Details of possible New York shutdown emerge
New York State government could shut down Tuesday at 12:01 a.m. if the state legislature doesn’t approve Gov. Paterson’s latest “extender” by then. Extenders are those weekly provision the state has operated under since the April deadline for a new budget went by. No extender, no way to pay the bills.
Paterson’s last extender included over $700 million in health care spending cuts. Including those “new” cuts in a bill to extend the old budget was an unprecedented, controversial move. A desperate measure for a desperate time, the governor said.
Lawmakers reluctantly went along with him, but as this week ends, the governor is proposing $300 million in cuts to mental hygiene and human services in his next extender, and lawmakers are sounding less compliant.
So, theoretically, it could happen. HOW it would take shape is beginning to emerge. Anonymous sources told the AP that agencies were being prepped in a conference call yesterday. Today, agency memos are beginning to circulate in Albany. The Times Union blog, Capitol Confidential, posted a DOT memo, and readers are responding with memos from other departments — DOH, Labor, DEC and others.
I’ll be talking with our Albany reporter, Karen DeWitt first thing during the 8 O’clock Hour Monday morning to see what’s up as the week begins.
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The time is coming to recall all our Legislators and have a little heart to heart with them.
It is really unfortunate that the people who are hurt the most are the people who can afford it the least.
On a tangential note, has anyone paid attention to the fact the estate tax has expired for 2010 and that it is a good year for billionaires to die? That’s right, there will be absolutely NO TAX on the estates of anyone who dies this year. And I can’t think of a time that we could use the revenue more. This is not just George Bush’s fault Congress had a chance to fix it but didn’t.
I know, I know, Bret why do you always have to argue?
Knuckle- taxes have already been paid on that money, taxes you and I probably can’t even imagine. Why is it right to double or triple tax money just because someone worked hard, built a very successful enterprise of some sort and then had the audacity to want to leave it to his kids? Why is the “the Gov’t” entitled to one red cent of that money that taxes have already been paid on? It rather like the way we’re taxed on the money received in an income tax refund. The money was withheld incorrectly, returned and counted as income the next year? What actually should have happened is the gov’t should have paid you interest on that money. That would be taxable.
Friends, let me ask you- is anyone else just totally disgusted with our legislature? This is just a game to them and it doesn’t matter to them if the pawns are lost. What matters is re-election so they can stay in power. Here’s an idea- boot them all out, every last one. I don’t care who you put in, there’s a better chance they’ll act responsibly for at least a few years than these clowns currently in office will.
Regardless though Knucklehead is correct those in the most need will get hurt the worst by this sort of thing particularly if it impacts unemployement benefits.
Estate tax; The kids basically won the lotery when the ole’man/lady passes away. If you or i win the lottery we pay taxes. I think the estate tax is fair and heirs should absolutely be required to pay tax on any inheritance.
bob is exactly right.
it continually amazes me how much conservatives rail against “elites” on the one hand and then bitterly oppose estate taxes on the other. there are few better friends of entrenched aristocracy than repeal of estate taxes.
Clever parents might give the house and farm to the kids before they die, or sell it to them for a token fee. Isn’t that how you’d avoid giving the State any tax?
The tax may be fair, in principle, but what if there just isn’t any money in the family for the kids to pay inheritence? Should the state essentially ba able to force a sale in order to pay tax on something you got, then would no longer have?
I recall a friend who’s grandmother made him executor of her will and it cost him quite a bit of money (he barely had) for the favour.
I also believe school tax should be worked into an Income Tax format rather than a property tax base, But I’m told I’m nuts.
I also think I would favour a heavier tax when you bought something, rather than on what you may earn. If you buy a big screen tv, you pay luxury tax. If you earn money and don’t spend it, much less tax.
Might be too socialist?
So someone works and earns what seems like incredible wealth to us po’ folk and we us the law to steal from their heirs after taxes have already been paid on it? That’s class envy and class warfare.
Bret, The heirs did not earn the wealth. It is nothing more than a great day at the horse track,casino, or lottery terminal. However, if there was no tax on winning at the aforementioned activities then fine. Other than that I don’t see why if you have the right DNA you don’t pay taxes.
I see it is a great way to tax. It does not really impact work incentives or investment incentives. What of course would happen is that more wealthy people would give their heirs more money while they were alive instead of waiting for death. The biggest danger would be medium sized family businesses but I think you could find ways to avoid harming them.
bob is again exactly right, as is mervel. the estate tax is one of the most fair taxes out there.
Anti-tax rhetoric is a thinly disguised defense of greed and selfishness.
Hermit, please elaborate…
Pro tax rhetoric is a thinly disguised defense of greed and selfishness! So tell me folks, it’s all well and good to steal, I mean tax, the rich guy down the road. What happens when YOU suddenly discover that the tax man has decided you are “rich”? If things change a little in the law and the benevolent gov’t decides that the life insurance policy you got should be taxed (after all, your wife and kids didn’t EARN it) at a hefty rate, how would you feel? If the law is changed a bit and that house you paid for and left to your kids is taxed as income (after all, they didn’t EARN it) and they have to sell it because of the taxes, how would you feel?
This is a fundamental difference in outlook among different people. I believe in the bare minimum of taxation to keep essential services going and not one cent more. Other believe stealing the earnings of people and redirecting it to areas they think of as deserving is fine and still others want to punish the guy that did better than they did just because he got more out of life. It’s intellectually dishonest to support higher taxes on group than another. If taxes are “good” for society then more taxes on everyone should be “better” for us all, right?
You can only get money for essential services(whatever that means) from people who have money. Should we all be taxed at the same rate? Should everything be taxable? Who knows? But I certainly will vote for people to represent my beliefs. If your beliefs don’t win out sorry about your luck. In an interview last week Bill Gates noted that he paid over 6 billion dollars in taxes last year and was fine with that and could even see why he might need to pay more. Not all of the rich are greedy and neither are all the poor.
Taxed, or not, I have a problem further down the pipe. I don’t like what is being done with the revenue! IMO it is pilfered by the polititians to feather their own nests. I’m not talking about Social Programs, I’m talking flat out skimming of the cream. The money never seems to get to where it was intended to go- unless that was some pols pocket!
If bill paid 6 bil in taxes, why is this country still in so much debt? Why didn’t the bridges, roads get maintained? Why do the parks still need to be closed to get back in budget black?
I think because that 6 bil was pecked to death as it went down the hallways, and when it got the the till, it was small change. Probably took more money to account and “move” the funds, than the funds themselves.
If any of us ran our households like the government runs their’s we’d be on the street in a month.
knuckleheadedliberal, Estate taxes do not affect only billionaires, but you are right they effect a small number of people. I think there were 5500 individuals that paid estate tax nation wide last year. When in effect it accounts for a very small amount of government revenue, but it sure gets a lot of press.
This recent NY times article is interesting:
http://www.nytimes.com/2010/06/09/business/09estate.html
Personally I am glad to see that this guy’s family was able to keep the money and give it to all the different causes they list. The alternative is to give it to the government so they can squander it.
People who make over $250,000 a year should not have to pay any taxes. They invest that money and it creates jobs. Money from the wealthy “trickles down” to us po folk. Conservatives have proven that time and time again.
PNElba, Many Americans pay no tax at all. If you were to tax all the people in the country that make 500,00 dollars or more 100% you wouldn’t even start to touch the 13 trillion in debt that this country has (or even our current deficit). A fair tax that everyone pays is the answer to more revenue. Like the NYT article says most folks don’t pay estate tax anyway since they shelter the money in different ways before they croak. Get rid of all the rules and make the tax 15% for everyone. Corporate taxes and sales tax is where the real revenue comes from anyway. If we want more revenue and less debt we have to do whatever it takes to create more businesses. If that is done by increasing more taxes on the wealthy than so be it. But it hasn’t worked here.
I have seen little proof that the “trickle-up” theory works better than the “trickle-down” theory.
The fact of the matter is that federal taxes too low and have been for some time. We would be better off if we returned to the Clinton tax rates. The economy was much stronger then than it was under Bush.
The total tax burden is the issue for most Americans not just the Federal Income tax. The largest federal tax for most Americans is Social Security and Medicare. If you own a home in NYS you understand property taxes which for most homeowners up here rival federal income taxes, not to mention state income taxes and sales taxes.
The federal income tax may actually be to low I would agree. Although you can’t raise taxes in the middle of a depression.
Scratchy, how much do you make a year? If you are affected by the Bush tax cuts at all, that is you make more than 35K a year, then you will be hurt when it expires. More importantly, so will a lot of other people who will have far less money in their pockets.
http://www.taxfoundation.org/news/show/211.html
I always laugh when I see someone imply or outright claim that higher taxes can someone lead to a more robust economy. Prove it, and good luck. Moreover, prove that in a depression, which is what we’re in now, that higher taxes will help anything.
bret, are you joking? repeal of the entire bush tax cut package is not now nor has ever been on the table. it’s only the cuts for upper income brackets that are being talked about. the brackets below $250,000 won’t be touched.
second, did you rip van winkle your way through the 90s? bush 41 and then clinton raised taxes and we ended up with one of the best economies of the postwar era — in particular superior to the reagan and bush 43 economies.
But do people realistically think it is a good idea to raise taxes with 10% unemployment? The fact is the budget deficit is little impacted by raising taxes on those who make more than 250K, there simply is not enough of them. We could confiscate the entire income of all people who make over 1m per year, 100% tax rate and it would not really help the deficit that much. If we are still at 10% unemployment in December it will be interesting to see if they allow these taxes increases to go forward.
“clinton raised taxes and we ended up with one of the best economies of the postwar era”
or
“We would be better off if we returned to the Clinton tax rates. The economy was much stronger then than it was under Bush”
These comments are interesting. Do you folks really think that a higher marginal income tax rate under Bill Clinton was the reason that the economy was doing well in the 90s? Try all you like to “tax” the economy into shape. It just won’t happen. It scares me when I see this as what Americans suggest as the way to improving the country.
These comments are classic examples fo how the Clinton legacy has been “spun” in the media.
Folks should understand that the real “boom” of the 1990’s came at the end of the decade when a republican congress passed a series of tax cuts in 1997 that included an 8% decrease in the Capital Gains tax (President Clinton reluctantly signed this bill into law)
Read this article for more info:
http://www.heritage.org/Research/Reports/2008/03/Tax-Cuts-Not-the-Clinton-Tax-Hike-Produced-the-1990s-Boom
Paul, would you please cite a nonpartisan organization concerning your “facts” on the Clinton economy.
HT, the so called Clinton boom was not the result of taxes being raised. It was the result of the tech bubble and loosened credit practices. Reagan did cut taxes and spurred some growth, something that surely wasn’t happening in the Ford/Carter years. Things really began picking up at the end of the Bush 1 term and when the tech bubble really took off that’s where the boom came from. Oddly, the tech bubble was financed almost entirely on credit, at least the consumer end of it. I can recall when the only people who had credit cards were company drivers, maybe a very rich tourist. No one I knew personally actually had a CC until the mid 80’s, just as no one I knew actually owned a new car except a few lawyers and doctors and the guy that owned the lumber yard. When the banks figured out they could issue credit cards and reap tremendous rewards…boy, did they ever figure right. No one that I ever met actually went out and bought that first PC or Mac with cash, they still don’t. Our first PC was a Gateway in ’97, $2800.00 and we financed every penny of it, just like all our friends did, just like everybody did. That’s what drove the tech bubble- borrowed money. Same thing on the investment end. How many people borrowed against their retirement to invest in some tech start up that went exactly nowhere? It wasn’t increased taxes somehow leading to a robust economy. It was borrowed money. That’s smoke and mirrors at best an outright dream at worst. Then of course all the little dot coms started complaining because big bad Bill Gates had the market cornered and they weren’t going to be able to continue driving the Ferrari and taking 3 hour lunches if things didn’t pick up. So good ol Slick Willy went after Gates and that signaled the end of the tech bubble, the end of the ride and the end of his so called “surplus”, which wasn’t actually a surplus unless you completely discounted the National Debt, but that would screw up the story and Bill and Al’s ( he invented the internet ya know) legacy. So we don’t discuss the fact the “surplus” never existed.
Oh well, if you want to believe you can take money away from people and somehow expect them to spend the money you took, you go right ahead. Facts are facts and the fact is people cannot spend what they don’t have, unless they borrow it and then, believe it or not, someone is going to expect to be paid back- with interest. So since everyone is already up to their ears in hock and interest payments and since costs are rising and due to rise more and since fuel and food are going to cost even more when they pass cap and trade and since the unemployment figure is actually well over 10% (one source says closer to 23%) and since there’s no end in sight to our current problems….just how do you think taxing people more is going to leave them more money to pay these increased costs? Oh, that’s right GOVERNMENT WILL TAKE CARE OF THEM!
Please, when you leave more money in the pocket of the individual, that individual will spend it, mostly on junk, true, but still they spend it. That’s not arguable. When you take that money from them, at any financial level, you alter their ability to purchase items or invest or even to pay taxes. Giving that money to gov’t is about the single most inefficient way I can think of to somehow improve the life or well being of the people you took it from in the first place. I realize many won;t agree, but it’s common sense.
Bret, sounds like you don’t think people are smart enough to manage their own money and yet you don’t want the gov’t to manage things.
I don’t know how bret has time to do anything- farm or finances- with the amount of time he’s on the dang computer blogging
Hey, I do a lot of baby sitting too. I would be better off watching Sponge Bob?
Bob, never said any of that. I’m just pointing out how that “boom” was financed in great part. Check it out yourself. If people choose to use their money that way, so be it. That’s what freedom is all about, the freedom to fail as well as succeed. Of course Gov’t has a role, but that role has out grown it’s mandate and has become a self sustaining debt monster.
Hey, here’s and idea- why not share your ideas on how we get out of this mess? What’s your answer to multi trillion dollar deficits and multi trillion dollar national debt?
So just to be clear….the economic boom during the Clinton years was thanks to the Republicans….and….the economic disaster during the Bush years was the fault of the Democrats.
Bret, I manage my money. I’ve only financed three things in my life….home, car and college tuition. I’m fairly sure there are others out there that have done the same.
“So just to be clear….the economic boom during the Clinton years was thanks to the Republicans….and….the economic disaster during the Bush years was the fault of the Democrats.”
Yes, I think this is partially true. In both cases the shots were being called by the majorities in Congress. You can really only attribute all the “blame” or “thanks” when you have a situation like we have had for the past several years when the two elected branches of the government are controlled by the same party.
“Paul, would you please cite a nonpartisan organization concerning your “facts” on the Clinton economy.”
This is a good point. It is difficult to find a “nonpartisan” source for the facts these days isn’t it? What you have to do is look at all the sources and make your own decisions. For example I listen to FoxNews and NPR (along with many others sources). They all have a particular audience they are catering to. Often the facts are the same and the perspective is very different. What I try and look for when I want to know the “facts” is something like that article I posted where they have good references for all the “facts” they list. It may not be nonpartisan, but at least you can check the facts yourself if you want to spend the time. PNElba, if you want to share with us something regarding your viewpoint where it is well referenced like the article I cited please send it along. Even if it is partisan we will take a look.
Bret, I agree with Bob. Your post plainly points to individuals poor practices of living on credit cards and borrowing against their own retirement. Conclusion, people can’t manage their money. Yet at the same time you are even more clearly against the gov’t managing(regulating) peoples finances.
Holy smokes folks, apparently you see what you want to see. Look, if someone chooses to borrow money to finance something, that’s fine. They have to pay it back. That’s fine too. Where are you getting that I’m saying people can’t manage their own money? NOWHERE did I say or imply that. What I did say was that people took risks with money and that financed the boom. That was their choice. I think a lot of people made stupid decisions, but that’s their call, not mine. You do with your money what you wish. The more money gov’t leaves in your pocket, the more you have to work with. If you choose to make a risky investment and you win, good for you! If you lose, tough luck.
What’s so complicated about that?
I guess evidence to the fact that the majority of people manage their money well is the abundance of radio ads that start out with “Do you have more than $10,000 in credit card debt?”
Paul,
The 2008 article cited is not persuasive. Foster undermines his credibility by ending the article insisting that “taxes are now above their historical average as a share of the economy, and are rising”. What is he talking about? Federal taxes are at their lowest levels since before WWII! Perhaps Foster is including state and local taxes? It’s not clear.
Moreover, Foster concedes that more jobs were created during the 93-96 tax hike period than the 97-00 tax cut period.
He also, declines to address why job creation under Bush II- who implemented three tax cuts- was so poor: 3 million jobs versus 23.1 for Clinton. http://blogs.wsj.com/economics/2009/01/09/bush-on-jobs-the-worst-track-record-on-record/ So, nearly four times as many jobs were created under Clinton’s tax hiking first term than under Bush’s tax cutting two terms.
I have to agree with Scratchy. Where exactly are the “good” references to that Heritage report? The first reference is to another Heritage report, the next three are government statistics, some of which but not all, may support your point of view and the last one is a PriceWaterhouseCoopers report telling us that the “trickle down” theory works. Sorry, just not convinced. My personal viewpoint is that a large portion of increased tax receipts generated by by raising taxes were put towards paying down debt. That, along with spending cuts, is what generated the strong economy.
looks like i’ve gotten a bit behind on things! bret, first off i want to say i didn’t read your 2:50 comment carefully enough. i don’t mean to assert that the bush 41 and clinton tax increases caused the booming 90s economy. i have no idea how one assigns causality in these things. pnelba makes a plausible case for why higher taxes and a lower deficit might have led to a stronger economy, but who knows! i think one of the big lessons from the second half of the 20th century is that if you take a broad view of industrialized democratic nations, economic growth rates and levels of taxation don’t really correlate. growth has obviously been good in the u.s., but it was better in the 50’s and 60’s, when taxes were higher. and growth in western europe has been basically the same as in the states — and at times of economic hardship like this, i think there’s a good case to be made that europe is even stronger (or more “robust”), since its high levels of social spending provide built-in stimulus and protection against hardship. (of course, other factors involving the euro and poor monetary policy have placed europe in a lot of trouble right now.)
i also want to say that it’s very good to keep in mind that heritage is a super-ideological organization funded by wealthy right-wingers and everything that comes out of there should be viewed with a healthy dose of skepticism. but that doesn’t mean that everything they produce is automatically wrong. lots of good stuff comes out of analogous organizations on the left.
One thing that President Clinton and the Republican Congress did do right was pay down the deficit when they had good times, which is exactly what is prudent. You pay down your deficit in good economic times and run up the deficit when you have bad times. However President Bush and the Republican Congress when he was in office did not do that they ran the deficit when they did not need to refusing to make hard choices, they kept spending and reduced taxes; and frankly for me at that time the Republicans lost any claim to being “fiscally conservative”.
I think President Reagan coming into office facing inflation of 18% facing a rising unemployment rate spiking at 10.8% higher than today, did the right thing by lowering taxes and keeping the spending going.
Today in NYS with a high unemployment with stagnated growth, with already high taxes; now is not the time to raise taxes or cut spending.
scratchy,
I appreciate your blog reference. But at best that is an opinion piece.
PNElba, I agree spending cuts are in order, do you see that in the near future? I am hearing yet of new “stimulus” plans.
I question the numbers on Europe Hermit.
They have entire generations of educated young people who have never been able to find full employment due to the low historic growth rates and high historic rates of unemployment in Europe. But as you said this has been compensated for by high rates of spending on welfare. So it is a tradeoff, I am not sure Americans are willing to make that trade off?
Today we see the end game of that sort of spending that Europe has undertaken.
Spain is wonderful, but would we really want to run 20% unemployment, even if we got check from the gov every month?
HT, I don’t think you can equate job growth in he late 80’s/early 90’s with higher taxation. By that I mean we had very high unemployment in the early 80’s. I remember it well because when I got out of the Corps in ’83 there were NO jobs to be had. Dumb move on my part. Anyway, it took quite some time before things got back on track and it was really the early 90’s before things seemed to take off. You had a lot of unemployed people going back to work over that time frame. And then in the mid to late 90’s we had what was considered “full employment”. I think that figure is something like 4.5% unemployed- the group that won’t/can’t work. That has nothing to do with taxes. We simply experienced a boom time, not due to higher taxes but because things fell into line at that time. The increased revenue was due mostly to private investment, all those people trying to make a buck off the tech bubble- on borrowed money.
We didn’t use that money as wisely as some like to think either IMO. Yes, some debt was paid down, but most of that money was spent on pet projects, social programs of dubious value and pork. No attempt was made to plan for a “rainy day”, to ensure growth, to settle some of the National Debt. And now, between Bush and Obama, there’s no way we’ll address it in the near future.
Paul,
The WSJ reference may be an opinion piece but the numbers in the table speak for themselves. Republican administrations are not good for job growth. I still don’t understand the conservative viewpoint that during a severe recessioin we should cut spending. Cutting spending results in fewer jobs which results in fewer tax revenues.
Bret,
If my memory is correct, the government was running a surplus before Bush II. If my memory is correct, Gore promised to use some of that money to “save” social security by buying back some of the government bonds owned by ss. As for “NO jobs” in the 80’s? Well there was at least one job that I was filling (which used my military training) and I personally didn’t know anyone that was unemployed. So “NO jobs” is a bit of an exaggeration.
As for the future….of course there is a way to address National Debt. It’s called reduced spending, increased taxes and a call to all patriots to make some sacrifices.
mervel: from paul krugman: “Since 1980, per capita real G.D.P. — which is what matters for living standards — has risen at about the same rate in America and in the E.U. 15: 1.95 percent a year here; 1.83 percent there.” (note that when i wrote my comment above i misremembered what i had seen the data for and should have said “the e.u.” in place of “western europe”.)
matt yglesias points out (in a post entitled “If High Taxes Led to Growth, the Most-Taxed Countries on Earth Would Be the Richest; Which They Are” — heh!) that
For the record, however, the most-taxed countries on Earth (i.e., the countries where revenue is the highest percent of GDP) are in order:
1. Denmark
2. Sweden
3. Belgium
4. France
5. Norway
In terms of per capita GDP these are, respectively, the 4th, 9th, 14th, 15th, and 3rd richest countries on earth while the United States is 17th.
regarding unemployment, there’s this (from the krugman article):
And what about jobs? Here America arguably does better: European unemployment rates are usually substantially higher than the rate here, and the employed fraction of the population lower. But if your vision is of millions of prime-working-age adults sitting idle, living on the dole, think again. In 2008, 80 percent of adults aged 25 to 54 in the E.U. 15 were employed (and 83 percent in France). That’s about the same as in the United States. Europeans are less likely than we are to work when young or old, but is that entirely a bad thing?
i don’t at all see your point about “the end game of that sort of spending that Europe has undertaken.” spain is a great example — as recently as 2007 or so they were running budget surpluses, doing everything right, and then they got smashed when their own real estate bubble burst. and because they’re on the euro they’re stuck in quite a pickle.
bret: i’m not sure what you’re talking about. i never said anything about equating taxes with job growth in the late 80’s/early 90’s. in fact, as scratchy’s link points out, job growth during bush 41’s term was extremely poor! also, how do you know that full employment in the 90’s wasn’t aided by the strong fiscal position of government?
Ok thanks for the info hermit.
I still don’t think most Americans are interested in that trade off although I could be wrong? (The trade off being better social benefits for higher unemployment and higher taxes).
The end game was simply that the EU’s tab is coming due for for their spending we will see what happens.
They are no different from NY or Cal who have too high of spending for the level of revenue.