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Touching All the Bases . . .

Posted by Larry Doyle on July 16, 2009 5:31 PM |

I throw these items out given the magnitude of their potential impact for local economies and the market overall:

1. From Forbes The Obsolete New York Model, we learn that in

today’s New York City, where 1.2% of the taxpayers–40,000 households–pay 50% of the income taxes and half the households pay no income tax at all.

So what will the Obama health care plan, potentially funded by a surtax on higher wage earners along with a whole host of small businesses, mean for tax rates in New York City? We learn from a report published by The Tax Foundation, an independent Washington D.C. based organization founded in 1937, that the top tax rate in New York City would be 58.7%!! What do you think that does to the high end real estate market and job creation at small businesses?

2. Sticking with the Tax Foundation, we learn House Leadership’s Health Care Plan Pushes Top Tax Rates Over 50% In 39 States:

If Health Surtax Is 5.4 Percent, Taxpayers in 39 States Would Pay a Top Tax Rate Over 50%,” may be found online at

The hardest-hit states would be Oregon (57.5%), Hawaii (57.2%), New Jersey (57.1%), New York (56.9%), California (56.8%), Rhode Island (56.2%), Vermont (55.8%), Maryland (55.6%), Minnesota (54.4%) and Idaho (54.3%)

The effective marginal tax rate takes into consideration deductions and adjustments in order to present a truer measure of an individual’s rate.

Top tax rates in the remaining 11 states range from 47.3% to 50%.

Who else has an opinion about health care legislation and the proposed funding of Obama’s plan? None other than Douglas Elmendorf, head of the independent Congressional Budget Office (CBO). Elmendorf says in today’s Washington Post, CBO Chief Criticizes Democrats’ Health Reform Measures:

Instead of saving the federal government from fiscal catastrophe, the health reform measures being drafted by congressional Democrats would increase rather than reduce public spending on health care, potentially worsening an already bleak budget outlook, the director of the nonpartisan Congressional Budget Office said this morning.

Though President Obama and Democratic leaders have said repeatedly that reining in the skyrocketing growth in spending on government health programs such as Medicaid and Medicare is their top priority, the reform measures put forth so far would not fulfill their pledge to “bend the cost curve” downward, Elmendorf said. Instead, he said, “The curve is being raised.”

3. I have previously referenced how highly I consider Bloomberg reporter Jonathan Weil. In a discourse on CIT this afternoon, Weil pulled no punches in stating, “the government needs to stop lying about how well capitalized certain banks are.”


4. Sense on Cents is fully motivated to provide the clearest and most balanced assessment of the economy and markets. In that spirit, today’s rally was driven by a surprisingly bullish comment by none other than Dr. Doom himself, Nouriel Roubini. Bloomberg offers, U.S. to Recover, May Need More Stimulus. Roubini said:

“We might be at the bottom or close to the bottom,” Roubini said in a speech today at a Chilean investors’ conference in New York. “In many ways the worst is behind us in terms of economic and financial conditions,” he said, cautioning that “the recession might continue through the end of the year.”

“We should continue with fiscal stimulus and we might need a second one,” Roubini, 51, said today. There’s still a “meaningful amount of weakness” in labor markets, industrial production and housing, he said.

A second stimulus package of as much as $250 billion may be needed sometime early next year, particularly if unemployment goes “well above 10 percent by the end of the year,”

I read that assessment as “don’t break out the champagne but if you want a cold beer, go ahead.”

Keep those cards and letters coming . . .


  • Aaron kramer

    When the biggest bull becomes a bear
    and there is panic in the air
    it is time to start buying
    because everyone in crying.
    When the biggest bear becomes a bull
    because of the markets pull
    beware the markets new dawn
    as it may make you nothing but a pawn.

    This is an old saying on the floor that makes on questions the sheeple and view things from a different perspective. When I traded in the Nasdaq 100 pit near the top of the market a big trader who had been selling into strength for months turned bullish. Two weeks later we peaked and bought dips for months. Roubini’s analysis seems driven by the markets rather than his actual outlook. He doesn’t want to be wrong, the man has developed a rather large ego. Watch for the market to press the old highs and attempt to make new highs, lure people in and then fail. The writing is on the wall everyone is a bull and caution is being thrown to the wind. This doesn’t mean we can’t move 10% higher but my advice is to tread lightly.

    • Aaron kramer

      makes on questions = makes one question


  • Roubini has already issued a statement that his remarks today were taken out of context and he still sees the recession continuing through the end of this year with a very minimal recovery in 2010:

    “It has been widely reported today that I have stated that the recession will be over “this year” and that I have “improved” my economic outlook. Despite those reports – however – my views expressed today are no different than the views I have expressed previously. If anything my views were taken out of context.

    “I have said on numerous occasions that the recession would last roughly 24 months. Therefore, we are 19 months into that recession. If as I predicted the recession is over by year end, it will have lasted 24 months with a recovery only beginning in 2010. Simply put I am not forecasting economic growth before year’s end.”

  • Larry Doyle


    Thanks for providing that context. Perfect case of the amrket hearing what it wants to hear and the media presenting it as such. …and I took the bait. Oh well..fortunately there are sharper eyes and ears out there to rectify. TYVM!!

  • kbdabear

    Some analysis on why residential mortgages stubbornly keep foreclosing

  • lizzy

    I think Obama’s health care agenda is yet another of his sleight of hand magic tricks. All they talk about is insuring people. I don’t hear any meaningful discussion of curtailing costs. If costs are not controlled the price of any insurance program escalates to untried heights. It willprovide a feeding frenzy for Obama’s cronies in pharmacuticals, the AMA and of course GE’s beloved healhmagination touted by Daschle along withmedical providers. It certainly won’t improve health care for normal people.

    • Aaron kramer

      Right on lizzy GE could(will) be a huge winner if cap and tax and health care get passed.

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