Global Economy Bursting?

[Randolph Kinney]

Nicolas Sarkozy “to move to London to set up €1bn private equity fund”

http://www.londonlovesbusiness.com/...quity-fund/4536.article#.UP6eGGby0PY.facebook

Former French President Nicolas Sarkozy could be planning to move to London with his wife Carla Bruni to set up a private equity fund and escape the threat of a top income tax rate of 75% in France, it was reported.

Sarkozy’s prospective move comes in the wake of a number of high profile departures. Luxury goods billionaire Bernard Arnault and actor Gerard Depardieu have suffered a firestorm of criticism for trying to escape France and the looming threats of Hollande’s tax regime.

 

[Randolph Kinney]

A Tax Bite Tailored to Help All

http://www.nytimes.com/2013/01/23/b...?nl=todaysheadlines&emc=edit_th_20130123&_r=0

What would happen if the government raised everybody’s taxes?

To make ends meet, both parties agree, spending must be drastically cut.

This is not, however, the only option we have. There is an alternative: raising more money from all taxpayers, including the middle class.

Higher taxes would undoubtedly stress many working families, especially after a decade of falling income for all but the most successful. But these families might nonetheless prefer paying more in taxes to losing government services they rely on.

A good way to start the debate might be to explain what higher taxes would entail for middle-class families, so they could balance the bill against the benefits they would otherwise lose. “One way or another, middle-class people are going to take a hit,” said Eric J. Toder, a co-director of the nonpartisan Tax Policy Center. “It’s unfortunate that neither party is willing to admit that.”

 

[Randolph Kinney]

Tiger Woods Cites High Taxes For Leaving California, Backing Phil Mickelson's Comments

http://www.policymic.com/articles/2...-california-backing-phil-mickelson-s-comments

Despite the obligatory plea to pay one's “fair share” argument that such a move will prompt, Woods’ and Mickelson’s statements may prove to be the majority’s sentiment, causing others to follow suit.

Mickelson, if he decides to stay in California, would lose over 60% of his yearly earnings to taxes, and has already dropped a major investment due to the increases.

Mickelson, originally from San Diego, wanted to invest in his hometown, which led him to join a group of investors that bought the San Diego Padres. Mickelson, however, has since rescinded his involvement, and cited that the tax increases were “absolutely” the reason for his withdrawal.

The comments by Woods and Mickelson are all too reminiscent of Gerard Depardieu, who fled France due to its 75% tax rate on the wealthy — a move that has recently been replicated by former French president Nicholas Sarkozy, who is making plans to leave France for the same reasons.

Despite being billed as a necessity, it appears as if a high tax rate only motivates high-earners to find cheaper living, ultimately causing tax revenues to dry up. Proving that the Laffer (and Lovitz) Curve may hold true.

 

[Terrel L. Shields]

Rich = very rich but few in number...pay taxes at a higher rate

Poor = very poor and pay no taxes...dependent upon government assistence after retirement at a minimum...

Middle Class - from just above poverty line to "upper middle income" ...pay the bulk of taxes howbeit at a lower rate than the rich, and a higher rate than the poor...but the middle class benefits MORE than any other class from SS, Medicare, as well as public education, public roads, recreational facilities...etc.

Locally our "conservative" county officials in 20 years have spent money for every silly project you can think of. They hauled steel beams for a bridge site at a cost of $50K then waited for an election to get the money. The measure failed so they spent $50K to haul them back to Tulsa... We have a fleet of snowplows and we've had snow 2 out of 10 years. We have GPS on our road graders. Our police are driving 4wd Tahoes? The sheriff just bought a $50,000 PU for the new sheriff without being authorized to spend it. It's the middle class spending the money...why shouldn't we pay for it? Or better yet, why don't we cut back.

 

[Randolph Kinney]

California residents, businesses consider bailing on Golden State over taxes

http://www.foxnews.com/politics/201...-consider-bailing-on-golden-state-over-taxes/

From small businessmen in San Diego to vintners in Napa Valley, top-earning Californians reeling from a new state income tax are preparing to pack up and bail out.

Top-ranked golfer Phil Mickelson ignited a firestorm this week by suggesting that the state's tax landscape might force him to make tough decisions, such as moving elsewhere.

"If you have excessive regulations and excessive tax, that's just not where you want to be," said Peter Farrell, president of ResMed a medical-device maker in San Diego that employs 600 workers and is considering moving its offices out of state. "California is unfriendly. It's become an unfriendly business environment."

One possibility is Texas, where the personal income-tax rate is zero, compared to 13.3 percent for top California earners.

Another San Diego-based company, Fallbrook Technologies, a maker of variable speed transmissions, recently announced it is leaving for Texas.

Nevada tax accountant George Ashley said he's received more than 100 inquiries from higher-earning Californians about the possible tax advantages and feasibility of relocating to a state with lower taxes.

"We have had a 10-fold increase from various parts of California, particularly Los Angeles and the Bay Area where many people are seeking a way to leave the state," said Ashley, who lives just over the California state line in Lake Tahoe, Nev.. "They are fed up with the situation and they feel like they are being unfairly treated."

The proposed exodus is the result of Proposition 30, a tax-increase proposal by Democratic Gov. Jerry Brown that residents voted into law in November

"As soon as Prop 30 happened, I saw just a huge change in the mindset," said consultant Matt Bradvica, a certified public accountant in the San Diego office of the national tax advising company McGladrey. "It was almost as if that pushes it to the limit.
"There are other states out there that have no income tax at the individual level. And so if you can save 13 percent in your business by residing in Nevada, for instance, which is a zero tax state, then I need to consider doing that."

And many have already have.

Fox News contacted a dozen high net-worth residents up and down California. Most talked at length but asked that we keep their identity hidden out of fear of being audited -- or, as at least one person said, "harassed" by the California Franchise Tax Board, the state version of the IRS.

"It never stops," a wealthy San Diego retiree told Fox News. "Pay a little more this year. Pay a little more pay here. Pay another business tax here. There is no end. So we decided to end it, and left."

Married, with grandchildren in the area, this individual put his house up for sale as soon as Prop 30 qualified for the November ballot. He now lives in Phoenix, having sold two California homes. He claims to be saving $20,000 a month in property and income taxes since relocating.

Another North County San Diego resident, whose home is currently for sale, told Fox News he estimates he and his wife will save $30,000 a month by moving to Arizona. He said it's not that he is against paying his fair share, but more than 50 percent of state residents pay no personal income taxes at all, and that, he said, is "unfair".

"We feel like the politically convenient target," he said. "Governor Brown used the tyranny of the majority to steal from the minority. It's that simple. The majority isn't going to vote to increase their taxes -- stick it to the guy next door. That is the mentality in California and while we love the state and will miss the beaches, we've had it. We're out."

A venture capitalist wrote: "I am thinking about Seattle. In our business, my income comes in big pops when we sell a company. So when those events happen I will always be taxed at the highest rate."

A Napa County winemaker added: "Truly frightening. I was a little shocked when we looked at our first paycheck of 2013. I have nothing taken out above the minimum required taxes and found my net pay was 46 percent of the gross. Any wonder we, as I'm sure many others, are considering fleeing CA for an income tax free state, in our case Jackson Hole, WY. "

A Silicon Valley investor planning to leave wrote: "I don't think I would be a good subject for your report. I think anything I say would come across as whining. I hit a great deal and now the taxes are coming due, but no jobs are involved. If I leave, the state will lose my taxes and the economic activity associated with my living expenses, but that's it. Since my son is only in high school, I (can't) leave prior to the time he graduates."

While most of the evidence of an exodus so far is anecdotal, some tax analysts expect the evidence to show up in declining tax revenues from the wealthy by 2014, as they figure out how to legally relocate without actually leaving the Golden State nine months a year.

 

[Randolph Kinney]

California lawmakers split on Mickelson's tax comment

http://www.mercurynews.com/sports/c...-lawmakers-split-mickelson-apos-s-tax-comment

The four-time major champion said higher state and federal taxes will take 60 percent of his income.

California lawmakers split upon reliably partisan lines in offering reaction, with Republicans saying they expect more high-earners to follow and Democrats saying multimillionaires can afford to pay more.

"You know, it's sad. And I think it'll be the first of many," said Assembly Minority Leader Connie Conway, R-Tulare. "It's one thing to have nice weather and say California's great, but at some point, I think most people don't want to turn over 60 percent of their earned income to taxes."

Mickelson's comment recalls the ongoing spat between the French government and actor Gerard Depardieu, who has acquired a Russian passport and said he would move to Belgium to avoid a proposed 75 percent tax on the wealthy.

But Democrats said there is no evidence in the U.S. or California of mass departures in the wake of higher taxes on the wealthy. State Assemblyman Roger Dickinson, D-Sacramento, called Mickelson "the exception rather than the rule."

"Most of the people who do well love to be in California, and there's no evidence from past occasions when tax rates were higher on the wealthy that it led to any kind of exodus of those who were wealthy or higher-income earners, so I don't expect that to be the case this time, either," Dickinson said.

 

[DTB]

Middle Class - from just above poverty line to "upper middle income" ...pay the bulk of taxes howbeit at a lower rate than the rich, and a higher rate than the poor...but the middle class benefits MORE than any other class from SS, Medicare, as well as public education, public roads, recreational facilities...etc.

.

Absolutely incorrect sir! The top 10% pay 68% of all federal income taxes collected, leaving significantly less the "the bulk" of taxes to be paid by the rest.

The middle class may benefit the most due to the fact that they are the largest group. However, the poor disproportionately get the most benefit. Every benefit that you list is utilized by the poor, except they didn't pay for any of it.

I am waiting for the politician to post his research on makers and takers. Let's get back to reality.

 

[Terrel L. Shields]

Fed. INCOME taxes perhaps. But the middle class pays sales and property taxes too. And it is property taxes and sales taxes that run local and state governments.

BTW, I went into the town of Gentry (pop. 3000±) yesterday and sitting at the cafe was a black Hummer....markings? "GENTRY POLICE" ... What the **&^% does a pizzant town like that need with a HUMMER???

 

[Randolph Kinney]

California v. Microsoft

http://online.wsj.com/article/SB10001424127887324624404578257844192650964.html?mod=googlenews_wsj

The Maloof family this week agreed to sell its 65% stake in the NBA's Sacramento Kings to a Seattle-based hedge fund led by investor Chris Hansen and MicrosoftMSFT +1.39% CEO Steve Ballmer for $340 million. Mr. Steinberg, a Democrat from Sacramento, is none too happy about his city losing its biggest franchise (other than government, of course). Naturally, he blames Microsoft.

"I am troubled that a company and a CEO that has for so long enjoyed a prosperous and beneficial working relationship with the state of California and its taxpayers would blatantly engage in activities which are clearly and measurably detrimental to our state's job and revenue base," Mr. Steinberg wrote in a letter to the director of California' procurement agency.

The lawmaker requested that the agency investigate how many technology contracts Microsoft has with the state and how much California's government has paid the Seattle-based software company over the last decade. "I cannot stand idly by while a prominent out-of-state company that has significantly profited from business with the state of California actively attempts to acquire and remove one of my state and my region's leading private assets," Mr. Steinberg warned.

In any event, there's not much Mr. Steinberg can do to block the team's sale, though the posturing may help him mitigate the political fallout. Sacramento's denizens must be starting to wonder why established businesses are pulling up roots and moving to lower-tax pastures. Last fall both Campbell's Soup and Comcast CMCSA -0.69%announced that they were closing facilities in the city and outsourcing 1,000 jobs to other states including Texas and Nevada, which don't impose an income tax. Notably, neither does Washington state.

And that's the rub. The team's 14 players pay roughly $7 million on their $57 million in income to the state. That's about as much as the state brings in from 2,000 median-income jobs. No wonder Mr. Steinberg is upset.

 

[William K]

California v. Microsoft

[url]http://online.wsj.com/article/SB10001424127887324624404578257844192650964.html?mod=googlenews_wsj[/URL]

The Maloof family this week agreed to sell its 65% stake in the NBA's Sacramento Kings to a Seattle-based hedge fund led by investor Chris Hansen and MicrosoftMSFT +1.39% CEO Steve Ballmer for $340 million. Mr. Steinberg, a Democrat from Sacramento, is none too happy about his city losing its biggest franchise (other than government, of course). Naturally, he blames Microsoft.

"I am troubled that a company and a CEO that has for so long enjoyed a prosperous and beneficial working relationship with the state of California and its taxpayers would blatantly engage in activities which are clearly and measurably detrimental to our state's job and revenue base," Mr. Steinberg wrote in a letter to the director of California' procurement agency.

The lawmaker requested that the agency investigate how many technology contracts Microsoft has with the state and how much California's government has paid the Seattle-based software company over the last decade. "I cannot stand idly by while a prominent out-of-state company that has significantly profited from business with the state of California actively attempts to acquire and remove one of my state and my region's leading private assets," Mr. Steinberg warned.

In any event, there's not much Mr. Steinberg can do to block the team's sale, though the posturing may help him mitigate the political fallout. Sacramento's denizens must be starting to wonder why established businesses are pulling up roots and moving to lower-tax pastures. Last fall both Campbell's Soup and Comcast CMCSA -0.69%announced that they were closing facilities in the city and outsourcing 1,000 jobs to other states including Texas and Nevada, which don't impose an income tax. Notably, neither does Washington state.

And that's the rub. The team's 14 players pay roughly $7 million on their $57 million in income to the state. That's about as much as the state brings in from 2,000 median-income jobs. No wonder Mr. Steinberg is upset.

Yep, that makes a lot of sense, tick off Microsoft and lose some more jobs. I think Cali politicians have let the whole 9th largest economy thing go to their collective heads. You keep ticking off businesses and their owners and soon you will have no big businesses and wealthy owners.