• Tag Archives California
  • Senate Tax Debacle: Certain Pass-Through Entities Face Marginal Tax Rates Over 100% Under Current Bill

    As the House and Senate continue to try to reconcile their two versions of a tax plan, the taxing structure for pass-through entities (s-corps, LLC’s, etc.) continues to be somewhat controversial, if not completely nonsensical. As we pointed out last week, the Senate bill somewhat randomly chose to exclude pass-through entities organized as family trusts from tax cuts which would ultimately leave them on the hook for much larger tax bills due to the elimination of other deductions. It’s unclear whether this bizarre exclusion was just an oversight or an intentional political hit on an easy target that no one in Washington DC would dare defend publicly: rich families organized as trusts.
    Now, a new note from the Tax Policy Center lays out some scenarios whereby the marginal tax rate for high-income pass-through entities could soar to over 100%. Of course, while two rational people can debate the impact of a ~40% tax rate on a person’s desire to work, we’re almost certain that a taxing structure that takes more than 100% of your marginal income will be a slight disincentive. Here’s an example of how it works from the Wall Street Journal:
    Consider, for example, a married, self-employed New Jersey lawyer with three children and earnings of about $615,000. Getting $100 more in business income would force the lawyer to pay $105.45 in federal and state taxes, according to calculations by the conservative-leaning Tax Foundation. That is more than double the marginal tax rate that household faces today.
    If the New Jersey lawyer’s stay-at-home spouse wanted a job, the first $100 of the spouse’s wages would require $107.79 in taxes. And the tax rates for similarly situated residents of California and New York City would be even higher, the Tax Foundation found. Analyses by the Tax Policy Center, which is run by a former Obama administration official, find similar results, with federal marginal rates as high as 85%, and those don’t include items such as state taxes, self-employment taxes or the phase-out of child tax credits.

    This post was published at Zero Hedge on Dec 11, 2017.


  • Global Warming Causing California Wildfires?

    Believe it or not, now the Global Warming crowd is trying to claim that the California wildfires are being caused by none other than Global Warming. ‘As global temperatures continue to rise, scientists say the risk of extreme fire seasons across the West is rising, too.’ Anyone who has ever visited the Red Wood Forest in California stands in awe of the grandeur of the place. However, to the shock of many, the redwoods are nearly indestructible. They have evolved to withstand fires. That means, over millions of years, wildfires in California have existed long before humans were even there. The Global Warming people just never both looking at the facts.
    Armstrong Economics

    This post was published at Armstrong Economics on Dec 9, 2017.


  • Tax Bill May Spark Exodus From High-Tax States

    The following is a summary of our recent podcast, “Exodus – The Major Wealth Migration,” which can be listened to on our site here on on iTunes here.
    It’s looking increasingly likely that we’ll see the GOP tax bill pass in the near future. Prepped for signing by the end of this year, the bill is sure to have sweeping effects on all taxpayers, especially those in high tax states.
    Consider Dan White at Moody’s: Taxation Shift Spells Trouble for Underfunded States
    ‘(Eliminating the state and local tax deduction) could help on the margins to drive people from those states to lower tax states because their burdens are going to increase significantly,’ White said. ‘What’s more, it’s going to make it more difficult during the next recession for states to increase taxes without being burdensome to the underlying economy.’
    Many of the Rich Will Pay Under New Tax Plan
    If we take the example of a high-net-worth individual living in California and making $1 million a year, that person’s state taxes amount to $102,000. If that person owns a $1.5 million home, property taxes would be around $27,000. As the new plan eliminates mortgage interest deduction above $500,000, this person would lose the ability to deduct roughly $20,000 in interest expenses.

    This post was published at FinancialSense on 12/05/2017.


  • 150,000 Flee Los Angeles As Wildfires Rage – “We’ll Be Fighting This All Week”

    The gate to nowhere. Home destroyed. Now gas line is burning. #VenturaFires pic.twitter.com/3HUR68Urhc
    — Sara Sidner (@sarasidnerCNN) December 6, 2017

    In what sounds like a replay of the devastating fires that killed dozens of people and torched a broad swath of California wine country this past summer, at least five discrete fires barreled across Southern California with extreme speed, torching more than 65,000 acres as firefighters struggled to contain the simultaneous infernos.
    The first blaze started at about 6:25 p.m. Monday in the foothills near Thomas Aquinas College in Santa Paula, a popular hiking destination. It grew quickly to more than 15 square miles in the hours that followed, consuming vegetation that hasn’t burned in decades, Ventura County Fire Sgt. Eric Buschow said, according to CNN.
    Powerful Santa Ana winds and extremely dry conditions have fueled the wildfires, according to the Washington Post, adding hundreds of millions – if not billions – of dollars in damage to what has already been a devastating year for fires. The winds that caused the fires were part of the season’s longest and strongest wind event – driving down from the desert and mountains into the city of Los Angeles.

    This post was published at Zero Hedge on Dec 6, 2017.


  • GOP tax plan will be a bad hombre for the California housing market: National Association of Realtors warns that prices can fall by 8 to 12 percent if tax plan is approved.

    It seems like a lot of people are tripping over themselves regarding the GOP tax plan. For California, the housing cheerleaders always trumpeted the massive amount of tax deductions you got when buying a ridiculous crap shack. I always found this to be absurd. You usually got ‘free market’ thinkers on the economy but then suddenly, wanted massive government support when they bought their expensive home. In the Bay Area a crap shack will cost you $1.5 million if you even want to have a parking spot within walkable distance. So it is no surprise that the GOP tax plan doesn’t give two seconds of thought as to what is good for California. And good just means on what side of the dinner table you are sitting at. Frankly, the rest of the country subsidizes the crazy housing market in California and other expensive states so it never made sense to have a mortgage interest deduction of up to $1,000,000 when the typical house in the U. S. costs $200,000. In regards to housing, the GOP tax plan will not help California housing values.
    Subsidizing expensive California
    There is some irony that San Francisco, a city that touts to be progressive and open to all is so incredibly expensive that only the elite can afford to live there. Surely you can see the cognitive dissonance in that? We want to help you so long as you stay far and away from our expensive NIMBYism enclave. An area where making $100,000 a year will confine you to living with roommates and eating Ramen from your tech cubicle.

    This post was published at Doctor Housing Bubble on Dec 5, 2017.


  • California Residents Increasingly Ditching Their Massive Tax Bills And Unaffordable Housing For Las Vegas

    Los Angeles residents have apparently had just about enough of their city’s excessive home prices, unaffordable rents, crushing personal and corporate tax rates, overly burdensome regulations, polluted air, etc. and are increasingly leaving for a better life in Sin City. As Los Angeles Times columnist Steve Lopez puts it, “the rent steals so much of your paycheck, you might have to move back in with your parents, and half your life is spent staring at the rear end of the car in front of you.”
    As Jonas Peterson points out, his family made the move from LA to Las Vegas in 2013 and were able to double the size of their house while lowering their mortgage payment all while enjoying the added benefits of moving from one of the most over-taxed states in America to one of the lowest taxed.
    Las Vegas is one of the most popular destinations for those who leave California. It’s close, it’s a job center, and the cost of living is much cheaper, with plenty of brand-new houses going for between $200,000 and $300,000.
    Jonas Peterson enjoyed the California lifestyle and trips to the beach while living in Valencia with his wife, a nurse, and their two young kids. But in 2013, he answered a call to head the Las Vegas Global Economic Alliance, and the family moved to Henderson, Nev.

    This post was published at Zero Hedge on Dec 4, 2017.


  • San Diego Continues Desperate Attempt To Control Hepatitis A Outbreak

    San Diego is desperately trying to control a Hepatitis A outbreak brought on by the homeless problem plaguing the state of California. The city has now opened the first of three giant tents meant to contain the outbreak of the deadly virus.
    The first of three industrial-sized tents to house the homeless as part of the city’s efforts to contain a hepatitis A outbreak. The outbreak itself stems from the deplorable conditions people were living in on the streets – mainly, the fecal matter that is left from those who live on the street. Of course, the government isn’t going to climb off the backs of their residents in California, instead, they will continue to raise taxes and create more homeless people while desperately and frantically trying to stop the problems that their overbearing government has caused.
    About 20 people made their way to a bunk bed Friday in the tent that will house 350 single men and women. Two other giant tents will open later this month – one specifically for families and one for veterans. The tents will house a total of 700 people with an attempt to keep them from defecating on the street and spreading the Hepatitis A virus.
    More than 3000 people are homeless in San Diego, and risk contracting the disease which has killed 20 people so far. The city had to divert $6.5 million budgeted for permanent housing to fund the operation of the tents for seven months. The tents will provide an array of services from mental health care to housing navigators. But the city still faces an acute housing shortage for the poor. Faulconer has earmarked more than $80 million in stolen (taxpayer) funds to address the problem. So the city wants to fix poverty by taking more from earners and creating more poverty. Bravo, California.

    This post was published at shtfplan on December 4th, 2017.


  • THE NEXT TECH BOOM IS ABOUT TO UNFOLD HERE…

    Everyone’s heard the story about the government’s promise to spend $1 trillion on fixing America’s aging critical infrastructure. But there’s another big money story that few investors know of…
    Trump’s trillion-dollar pledge won’t come close to fixing our infrastructure. It’ll take $3.6 trillion to make this happen. And in the midst of this infrastructure crisis, one little-known company has launched an artificial intelligence coup that could save us billions.
    Consider the dire straits of a massive network of critical infrastructure that industries, the environment and human lives all count on, every minute of every day:
    S. dams are failing from coast to coast: 15,500 of our 90,500 dams now a high-hazard potential for public safety and the economy and it will take $60 billion to fix them. 180,000 people were recently evacuated in California because of fears that the largest dam in the U. S. would collapse. Pipelines have caused almost 9,000 significant accidents in only 30 years, hitting us with $8.5 billion in damages, killing hundreds and injuring thousands. The U. S. spends almost $3 billion every year just cleaning up spills in our waterways. The over 140 oil refineries in the U. S. are potential disasters waiting to happen, with more than 500 accidents since 1994, and explosions killing and threatening millions with fatal toxins.

    This post was published at The Daily Sheeple on DECEMBER 4, 2017.


  • Eliminating the State and Local Tax Deduction Is a Terrible Idea

    The tax “reform” currently being discussed in Washington is mostly a political exercise for politicians who can use the process to extract more campaign contributions from supporters, and punish non-supporters. The actual tax burden imposed on Americans overall will change little.
    The proposed elimination of the deduction for state and local taxes (SALT) is an excellent illustration of how the tax reform is really about playing political games. Forever in pursuit of “revenue neutral” tax reform, the GOP is simply turning to the elimination of the SALT deduction so it can raise federal revenues, and this allows for a tax cut for some other well-heeled special interest group. Using bizarre “logic,” supporters of the deduction’s elimination claim that an increase in the federal tax burden will somehow lower state and local taxes – some day. Why? They imagine that if they raise federal taxes for people in states with high taxes (i.e., California, New York) then the majority of voters in those states will then be clamoring for a cut in state and local taxes. The GOP also relies on the tired claim that that a tax deduction (e.g., the home mortgage interest deduction) “subsidizes” those who claim the exemption. But only in the Orwellian world of Washington doublespeak is a tax break a “subsidy.”

    This post was published at Ludwig von Mises Institute on 11/29/2017.


  • There Have Been 698 Earthquakes In California Within The Past 30 Days

    Why is the west coast shaking so violently? According to the latest data from Earthquake Track, there have been 698 earthquakes in California within the past 30 days. By the time that you read this article, that number will undoubtedly have changed. In recent days I have felt such an urgency to write about the seismic activity on the west coast, and I am quite concerned that so few people seem to be paying attention to what is happening.
    As I have covered previously, scientists tell us that when seismic activity begins to escalate the probability of having a major earthquake jumps significantly. Over the past month there have been more mainstream news articles about earthquake swarms in California than I have seen in years, and the magnitude 4.6 earthquake that rattled Monterey County earlier this month made headlines all over the world.
    And it isn’t just the U. S. section of the ‘Ring of Fire’ that seems to be awakening. I have written about Mt. Popocatepetl down in Mexico several times recently, and on Friday it erupted three more times…
    Spectacular eruptions have been seen Southeast of Mexico City as Mexico’s Popocatepetl volcano spewed smoke and ash high into the air.
    The volcano had three eruptions Friday, one of which reached two and a half miles into the sky.

    This post was published at The Economic Collapse Blog on November 26th, 2017.


  • DiMartino Booth Warns Pressure On US Households Is Intensifying

    Behind the rosy economic headlines, consumer stresses have continued to build and are likely to worsen…
    Is the U. S. economy enjoying a honeymoon, or is this merely a hiatus? Although this isn’t a subject of discussion among most economists, there will be both good and bad associated with three hurricanes and the California wildfires.
    In early summer, the economic data began to surprise to the upside and the momentum has gained traction. The Citigroup Economic Surprise Index recently hit its highest level of the current cycle.
    But there are signs that beneath the veneer of healthy headlines, household stresses have continued to build and are likely to worsen as losses related to the storms begin to seep into future months’ data.

    This post was published at Zero Hedge on Nov 26, 2017.


  • 100 billion reasons to have non-reportable assets

    In early March 1938 in a dusty corner of the Arabian desert, Max Steineke finally had the breakthrough he was hoping for.
    Steineke was the chief geologist for the California Arabian Standard Oil Company (CASOC), a venture owned by what we know today as Chevron.
    And he hadn’t had a lot of success despite years of effort.
    Steinke was convinced that massive oil reserves were beneath the sands. He just couldn’t find any.
    His prized oil well, what was called Dammam #7, had been riddled with mishaps, accidents, and delays, and it was costing the company a LOT of money.
    Steinke was about to be shut down when, finally, on March 4, the well started gushing. And Saudi Arabia was never the same.

    This post was published at Sovereign Man on November 20, 2017.


  • “Beyond Resistance” – Soros, Pelosi Headline Left’s Biggest Dark Money Conference

    A secretive three-day conference where big money liberal donors are plotting the next steps of the “resistance” will be headlined by Friday speeches by billionaire George Soros and Democratic House Minority Leader Nancy Pelosi, according to internal documents obtained by the Washington Free Beacon.
    The Democracy Alliance, a donor club of deep-pocketed liberal donors that each pledge to direct hundreds of thousands of dollars in funding to approved left-wing groups, descended on California’s posh La Costa Resort on Wednesday morning for its fall donor summit. The group continued its tradition of secrecy, promising all members and guests of the summit their participation would “remain confidential.”
    The first page of the conference agenda, which was obtained by the Washington Free Beacon and can be viewed in its entirety below, lays out “participation guidelines,” explaining that the Democracy Alliance is a “safe place” for donors and activists to meet.
    Guests are instructed not to share members’ names with the press and not to post to any social media sites, to contact Democracy Alliance if “the media or a blogger” contacts them, and to “refrain from leaving sensitive materials out where others may find them.”
    This latter directive was ignored.

    This post was published at Zero Hedge by Brent Scher and Joe Schoffstall via FreeBeacon.com, Nov 17, 2017.


  • Weekend Reading: You Have Been Warned

    Investors aren’t paying attention.
    There is an important picture that is currently developing which, if it continues, will impact earnings and ultimately the stock market. Let’s take a look at some interesting economic numbers out this past week.
    On Tuesday, we saw the release of the Producer Price Index (PPI) which ROSE 0.4% for the month following a similar rise of 0.4% last month. This surge in prices was NOT surprising given the recent devastation from 3-hurricanes and massive wildfires in California which led to a temporary surge in demand for products and services.
    Then on Wednesday, the Consumer Price Index (CPI) was released which showed only a small 0.1% increase falling sharply from the 0.5% increase last month.

    This post was published at Zero Hedge on Nov 17, 2017.


  • California Residents On Edge After A Swarm Of 10 Earthquakes Hits Near The San Andreas Fault

    Is the San Andreas Fault starting to wake up? On Monday, a ‘swarm’ of 10 significant earthquakes struck Monterey County, California. The largest was a magnitude 4.6 earthquake that could be felt all the way over in San Francisco. Of course this comes at a time when other portions of ‘the Ring of Fire’ are starting to awaken as well. For example, just yesterday I wrote about the alarming eruption of Mt. Popocatepetl that just took place down in Mexico. For decades the west coast of North America has been relatively stable compared to the rest of the Ring of Fire, but now that is changing.
    So should those living along the west coast be on alert? Without a doubt, the shaking that happened on Monday definitely got a lot of attention…
    A 4.6-magnitude earthquake rattled Monterey County on Monday and was felt more than 90 miles away in San Francisco, officials said.
    The quake hit at 11:31 a.m. about 13 miles northeast of Gonzales, near Salinas, and was followed by nine smaller aftershocks, with the largest measuring magnitude 2.8, said Annemarie Baltay, a seismologist with the U. S. Geological Survey in Menlo Park.
    Some experts are trying to assure us that we have nothing to be concerned about, but others are claiming that an earthquake swarm such as this ‘dramatically increases the likelihood of a major quake in California’. And not too long ago, the director of the Southern California Earthquake Center did admit the following…

    This post was published at The Economic Collapse Blog on November 14th, 2017.


  • Is Fed Chair Nominee Jay Powell, Count Dracula?

    A Date with Dracula
    The gray hue of dawn quickly slipped to a bright clear sky as we set out last Saturday morning. The season’s autumn tinge abounded around us as the distant mountain peaks, and their mighty rifts, grew closer. The nighttime chill stubbornly lingered in the crisp air.
    Like Jonathan Harker’s journey to Transylvania roughly 120 years ago, we also traveled eastward. Our route, however, did not take as through Vienna and Budapest. Nor did it take us upward into the Carpathian Mountains.
    Instead, we traversed along the foothills of the San Gabriel Mountains, passing from the Angeles National Forest to the San Bernardino National Forest. Then we climbed upward to the mile-high Oak Glen village, up above the outermost rim of the Los Angeles Basin. We had finally outrun Southern California’s seemingly endless sea of concrete.
    At this mountain hamlet, we didn’t witness a single stoplight or franchise drive-thru. Billboards, transmission lines, rail corridors, and graffiti art did not blight the countryside. The built milieu hardly scarred the natural landscape.
    There was only a windy narrow mountain road and a smattering of apple orchards, which filled the gentle slopes that nestle between the larger and steeper topographic terrain. Upward we climbed, to where the pine woods canopied across the roadway and the sparse clouds danced to the glint of the sunlight.
    Like Harker, our destination had a very specific intent. We had a date with Dracula

    This post was published at Acting-Man on November 11, 2017.


  • “Homeless Explosion”: Tech Boom, Surging Rents Creating Homeless Crisis On America’s West Coast

    America’s liberal left coast states count themselves among the most adamant supporters of controversial pieces of legislation intended to support low-income families. From their stunningly high income tax rates to their $15 minimum wage mandates, states like California and Washington are leading the charge on implementing Bernie’s socialist agenda.
    Of course, some of the biggest advocates of that socialist agenda are the billionaire leaders of Silicon Valley’s largest tech companies…which is precisely why it’s so ironic that it’s the “tech boom” being enjoyed by those billionaires that has resulted in surging housing prices and what SFGate described earlier today as a “homeless explosion pushing West Coast cities to the brink.”
    Housing prices are soaring here thanks to the tech industry, but the boom comes with a consequence: A surge in homelessness marked by 400 unauthorized tent camps in parks, under bridges, on freeway medians and along busy sidewalks. The liberal city is trying to figure out what to do.
    “I’ve got economically zero unemployment in my city, and I’ve got thousands of homeless people that actually are working and just can’t afford housing,” said Seattle City Councilman Mike O’Brien. “There’s nowhere for these folks to move to.”

    This post was published at Zero Hedge on Nov 6, 2017.


  • Commuters & Computers: Mapping America’s Megaregions

    From California’s Bay Area to the highly-integrated Great Lakes Economy, megaregions are a dominating aspect of human geography and commerce. It should be no surprise then, that 85% of corporate head offices in the US and Canada are overwhelmingly concentrated in the core cities of great megaregions.
    We tend to think of cities as individual economic units, but as they expand outward and bleed together, defining them simply by official jurisdictions and borders becomes difficult. After all, as Visual Capitalist’s Nick Routley notes, many of the imaginary lines divvying up the country are remnants of decisions from centuries ago – and other county and state lines exist for more counterintuitive reasons such as gerrymandering.
    What if there was a more data-driven approach to examine America’s urban networks?

    This post was published at Zero Hedge on Nov 4, 2017.


  • Trump’s Tax Reform

    These days, US President Donald Trump is pushing his number one agenda of his term in office – major tax reform. Trump has been meeting with some of his own party senators seeking approval for the planned tax reform he is hoping will be signed by the end of December at the latest for a Christmas present. The negotiations on the details are in the final stages. If the reform is very real indeed, and make no mistake about it, this would be a tremendous triumph for Trump and for the nation as a whole. Trump has the potential to take the United States counter-cyclical (cycle inversion) that would actually put a tremendous amount of pressure on the rest of the world.
    There are some who are concerned about removing the tax deduction for state income taxes. Deducting state income taxes from your Federal taxes has been quietly talked about behind the curtain for some time. It was also one factor in my own relocate out of New Jersey to Florida. The elimination of the deduction for state and local taxes will be a major death blow for the high taxed states like California, New York, New Jersey, Connecticut etc..

    This post was published at Armstrong Economics on Nov 3, 2017.


  • The Rising Separatist Movements in Europe-Eastern Europe

    There are many in Spain who just outright disagree with any right of Catalonia to be independent. History, culture, language, nothing really matters. Some have said it is the Spanish Constitution and all of Spain should vote to let Catalonia leave or stay. All of that said if Madrid had just allowed a fair referendum then whatever the vote was should have stood.
    This is all about saving the EU and not Spain. It was the oppression that probably made others vote to leave. All of Spain cannot vote against one region. London did not vote on Scotland and neither did Toronto against Quebec. California has people pushing to separate and that is not a right to be decided by me in Florida.

    This post was published at Armstrong Economics on Nov 1, 2017.