” says Ms Glied from Columbia Univ. “But we don’t do as much for them as other countries.”

The effectiveness of focusing on low-income populations is evident from large expansions of public health insurance for pregnant women and children in the 1980s. There were large reductions in child mortality associated with these expansions. “Those reductions were much larger for poor children than for richer children,” Ms. Currie said.

In 1980 the United States spent 11 percent of its G.D.P. on social programs, excluding health care, while members of the European Union spent an average of about 15 percent. In 2011 the gap had widened to 16 percent versus 22 percent.

Slow income growth could play a role because poorer health is associated with lower incomes. “It’s notable that, apart from the richest Americans, income growth stagnated starting in the late 1970s,” Cutler said. “Social underfunding probably has more long-term implications than underinvestment in medical care.”

Read more here about how social programs can lead to increased longevity: Are better health outcomes related to social expenditure?

It has been known for some time that low income/wealth is associated with much decreased longevity:

as the income gap increases in the US, so does the disparity in life spans between rich and poor as reported in the NY Times
in the U.S., the richest 1 percent of men lives 14.6 years longer on average than the poorest 1 percent of men, while among women in those wealth percentiles, the difference is 10.1 years on average.
This eye-opening gap is also growing rapidly: Over roughly the last 15 years, life expectancy increased by 2.34 years for men and 2.91 years for women who are among the top 5 percent of income earners in America, but by just 0.32 and 0.04 years for men and women in the bottom 5 percent of the income tables.
U.S. tax and spending policy does relatively little, compared with its peers in the developed world, to reduce inequality and with the new tax policies enacted by our current government this will worsen.

In the NY Times (2014) Leonhardt and Quealy note that “The American Middle Class Is No Longer the World’s Richest”. The following interactive graph shows who many developped countries like Norway, Canada, Germany, Sweden, Netherlands are making gains for the lower 20th percentile of wage earners surpassing American incomes for this bracket. American incomes are losing their edge, except at the top:

It is this same bracket (the lower 20th percentile) that have such poor life expectancy dragging down the overall life expectancy for the entire country.

Finally, this study shows an interesting shift: since about 2004 the lowest quintile income group in the US is spending much less on healthcare on a per capita basis, than the highest income quintile. One of the authors remarks that “co-payments and deductibles have bent the cost curve. But it’s come at the expense of poor people and middle-income people.”

My conclusions:

efforts by the GOP to slash medicare will make things worse
the new tax law will make things worse by aggravating income disparity
advances in medicine benefit the health care industry and affluent Americans who have access to the newest treatments, but on average the population does not benefit as measured by life expectancy, for example.
How you vote may be a matter of life or death.

Women working in Trump’s White House only make $0.80 to the man’s dollar

David Posnett — Mon, 03 Jul 2017 23:45:40 +0000

Published 9h ago on July 3, 2017

by Marie Solis

President Donald Trump waves as he arrives on Air Force One

Source: Carolyn Kaster/AP

The country’s gender wage gap goes all the way to the White House, according to a new CNN analysis.

Using the findings from the White House’s annual report to Congress, which was released on Friday, the outlet found women working in President Donald Trump’s White House earn an average salary of roughly $83,000, while their male colleagues earn an average of roughly $104,000.

That disparity works out to women making just $0.80 to the man’s dollar, a pay gap falling just below the national average: As of April’s Equal Pay Day, women made $0.82 for every dollar earned by a man.

However, the White House’s pay gap problem isn’t specific to Trump.

In 2014, the Washington Post reported that then-President Barack Obama hadn’t yet succeeded in closing the gender wage gap in his White House, albeit a much smaller gap than Trump’s. Under Obama, women in the White House earned an average salary of $78,400 to men’s $88,600, adding up to a 13% wage gap, or $0.87.

Trump speaks along with daughter Ivanka during a video conference in the Oval Office in April.

Source: Pool/Getty Images

Still, a hallmark of Obama’s presidency was his dedication to solving the country’s gender wage gap problem. Just a little over a week into his presidency, Obama signed the Lilly Ledbetter Fair Pay Act, equal pay legislation named for a woman who discovered at the end of her 19-year career that she’d been paid less than her male colleagues all along. In 2014, Obama signed an executive order promoting fair pay and safe work conditions, including mandates for paycheck transparency and a ban on forced arbitration in cases of sexual harassment, gender-based discrimination or sexual assault.

In March, Trump revoked the latter Obama-era policy, just days before Equal Pay Day on April 4.

This move, along with Trump’s apparent animus toward other issues affecting women’s lives, means the wage gap could widen under the 45th president. In a December interview with Mic, Fatima Goss Graves, a senior vice president at the National Women’s Law Center, said it’s in Trump’s power to decide if he wants to close it.

“[You can either decide to] change the range of factors that really are leading to lower wages, or you can continue to lean into the things you know cause the problem in the first place,” she said. “That’s the question for the Trump administration: Are they on the side of equal pay [and equal rights] for women?”