7 ms·

There's no escaping this from states like NJ, CA, IL, MA, and NY. These states (of which I am a member of) are broke with pension obligations waiting to bankrup

There's no escaping this from states like NJ, CA, IL, MA, and NY. These states (of which I am a member of) are broke with pension obligations waiting to bankrupt the government. Taxes are already high both on income and property so there's nowhere to go there. They have old infrastructures and although the citizens are heavily taxed, government can't make improvements in large part because of lifetime pension obligations to a rapidly growing group of retirees - many of which have already moved to tax free states like FL. So these states are the vanguard in finding ways to collect more tax revenue any way they can. Sharing Economy companies are simply the easiest to harvest right now.

jacquesm 7y ago
No, sharing economy companies are breaking the law in interesting and creative ways and it has simply taken the states some time to catch up. That those states also have a pension obligation has nothing to do with them collecting taxes on corporations active in their territory.
- iscrewyou 7y ago
  Seriously. These corporations come up with all kinds of ways to not pay taxes and then people try to find a fault in the government or the system. Yet, when the government comes back to acquire those taxes, it’s still the government’s fault?
  - nichos 7y ago
    The government has been proven to be irresponsible with my money, I don't object to Ubers position here.
deleted 7y ago
[deleted]
akersten 7y ago
Do you have some numbers to share to support the hypothesis that pension plans will bankrupt these states without new taxes?
- toomuchtodo 7y ago
  Illinois: https://www.reuters.com/article/us-illinois-pensions/illinois-unfunded-pension-liability-climbs-to-1335-billion-idUSKBN1O62KC https://www.reuters.com/article/us-illinois-pensions/illinoi... (Illinois' unfunded pension liability climbs to $133.5 billion) https://www.policyed.org/pension-pursuit/pension-liability-state/map https://www.policyed.org/pension-pursuit/pension-liability-s... (PolicyEd: Interactive Map of Pension Liability by State and City) Illinois is an outlier, and is seriously in trouble, but most other states will be fine.
  - afterburner 7y ago
    Spread out over how many years?
    - deleted 7y ago
      [deleted]
  - nemo44x 7y ago
    To the point that the other states are rather wealthy, yes they'll be fine. My real question is what do these states do? Continue to raise taxes? Even the other states in question are losing high net worth tax payers to places like Nashville, Texas, Florida, Arizona, etc. Do the just restructure in bankruptcy and leave all these people hanging who are relying on their pensions to live on? Neither of these possible. I'm really at a loss at what these states should do.
    - toomuchtodo 7y ago
      States can't declare bankruptcy, and in the case of Illinois, public pension benefits are guaranteed by the state's constitution. I don't have an answer unfortunately, although I think often of possible solutions.
  - rsclient 7y ago
    Total pension liability (from your numbers): 133.5 billion There are 12.80 million people in Illinois, so the per-person liability is $10429 A typical pension is paid out over the course of about 20 years. The liability per person per year is $521 Put differently: the pension liability per year is 6.675 billion. Illinois rakes in about $45 billion per year in taxes. That's at most "awkward" to handle and at best "easy" and possibly even trivial.
nitwit005 7y ago
The idea that you should pay unemployment insurance and social security isn't something radical. It's the basics of how things are supposed to work across the US. If anything, it's surprising the states are being so slow to crack down on this stuff.
bcrosby95 7y ago
When compared to other states, CA has a middle of the road per capita budget. It's not much more than Washington - which actually has zero income tax. CA has a high income tax rate, but property taxes aren't that high - they're pretty average for the nation. And the effective property tax rate is even lower due to prop 13. You can actually search this on many property tax websites - on average the effective tax rate for property in some counties is less than half the actual property tax rate. California has huge budget problems whenever there is an economic downturn due to its heavy reliance on income taxes (which is due to prop 13), which is heavily reliant upon the stock market. This is why certain people love to talk about how its going to "fail" whenever this happens. Prop 13 does California wrong on so many levels. We're sacrificing our future via the additional perverse incentives it gives for NIMBYism, and unfairly overtaxing productive citizens via the income tax. The state really needs to develop a plan to sunset it.
- nemo44x 7y ago
  Yeah I've read that CA is fairly nervous about another big tech crash as so much of their revenue right now is related to IPO's and stock awards that are worth a lot.
  - novok 7y ago
    Laws like AB5 & the CCPA doesn't help them in that regard.
- microcolonel 7y ago
  Property taxes turn out to be a better way for states to do the bulk of tax collection. The focus on income taxes is probably a big part of why the property values in some of Cali are so insane.
  - nemo44x 7y ago
    That and interest rates. As rates fall property values will rise in proportion. A home’s value is what people that want to live there are willing to pay and can afford each month. So it either goes to the bank, the owner, or the tax collector.
Keverw 7y ago
Yep, I think the census next year is going to hit some states hard, losing both residents, federal funds and seats. United Van Lines did a study and NJ was the top moved out state. Not sure how you can compete with Florida though, when your state has high taxes and it's cold. If they make infomercials for both Florida and NJ or even OH... Obviously Florida would be the better choice. Warmer, less taxes, friendlier to businesses, world class cities, the top theme parks in the world, if you want to go on a cruise not that far from a port... and plus residents get discounts on theme parks even cruises. Then from my impression of places like NJ or NY people always seem in a hurry and sometimes even rude. While it seems like people from FL are more relaxed and happier. Plus since things are less industrial and more tech or done remotely it's easy to get up and leave than before. Got a hedge fund? Relocate to FL and then fire anyone that doesn't want to move with you. Miami sounds more appealing than Wall St. to some of the change makers, plus with the wealth tax idea that's being pushed and other stuff, what's the incentive to stay when you can vote with your feet? Plus it's not like New York is it's own country, so citizens there have 49 other choices they can move to. There was a recycling plant that had trouble getting approved in Los Angeles, even 10 years later. They relocated to Arizona and got approved in a single day. I think more people and companies should do that. Let these states lose out and fail, the states that make things better and easier will win. There CEO had much more patience than I'd have if things were moving that slow. Uhaul trucks leaving California cost more than heading back to California. So I think people are getting sick of states, and cities especially when they quit listening to people. California lessen the punishment for stealing, so more stores are being stolen from too sadly. Also they are tough on truck drivers, so some drivers rather just avoid California completely.
- cnst 7y ago
  I've talked to a partner at an IP law firm in Austin, Texas. They do a lot of business with the tech companies like Amazon, and wanted to hire a new attorney based in SV, since most of their work is done remotely with the SV office of Amazon, even though there's a local Amazon office down the street in Austin, too. Well, it turns out, if they'd have done so, they'd be required to pay taxes on the income of their whole partnership from most of their clients, because most of the companies they do business with are based in Cali, even though all the rest of their lawyers are based in Texas. Guess how they decided to proceed after receiving such advice from the state?
tnecniv 7y ago
Also in NJ, it's pretty well known that both businesses and individuals are flowing out of the state due to taxes when they are able. The main reason my parents moved south when they retired wasn't the weather but the fact that they couldn't retire how they wanted with the property taxes in this state.
- jdhn 7y ago
  So true. My parents live in Central Jersey, and their property taxes are probably going to top $12k this year. Just like your parents, they like living in the state, but at some point the fiscal situation just won't be tenable.
kevingadd 7y ago
Not sure how taxes are "already high" on property in CA when we have an absurd voter-passed amendment that specifically locks property taxes very low (prop 13).
deleted 7y ago
[deleted]

jacquesm 7y ago

No, sharing economy companies are breaking the law in interesting and creative ways and it has simply taken the states some time to catch up. That those states also have a pension obligation has nothing to do with them collecting taxes on corporations active in their territory.

iscrewyou 7y ago
Seriously. These corporations come up with all kinds of ways to not pay taxes and then people try to find a fault in the government or the system. Yet, when the government comes back to acquire those taxes, it’s still the government’s fault?
- nichos 7y ago
  The government has been proven to be irresponsible with my money, I don't object to Ubers position here.

deleted 7y ago

[deleted]

akersten 7y ago

Do you have some numbers to share to support the hypothesis that pension plans will bankrupt these states without new taxes?

toomuchtodo 7y ago
Illinois: https://www.reuters.com/article/us-illinois-pensions/illinois-unfunded-pension-liability-climbs-to-1335-billion-idUSKBN1O62KC https://www.reuters.com/article/us-illinois-pensions/illinoi... (Illinois' unfunded pension liability climbs to $133.5 billion) https://www.policyed.org/pension-pursuit/pension-liability-state/map https://www.policyed.org/pension-pursuit/pension-liability-s... (PolicyEd: Interactive Map of Pension Liability by State and City) Illinois is an outlier, and is seriously in trouble, but most other states will be fine.
- afterburner 7y ago
  Spread out over how many years?
  - deleted 7y ago
    [deleted]
- nemo44x 7y ago
  To the point that the other states are rather wealthy, yes they'll be fine. My real question is what do these states do? Continue to raise taxes? Even the other states in question are losing high net worth tax payers to places like Nashville, Texas, Florida, Arizona, etc. Do the just restructure in bankruptcy and leave all these people hanging who are relying on their pensions to live on? Neither of these possible. I'm really at a loss at what these states should do.
  - toomuchtodo 7y ago
    States can't declare bankruptcy, and in the case of Illinois, public pension benefits are guaranteed by the state's constitution. I don't have an answer unfortunately, although I think often of possible solutions.
- rsclient 7y ago
  Total pension liability (from your numbers): 133.5 billion There are 12.80 million people in Illinois, so the per-person liability is $10429 A typical pension is paid out over the course of about 20 years. The liability per person per year is $521 Put differently: the pension liability per year is 6.675 billion. Illinois rakes in about $45 billion per year in taxes. That's at most "awkward" to handle and at best "easy" and possibly even trivial.

nitwit005 7y ago

The idea that you should pay unemployment insurance and social security isn't something radical. It's the basics of how things are supposed to work across the US. If anything, it's surprising the states are being so slow to crack down on this stuff.

bcrosby95 7y ago

When compared to other states, CA has a middle of the road per capita budget. It's not much more than Washington - which actually has zero income tax. CA has a high income tax rate, but property taxes aren't that high - they're pretty average for the nation. And the effective property tax rate is even lower due to prop 13. You can actually search this on many property tax websites - on average the effective tax rate for property in some counties is less than half the actual property tax rate. California has huge budget problems whenever there is an economic downturn due to its heavy reliance on income taxes (which is due to prop 13), which is heavily reliant upon the stock market. This is why certain people love to talk about how its going to "fail" whenever this happens. Prop 13 does California wrong on so many levels. We're sacrificing our future via the additional perverse incentives it gives for NIMBYism, and unfairly overtaxing productive citizens via the income tax. The state really needs to develop a plan to sunset it.

nemo44x 7y ago
Yeah I've read that CA is fairly nervous about another big tech crash as so much of their revenue right now is related to IPO's and stock awards that are worth a lot.
- novok 7y ago
  Laws like AB5 & the CCPA doesn't help them in that regard.
microcolonel 7y ago
Property taxes turn out to be a better way for states to do the bulk of tax collection. The focus on income taxes is probably a big part of why the property values in some of Cali are so insane.
- nemo44x 7y ago
  That and interest rates. As rates fall property values will rise in proportion. A home’s value is what people that want to live there are willing to pay and can afford each month. So it either goes to the bank, the owner, or the tax collector.

Keverw 7y ago

Yep, I think the census next year is going to hit some states hard, losing both residents, federal funds and seats. United Van Lines did a study and NJ was the top moved out state. Not sure how you can compete with Florida though, when your state has high taxes and it's cold. If they make infomercials for both Florida and NJ or even OH... Obviously Florida would be the better choice. Warmer, less taxes, friendlier to businesses, world class cities, the top theme parks in the world, if you want to go on a cruise not that far from a port... and plus residents get discounts on theme parks even cruises. Then from my impression of places like NJ or NY people always seem in a hurry and sometimes even rude. While it seems like people from FL are more relaxed and happier. Plus since things are less industrial and more tech or done remotely it's easy to get up and leave than before. Got a hedge fund? Relocate to FL and then fire anyone that doesn't want to move with you. Miami sounds more appealing than Wall St. to some of the change makers, plus with the wealth tax idea that's being pushed and other stuff, what's the incentive to stay when you can vote with your feet? Plus it's not like New York is it's own country, so citizens there have 49 other choices they can move to. There was a recycling plant that had trouble getting approved in Los Angeles, even 10 years later. They relocated to Arizona and got approved in a single day. I think more people and companies should do that. Let these states lose out and fail, the states that make things better and easier will win. There CEO had much more patience than I'd have if things were moving that slow. Uhaul trucks leaving California cost more than heading back to California. So I think people are getting sick of states, and cities especially when they quit listening to people. California lessen the punishment for stealing, so more stores are being stolen from too sadly. Also they are tough on truck drivers, so some drivers rather just avoid California completely.

cnst 7y ago
I've talked to a partner at an IP law firm in Austin, Texas. They do a lot of business with the tech companies like Amazon, and wanted to hire a new attorney based in SV, since most of their work is done remotely with the SV office of Amazon, even though there's a local Amazon office down the street in Austin, too. Well, it turns out, if they'd have done so, they'd be required to pay taxes on the income of their whole partnership from most of their clients, because most of the companies they do business with are based in Cali, even though all the rest of their lawyers are based in Texas. Guess how they decided to proceed after receiving such advice from the state?

tnecniv 7y ago

Also in NJ, it's pretty well known that both businesses and individuals are flowing out of the state due to taxes when they are able. The main reason my parents moved south when they retired wasn't the weather but the fact that they couldn't retire how they wanted with the property taxes in this state.

jdhn 7y ago
So true. My parents live in Central Jersey, and their property taxes are probably going to top $12k this year. Just like your parents, they like living in the state, but at some point the fiscal situation just won't be tenable.

kevingadd 7y ago

Not sure how taxes are "already high" on property in CA when we have an absurd voter-passed amendment that specifically locks property taxes very low (prop 13).

deleted 7y ago

[deleted]