Logic Takes A Vacation

Breitbart posted an article today about the State of New York’s $2.3 billion budget shortfall. Governor Cuomo is blaming the Trump tax bill for the shortfall.

The article explains the logic:

According to Cuomo, it was Trump’s tax cut that caused “many of the state’s richest residents — who pay 46 percent of the state’s income tax — to either change their primary residence or leave New York entirely.”

…What Trump’s tax reform did was to restore fairness to the tax code, was to put an end to the injustice of all Americans — including those in the middle class — paying for the sky high tax rates in states like New York.

You see, before Trump reformed the tax code, all Americans were subsidizing the rich.

It used to be that you could write off every penny of your state income tax on your federal income tax. Trump put an end to this outrage. Here’s how it works…

In the state of New York, if you earn over $1.078 million per year, you pay an income tax to the state of almost nine percent.

In other words,  using round numbers, a New York resident who earns $10 million owes the state of New York close to $900,000 in income taxes. But…

Democrat-run states like New York knew that their rich residents would not feel the sting of that $900,000 tax bill because that $900,000 could be written off of their federal tax bill.

Basically, this was a sleazy way for Blue States to steal money from federal taxpayers, to make all of us pay for their grotesque tax rates. These Democrat-run states not only got all of this tax money, they also avoided getting voted out of office for over-taxing because the federal write-off removed most of the sting for the wealthy taxpayer.

Thankfully, Trump’s tax bill put an end to this shell game. Whereas before there was no limit on the amount of state income tax you could write off on your federal taxes, now there is a $10,000 limit. This means that the poor sap gutted for $900,000 in income taxes by New York, now eats $890,000 of it, which is as it should be.

Hey, if you’re a rich guy who thinks your taxes are too high, instead of making middle class taxpayers subsidize your ass, maybe stop voting for Democrats? Just an idea.

For those who want the rich to pay more taxes, the Trump tax plan has accomplished exactly that in New York and some other states that have excessive taxes.

The article concludes:

The truth, though, is spelled out very well by economist Marty Cantor, who laid it out for a local news outlet.

“The problems here are caused by the governor and his administration,” he told News12, “It’s too expensive to live on Long Island and in New York state. Taxes are too high, people are leaving. It has nothing to do with Trump.”

Here’s the kicker: The $10,000 write-off limit did not go into effect until  2018. So how does Cuomo explain 2017’s $4.4 billion deficit? How did the Orange Bad Man create that one?

Crickets.

When You Give To A Charity, Know Where Your Money Is Going

Yesterday BizPac Review posted an article about the Association of Black and Puerto Rican Legislators, Inc., a group of black New York State legislators who run a charity to provide scholarships for black and Latino youth.

The article reports:

The caucus of black New York state lawmakers run a charity whose stated mission is to empower “African American and Latino youth through education and leadership initiatives” by “providing opportunity to higher education” — but it hasn’t given a single scholarship to needy youth in years, according to a New York Post investigation.

The group collects money from companies like AT&T, the Real Estate Board of New York, Time Warner Cable, and CableVision, telling them in promotional materials that they are “changing lives, one scholarship at a time.”

The group — called the Association of Black and Puerto Rican Legislators, Inc.  — instead spent $500,000 on items like food, limousines, and rap music, the Post found.

The politicians refused to divulge the charity’s 2017 tax filing to the Post despite federal requirements that charities do so upon request.

The article provides some insight as to where the money collected goes:

State. Sen. Leroy Comrie of Queens, the group’s number two, refused to come out when Post reporter Isabel Vincent stopped by his office. All of the politicians mentioned are Democrats.

“The real purpose (of the charity) is to bring people to get over their apathy and out to Albany and get motivated,” the charity’s former chairman, Assemblyman Nick Perry of Brooklyn, previously said.

There has been no money used for scholarships in that past two years, the Post reported, citing sources. That’s even after the Albany Times-Union called outthe charity in January 2017 for meager spending in prior years.

The charity gave $36,000 of its $565,000 in revenue to scholarships in 2015. That year, it spent $85,000 on a concert with Eric Benet and Regina Belle, and $157,000 on food, according to the Times-Union’s analysis of its tax filings.

The group said that year it planned to double the amount of scholarships it gave, but it didn’t happen.

In 2017, its annual event featured the rap artist Big Daddy Kane.

Hopefully the Attorney General of the State of New York will decide that the spending habits of this charity are inappropriate and require this group to actually fund some scholarships. However, it’s New York, so I am not optimistic.

Unfortunately, Government Money Usually Has Strings Attached

Somewhere along the line, many people in America have gotten the idea that government money is ‘free money.’ It has not occurred to many Americans that the government has no money except money it takes from people who earned it. It also has not occurred to many Americans that government money usually has strings attached–taking government money generally gives the government permission to get involved in whatever you are doing with the money. This is true at all levels of government–from local to federal.

A recent example of this appeared in yesterday’s Wall Street Journal. The headline states, “New York Attorney General Eric Schneiderman Is Investigating Cooper Union.” Under that headline, the article states, “Probe focuses on financial decisions that led to school’s move to charge tuition.”

In the interest of full disclosure, I need to mention that one of my daughters graduated from Cooper Union with a degree in electrical engineering, so this article is very interesting to me. When she attended the school, it was tuition-free and she did get some help with her New York City living expenses.

So what did Cooper Union do that gives the State of New York the right to examine their decision to charge tuition? There are two actions that implicitly grant that right to the State of New York. The school owns the land in New York City that the Chrysler Building sits on.

The article explains:

As part of a long-running agreement between the school and the state, the school doesn’t pay property taxes on the Chrysler land and an amount equivalent to the Chrysler building’s property taxes are paid to Cooper Union rather than the city.

The agreement is partly due to the school’s status as a nonprofit and what its officials have argued is a force for social good.

Evidently these two conditions supposedly allow the State of New York to investigate the finances of a private college.

I think the telling paragraph in the article is:

Cooper Union’s financial portfolio is heavily invested in real-estate assets, public financial statements show. As it faced financial difficulties, the school declined to sell its land under the Chrysler building.

If Cooper Union sells that land, the property taxes from that land would be paid to New York City and not to Cooper Union. New York City is facing severe financial problems because of constant overspending and overtaxing–businesses and people are moving out of the city because they cannot afford to live there. I hope that this investigation does not force Cooper Union into selling the land under the Chrysler building–that is a permanent fix to a temporary problem. They are better off charging tuition until they get their books balanced. The State of New York really has no reason to investigate this other than to go after the land the has allowed the school to continue to operate. This is another example of government money with strings attached that are the size of the cables that hold up the Throgs Neck Bridge.