If you live in Hawaii, California, or New York, your state is costing you a lot of money. According to the Tax Foundation, in those states respectively, $100 will only buy you 84%, 86% and 87% of what you can get in an average cost of living state. Meanwhile, if you live in Mississippi, Arkansas, or Alabama, your dollar will last you much longer, with a buying power of 117%, 116% and 115% of average in those states respectively. If you're retired and living on a fixed income, the boost in purchasing power could make a major difference in your standard of living. Analysts from the Tax … [Read more...]
Here’s Who Benefits from New England’s High Taxes: It’s Not Who You Think
Residents of New England and nearby New York and New Jersey endure some of the nation's highest tax rates (not New Hampshire). With the capping of the State and Local Tax (SALT) deduction on federal taxes, the bad behavior of these states was revealed to everyone. You may think that the federal government and those who want to "tax the rich," are the real winners of the SALT cap, but that doesn't appear to be the case. The tax the rich crowd isn't so keen on taxing the rich when that means themselves. And the federal government is giving away far more in revenue than it's getting with the … [Read more...]
As Bankruptcies Rise, What’s Your Best Asset?
The NY Post reports that while bankruptcies are still nowhere near Great Recession levels, they are rising noticeably. John Aidan Byrne writes: New York state’s bankruptcy filings, for instance, have risen steadily the past three years, hitting 34,711 in 2018, up from 30,112 in 2016, according to the American Bankruptcy Institute (ABI), based on data from Epiq Systems. More consumers nationwide are falling behind on their payments and filing for bankruptcy to resolve overwhelming debt loads. And low unemployment, an uptick in average wages and the latest Fed interest rate cut have not … [Read more...]
Pensions, Unsurprisingly, Miss Their Mark
I have warned for years that public pensions are overestimating their future returns, and therefore are a giant source of debt for future taxpayers who will be forced to pick up the deficit. At the end of the fiscal year in June, median public pensions had missed their expected returns by 1.1 percentage points. Bloomberg's Martin Z. Braun reports: U.S. public pensions posted their weakest performance in three years, falling a percentage point short of their investment targets, and the prospect of rock-bottom interest rates and a trade-war induced recession could put a greater strain on … [Read more...]
This Money Market Fund is Paying 47 Times More than its Competition
Fidelity investments may be sparking a war among money market funds by offering a 1.91% yield on money in new brokerage and retirement accounts. That's 47 times higher than Fidelity competitor, TD Ameritrade, 10 times higher than Charles Schwab and 27 times higher the E*Trade. Vicky Ge Huang reports on Fidelity's move at AdvisorHub, writing: “I am not surprised to hear that Fidelity is offering better interest rates,” said Greg O’Gara, senior wealth management analyst at Aite Group. “They continue to try to reach out to their client base and prospects by offering superior product alternatives … [Read more...]
Luxury Buyers Race to Beat New NYC Taxes
As though New Yorkers weren't taxed enough already, New York City has imposed a new set of transfer taxes on properties selling for $2 million or more. Buyers raced to close their real estate deals to beat the taxes which could be up to 3.15% on deals. The number of luxury deals closed in June was record-breaking. Over $4.8 billion worth of property changed hands. The WSJ's Josh Barbanel reports: As the deadline to beat the tax increase neared, the buying frenzy only intensified. Of the 673 June transactions of at least $2 million, 351 closed in the final seven days. That week alone accounted … [Read more...]
Are Munis a Shelter from the Storm? Not so Fast
The Wall Street Journal reports that Americans in high tax states like New York and California are jumping into municipal bonds to shelter their investments from taxation. Maybe these are residents who can flee from the high tax states they call home, as so many others have. Now that the federal government has stopped subsidizing these states' high taxation, residents are feeling the full burden of their states' big-spending ways. The Journal reports: Investors in high-tax states like New York and California are piling into municipal bonds this year, fueled in part by the 2017 tax overhaul … [Read more...]
Can You Guess Where Financial Firms Are Going When they Flee the Northeast’s High Taxes?
If you answered Palm Beach County in Florida, you're right. When tax reform capped state and local tax deduction from federal returns, financial firms and their employees were exposed to the naked truth about the high state taxation in the Northeast. With governments in New York, Massachusetts, and Connecticut drowning in obligations, taxes aren't coming down soon. That's why so many financial firms and employees are voting with their feet and heading for low tax Florida instead. Many wealthy retirees have already made this sound financial choice, and it's no surprise to see profit-making … [Read more...]
This Small State is Beating its Neighbors in a Debt Race. That’s Not Saying Much.
Despite being surrounded by the two states ranked by Moody's as having the worst debt service to state revenue ratios in the country, Rhode Island managed to come in 18th highest. Connecticut was worst, and Massachusetts just behind in second place. Is there a lot of work to be done in Rhode Island? Absolutely, but in New England, 18th worst is cause for celebration where debt is concerned. Rhod Island certainly has its weak points. Woonsocket is much deeper in debt than the State's Public Finance Management Board recommends. The Newport Daily News reports: “At the state level, the debt of … [Read more...]
Can You Put the American Dream on Your Credit Card?
According to reporting from The Wall Street Journal, Americans are increasingly turning to debt to finance what many consider typical parts of the middle-class American lifestyle; cars, college, houses, and healthcare. AnnaMaria Andriotis, Ken Brown and Shane Shifflett report: Consumer debt, not counting mortgages, has climbed to $4 trillion—higher than it has ever been even after adjusting for inflation. Mortgage debt slid after the financial crisis a decade ago but is rebounding. Student debt totaled about $1.5 trillion last year, exceeding all other forms of consumer debt except … [Read more...]
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