From Above the Law:
States Are Suing For Their SALT Deductions Back Under The 16th Amendment
The Republican tax bill famously capped the deductions for state and local taxes (SALT) at $10,000 for the purposes of federally taxed income.
The move, orchestrated by Republicans from low-tax, low-population states, represented a flashpoint in our growing system of political apartheid. It was an attack on high-tax “blue” states that provide services to their people, by flyover country that has gotten used to living without Medicare or education.
The blue states are fighting back, such as they can. A lawsuit was filed by New York Governor (for now) Andrew Cuomo against the federal government, joined by Connecticut, Maryland, and New Jersey. They argue that the Republican tax bill interferes with state’s rights to make their own fiscal decisions.
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But the states also argue that federal government is violating the original meaning of the Sixteenth Amendment… and I am all here for that. Blue states are making an originalist argument about the 16th Amendment and that is goddamn fascinating!
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Of course, “originalism” isn’t really an honest attempt to interpret Constitutional issues, it’s a cynical attempt to promote the polices of the Republican party. Right now, the policy of the Republican party is to napalm the SALT deduction.I expect judges picked by the Federalist Society and the Heritage Foundation to dance with the party that brought them. “Federalism” concerns or evidence of original intent mean nothing to these people when there is a preferred Republican policy up for review.
Still, New York Attorney General Barbara Underwood is making a great argument here. Even if she loses, she’s sure going to make conservative judges show themselves to be inveterate hypocrites.
The full complaint over at Reuters, read it, they make one hell of a good argument, and take textbook Republican constitutional approaches and just turn them right back around on them.
Not to oversimplify this, but it’s basically saying, if you believe in the 2nd Amendment, the right to bear arms, then you can’t simultaneously believe the Federal Government can repeal the SALT deduction. They can’t both co-exist, because the argument you use to defend the 2nd, can simultaneously be used to defend the 16th – and thus the SALT deduction.
https://static.reuters.com/resources/media/editorial/20180717/nyvmnuchin.pdf
35. The power to tax was an original power of the sovereign States that has never been surrendered. When the States formed the union, they consented to give the federal government a concurrent power to tax, but only to the extent that federal power could not be exercised to abrogate the sovereign authority of the States to establish their own taxation and fiscal policies. At ratification, it was widely understood that the federalism principles enshrined in the Constitution would serve as a check on the federal government’s tax power.
36. Recognizing this structural limitation on its power to tax, the federal government has always respected the sovereign tax authority of the States by providing a deduction for all or a substantial portion of state and local taxes as part of the federal income tax. Indeed, since the federal government first exercised its income tax power in 1861, Congress has included such a deduction in every federal income tax law. Relying on this constitutional guarantee and uninterrupted practice, the States have structured their own state tax regimes around the federal SALT deduction.
37. The ratification history of the Sixteenth Amendment provides further confirmation that a deduction for all or a significant portion of state and local taxes is constitutionally required. When the States ratified the Sixteenth Amendment, they confirmed the historic limitations on the federal government’s income tax power. At the time of the amendment’s ratification, it was widely understood that, to the extent the federal government taxed income, it would provide a deduction for all or a significant portion of state and local taxes. The States—including the Plaintiff States— relied upon this understanding in making the decision to ratify the Sixteenth Amendment.
38. The longstanding understanding that a deduction for all or a significant portion of state and local taxes is constitutionally required has remained the law until the recent tax overhaul, when Congress not only reversed over 150 years of precedent by imposing the new cap, but did so with the purpose of coercing the Plaintiff States into changing the choices they have made about publicly investing in their residents and businesses. Press statements from President Trump, Secretary Mnuchin, and Republican legislators make clear that the new cap on the SALT deduction was intended to “send a message” to the Plaintiff States that they must change their public policy choices or suffer. As explained below, these statements stand in stark contrast to the last 150 years of federal tax law, which has respected the States’ sovereign authority.
Like I said yesterday – NOW WE’RE TALKING.
This is the first thing I’ve seen from the impacted states that represents an honest, strategic approach to overturn the decision of the Federal Government. No bullshit, no gimmicks.
Scalia’s defense of the 2nd Amendment in Heller was based completely on an Originalist interpretation of the Constitution. As well by nearly every single defender of the 2nd Amendment. Hell, I’ve even made the originalist case here myself.
So use the exact same strategy to show the 16th Amendment (Federal right to tax), was predicated on maintaining the state’s sovereign power to tax, thus requiring the deductions.
So pick, Republicans, Guns or Repealing the Salt Deduction, you can’t have both. You can not simultaneously argue for an Originalist interpretation of the 2nd, and a Literal interpretation of the 16th.
Genius.
Absolutely Genius.
The conservative Supreme Court – if it gets there, when it gets there – are going to have egg on their faces if they don’t agree.
Just to clear things up, the second amendment:
A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.
A purely literal interpretation of this is fairly damning for gun owners, it’s clear, no guns outside a well regulated militia, which sounds like the military in today’s parlance.
And the sixteenth:
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
Federal Government can do whatever it wants to do with taxes.
By the way, it seems like Murphy and Grewal were late minute additions to the lawsuit, and it doesn’t at all seem like they had input on the strategy.
Eh, weak argument. Article is almost tongue-in-cheek by author.
It basically says that since the deduction was existed for a long time and since it was ‘understood’ to come into existence at the time of enactment it must remain forever. Any lawyer will rip this apart, especially regarding taxes. At what tenure does legislation become irreversible? What other laws validly enacted (or in this case, changed) become untouchable through the legislative process based on the ‘intent’ of the legislature that originated them years, decades, or centuries before?
Not to mention the facts are not in their favor. The elimination of SALT was the Feds adjusting the Fed taxes – as it does hundreds of times a year – not directly abrogating the states’ tax sovereignty. It was the States – not the Feds – that legislated parts of their tax code to a fed tax provision, not vice versa. And only some states at that.
Under the author’s logic, when the FRB went to ZIRP the States’ pension plans should have standing to sue…they relied upon rates at a certain level to provide their citizens benefits and the Fed changed those facts thereby diminishing the States’ sovereignty over their finances.
Under the author’s logic every fed tax provision change could be challenged as an encroachment of states’ rights. Makes no sense.
Not that I use this as a yardstick but it is interesting…the original nj.com article link from yesterday had nearly 100% of the comments running opposed to the suit. Never seen that level of unanimity on there. Some were pretty entertaining lol.
I agree with most nj.com posters….costly political theater by a State that doesn’t have the money to spend chasing such unicorns.
The “originalist* interpretation of the 2nd also requires use of the language used at the time in context.
With that said, the argument as presented seems pretty solid to a layman… i can almost support it. Ill be interested to see what becomes if it.
Although i still hope nj loses.
It basically says that since the deduction was existed for a long time and since it was ‘understood’ to come into existence at the time of enactment it must remain forever. Any lawyer will rip this apart, especially regarding taxes
Realize what you are saying.
It basically says that since gun ownership existed for a long time and since it was ‘understood’ to come into existence at the time of enactment it must remain forever. Any lawyer will rip this apart, especially regarding private gun ownership
It is exactly what I am saying.
Effectual ban on handguns, conceal carry, and other components. Actual ban on automatics. Etc. All exist despite the 2nd Amendment.
The legislation under any Amendment can change and be interpreted by the then sitting or any subsequent Congress.
Not going to do a dissertation but coming to opposite conclusions regarding guns and taxes is entirely consistent and correct.
The 2nd Amendment specifically says there shall be no “infringement” of the right to bear arms.
The 16th text is below. It is likewise very clear. And mentions nothing of .States nor states rights in regard to the Amendment. And pretty much green-lights the Feds to do whatever they want regarding federal income taxes.
16th Amendment:
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
The author uses ‘widely understood’ and ‘longtime understanding’ at least a dozen times.
I am admittedly guilty of practicing law here with a JD or LLM, but if I had to bet on the very clear and wide ranging language in the 16th Amendment vs. a bunch of ‘widely understoods’ I think I know where I’m laying my money.
Easy, because the states would have never ratified the amendment if they believed it provided the federal government with powers that would be used to negatively impact their own tax sovereignty.
sorry, practicing law here *without* a JD or LLM. As Stu used to say regarding investments he posted, I’m just a janitor who pushes a mop, online anonymously…
long day yesterday, two more college visits for my youngest….
“Easy, because the states would have never ratified the amendment if they believed it provided the federal government with powers that would be used to negatively impact their own tax sovereignty.”
1. Factually, it does not impinge a State’s tax sovereignty. The State may continue to tax in any manner it had previously or make any changes it desires between itself and its citizens. This change is to a federal tax law between the Fed and its citizens. In that case, the States may not even have standing to sue.
2. Ratification. But they did ratify. The exact language. There is very little wiggle room there, especially for some hypothetical, ‘would have never…’ argument.
3. Nasty fact supporting both of the above. Most States did not enact state income taxes until well after this ratification, and some not at all. Will Tennessee file a FOC brief supporting the Feds?
Chasing windmills. So many holes in their argument if I were an attorney I’d be embarrassed to have my name on it.
Cuomo swore he’d bring a lawsuit if they passed tax reform. Only after NY Press began publishing articles wondering what the hell happened to all the lawsuit talk….did he act. Cuomo is under intense political pressure right now in NY…several of his allies were just convicted of corruption…and the lawsuit appears to be a distraction.
The 2nd Amendment specifically says there shall be no “infringement” of the right to bear arms.
…By a well regulated militia. Don’t mix the two interpretations. If we’re interpreting the literal, the amendment clearly starts with:
A well regulated Militia, being necessary to the security of a free State
There are plenty of individual rights clearly stated in the Constitution and it’s Amendments. This is not clearly stating an individual rights. This statement literally starts with a fairly specific clause.
There is no “and” or “nor” between these, it does not say:
A well regulated Militia, being necessary to the security of a free State, AND the right of the people to keep and bear Arms, shall not be infringed.
Thus, the part of the statement within the commas, applies to the initial part of the statement.
The right of the people to keep and bear arms, in the context of a well regulated militia, shall not be infringed.
So tomorrow, Congress can take all guns outside the military away.
Is this the interpretation of the constitution you want?
I’ll sue!
https://amp.washingtontimes.com/news/2018/jul/11/andrew-cuomo-threatens-sue-supreme-court-over-roe-/
Andrew Cuomo draws chuckles with threat to sue Supreme Court over Roe v. Wade: ‘Whom would he sue?’
Factually, it does not impinge a State’s tax sovereignty. The State may continue to tax in any manner it had previously or make any changes it desires between itself and its citizens.
Sorry, but Mnuchen was very clear that this was exactly the intent of repealing the SALT deduction. These are not statements made in private, these were damning statements made publicly to the press:
https://www.foxbusiness.com/politics/mnuchin-fires-warning-shot-to-high-tax-states-get-control-of-your-budgets
U.S. Treasury Secretary Steven Mnuchin said on Thursday that he hoped the GOP’s proposal to eliminate state and local tax (SALT) deductions would send a message to high-tax states like New York and California.
“I do hope that this sends a message to the state governments that, perhaps, they should try to get their budgets in line,” Mnuchin said during a speech at the Economic Club of New York. “And the question is: why do you need 13 or 14% state taxes?”
This is why the argument is so brilliant.
Look, if it goes to the Supreme Court, they’ll throw it out and have no problem with being hypocrites, not just the Conservatives, but the Liberals, both.
Ginsberg and Stevens, who both dissented to Heller on completely literal interpretations, would look like idiots to argue that a literal interpretation is not sufficient, and that historic context and intent is necessary.
“Is this the interpretation of the constitution you want?”
Grim, I honestly think you are conflating concepts.
Going to ‘original intent’ arises from the lack of clarity you note in the 2nd. Specifically, the term militia is outdated and therefore it can be unclear whether the framers intended the right to reside with individuals or individuals in a militia. Also in the 2nd the preamble creates another lack of clarity by providing rationale (“being necessary to a free state”). Stating rationale begs the question ‘why’, ie. intent.
The 16th has neither rationale nor any lack of clarity. It has been a long time since I read it but it is frightening and clear in its wording. The Feds can tax all income from anywhere with no limitation and without rationale.
Stated differently, I *may* agree with your reasoning *if* the 16th had some preamble providing rationale (“In order to delineate the taxing authority among the Federal government and the States….”) or some other stated historical context that has changed (like the “militia” reference in the 2nd).
Otherwise the breadth of that federal power to tax in the 16th is breathtaking and pretty absolute….from whomever, on whatever income…….
There just isn’t the same lack of clarity in the 16th as in the 2nd to raise an ‘original intent’ argument.
The 16th Amendment is not without significant history, context, and controversy.
Blue State Democratic politicians are suing for tax breaks for the rich. Now that’s hypocritical.
The rulings won’t be hypocritical.
These States are looking to make an ‘original intent’ argument where the law is unambiguous…that just doesn’t work.
My prediction, parts of the suit are likely dismissed as States do not have standing. If the remainder makes it out of the lower court it is overruled on panel (not en banc) at the Circuit. In the very low probability it actually makes it to the Supremes this is a 72 or 8-1.
It’s not a matter of politics. The right of the Feds to tax its citizens incomes whenever and however is legally unambiguous in the 16th. There is no further interpretation necessary.
As an aside, we have routinely done an analysis for clients regarding the SALT issue.
For the most part, the combination of the AMT changes and also the overarching tax table structure renders most of this issue moot.
As an example, we have dual income couple in the several $100K AGI. All bent out of shape and super liberal, then I illustrated that their tax drops $7,000. Silence. There were a 1/2 dozen reasons, but mostly no AMT impact.
I think the husband made a tanning bed appointment. Hypocrites, but very nice people.
As if right wing sociopaths ever gave a sh!t about being hypocrites.
“The conservative Supreme Court – if it gets there, when it gets there – are going to have egg on their faces if they don’t agree.”
Make no mistake here, I suspect I have benefitted from the new tax plan more than anyone else on this blog, due to specific benefits provided to the type of business I operate.
“I’ll sue!…Andrew Cuomo draws chuckles with threat to sue Supreme Court over Roe v. Wade…”
He has commercials all over how he is protecting NYers right.
Legally spurious but brilliant move.
Create an issue that doesn’t exist then take credit for it not occurring.
Blue states make more rich people than red states everyday of the week. And you don’t have to be rich for this to affect you.
Hypocritical is you claiming to be intelligent when you post such nonsense.
D-FENS says:
July 18, 2018 at 8:02 am
Blue State Democratic politicians are suing for tax breaks for the rich. Now that’s hypocritical.
“Blue states make more rich people…”
Funny, I thought I worked those hours…..
I have a work related flight later tomorrow. LMK which State apparatchik will be taking my place. I’ll forward him my tix.
The blue state crowd needs to pay their fair share.
Btw, I’m at page 900 in Atlas Shrugged. The analogies and metaphor woven into the story by Rand are amazing. The antagonists are everything that is today’s progressive left – a bloated mess of people claiming to do good for the sake of the country while they pilfer the fruits of the productive class. They use the lesser masses as a tool for the altruistic gain while the masses think they really care about them. It’s astonishing how this level of government has failed every time throughout history yet weaker minds still believe someone will provide for them.
Could not the 2nd amendment be interpreted as a well regulated militia and the people have the right to bear arms? Or is the well regulated militia the people? Seems to me it can be interpreted as both.
So the state always has a first lien on your income? If the state wants to tax you at 95%, the IRS can only tax you on the 5% that’s left? That sounds cart before the horse to me.
Easy, because the states would have never ratified the amendment if they believed it provided the federal government with powers that would be used to negatively impact their own tax sovereignty.
The left: “Tax the rich…just not in my state.”
https://www.livescience.com/63090-crows-have-sex-with-dead.html
Ex – that argument is actually a defense of the necessity of the deduction.
The deductibility is necessary to prevent the total tax liability from being greater than the taxable amount.
*Legislative* argument.
Not enshrined in the Constitution.
SALT was validly passed and signed.
QED
States can shift to corporate payroll taxes from income taxes, and the whole thing becomes moot.
It seems preposterous to me. How does eliminating salt inhibit the states ability to collect taxes?
What happened to the “charity” plan? Did that already implode?
“States can shift to corporate payroll taxes from income taxes, and the whole thing becomes moot.”
As I tell my 17 year old, since it appears politicians operate at that emotional and intellectual age….
If you spent a quarter of the time addressing the issue that you do trying to figure out how to get around it your problem would be solved….
Stop promising stuff you can’t afford….https://vimeo.com/41152287
Cut state spending 10%. Redirect the $3.5B to the pension/healthcare obligation. Raise $1.5B new, apply likewise. That’s $5B annually toward those obligations.
Or, face reality, and start the processes to cut the obligations. Or some combination.
This lawsuit is demonstrative of everything offensive, irresponsible, and repugnant about this State’s “leadership” that resulted in us caring about this line item deduction in the first place…
I love Eddies 7th grade boom report. Another dumbass.
Eddie keep telling yourself the largest single transfer of money ever went to Wall St when we should have let You cunts fail.
The lawsuit has nothing to do with Murphy or Grewal, period. They were last minute additions.
Press did interviews, the NJ contingent was clueless compared to the other states who had very thoughtful responses and had done the due diligence on impact.
Jersey was like – I’m just here for the buffet, leave me alone.
I’m sure if Murphy was interviewed, his response would be something about how we should be president because this shows he is a defender of the constitution.
He, not we
Eddie keep telling yourself the largest single transfer of money ever went to Wall St when we should have let You cunts fail.
Says the person who sponges off his wife. Keep taking your meds pal. Wall street is making me money while you’re praying your “state sponsored” paycheck will be in the mail next month.
To be clear, SALT deductions were a benefit for the rich…whether the deduction was claimed by someone in a “Red” state or a “Blue” state.
If Democrats are fighting to restore the SALT deduction, they are fighting to restore tax breaks for the rich.
Democrats are primarily concentrated in “rich” urban centers and the east and west coasts of the United States. They have gentrified many of these cities…and are now suing to restore their tax breaks. Therefore, the Democrats are now the party of the Rich white guys.
Ottoman says:
July 18, 2018 at 8:34 am
Blue states make more rich people than red states everyday of the week. And you don’t have to be rich for this to affect you.
Hypocritical is you claiming to be intelligent when you post such nonsense.
D-FENS says:
July 18, 2018 at 8:02 am
Blue State Democratic politicians are suing for tax breaks for the rich. Now that’s hypocritical.
10:48 just keep pushing your brand of stupid.
New tax on water coming to NJ.
http://nj1015.com/nj-lawmaker-proposes-new-tax-on-tap-water-to-fix-pipes/
“There would be a user fee. I hate to use the three-letter word ‘tax,’ but a user fee for every 1,000 gallons of water of 10 cents.”
ExEssex,
You’re irrational and you’ve soiled yourself but you’re forgiven. Now clean yourself up and try to focus on a productive goal. It will alleviate your anger and give you purpose.
Ahhh thanks. I’m keeping busy. Trust me after Fiddy it’s all downhill for some folks, i’m Just getting started.
A public tax on water to benefit private owners?
Travesty.
Repealing the 16th amendment would be a better idea and cleaner fix.
DFENS,
I’d love the SALT deductibility to return. Because in effect, my “tax cut” was actually a net tax hike.
Of course the lefties keep on mouthing that it wasn’t. Even the rich ones who probably know via their own tax accountant that they are getting a net tax hike.
Would Trump or the Repub congress even mind? Probably not. Many would have liked a bigger tax cut, but my recollection is that because Dems refused to join, they had to pretend to restrain budget deficits via some additional tax income, and SALT non-deduction is where that came from. If Dems then act give back the deduction to effectively increase the tax cut for the wealthiest 20% and hike the federal deficits for them, would Repubs care? Probably not most. But I don’t think it’s going to happen anyway.
And dumbkoff if you ever find yourself in the position to take a year off – Consider it. It’s pretty f’big sweet
Jersey was like – “I’m just here for the buffet, leave me alone.”
Can we replace “The Garden State” with this much more appropriate slogan?
Regarding the real estate posts yesterday about bubble/no bubble. Remember…”generals always fight the last war”….
Inflation adjusted, there was very little variance in home prices over the last 75 years with the exception of about seven years from ’99-06.
So, rather than strategizing for what occurs 90% of the time everyone of course is seeking the next 10:1 odds situation. Where’s the bubble?
There isn’t one, and there won’t be one. There will be a gradual bleed in to current values or a slight mutliyear pop that will mostly hold over the next decade or so. There will of course be discrete pockets of under/overperformance as certain areas get hot or cool off, demographically.
Recall, this is *inflation adjusted*.
Nominal dollars matter less and is the (resident) fool’s game. “Forecasting” that house prices are going to be *nominally* higher than now in 15 years is idiotic…of course they will be. But that tells me nothing near term and nothing actionable.
It’s hard to find investments in homes that can cover my cost of capital even in currently ‘hot’ areas where LT values have not moved much in 10 years while presumably rents have. And that’s without factoring in the hassle of ownership. Bottom line, inflation adjusted upside is there but limited over the longer term.
Jersey is a semi- obese mixed race woman with a neck tat ordering her coffee from Starbux with a side of heavy cream.
Going to be 107 in Dallas 5 days in a row starting Friday. Tomorrow will be much cooler, only going up to 106.
Essex
You forgot she thinks she is ‘woke’ yet despises those who have different political views and is casually racist.
Why isn’t California involved in the lawsuit? Is that an indication of how stupid this lawsuit is?
The lawsuit was filed by the lunch-lady I had in gradeschool
https://twitter.com/NewYorkStateAG/status/1019220295851229190
Lefty,
Good write up on housing. Someone gets it.
Although I do believe there will be strong appreciation in the 2020’s based on the size of millennial buyer bloc. Look at how high they pushed up rents, they will do the same to housing when they go all in as a bloc in buying. Still lots of millennials on the sideline, but that will change soon enough.
1:44 she’ll cut a mother f’er
https://www.nj.com/monmouth/index.ssf/2018/07/shop_where_you_live_monmouth_mall_redesign_include.html
Although New Jersey has great pizza and cheesesteaks. Had pizza everyday on our trip to jersey and cheesesteaks twice.
The bacon festival I went to was a bust though. Was hoping for bacon ice cream, or maple glazed donuts topped with bacon. Instead got the typical burgers and sandwiches with bacon. Nothing wow or I had never thought of that before. Plus you had to pay $8 for a mug before you could buy craft beer. Another vendor wanted $12 for a mug so you could drink craft soda. I passed and bought bottled water instead.
$500M plan to create a new mega mall gets OK from N.J. town
Investigation: Patients’ Drug Options Under Medicaid Heavily Influenced By Drugmakers – NPR
https://apple.news/AabtFHCr6RWS2UjWOy1c7oA
Bacon is overrated as an ingredient. People like it because it’s already seasoned with salt and people who don’t season their food properly think it’s a miracle it tastes good. That god awful trend of putting bacon on everything was the worst.
Jersey pizza is great though. I can name a good 25 places up and down the state that are incredible. In general, Cheesesteaks are solid in Jersey. Still prefer certain Philly spots over them but you can’t really go wrong. I’ve seen NYC screw up the Philly cheesesteak 10 times over.
But I don’t need it on a spectacular burger. The only thing I use bacon for is Penne Vodka, BLTs, and possibly salads.
During the Peter Strzok testimony, the New Jersey rep, Bonnie Watson Coleman kept trying to stop everything, especially during Trey Gowdy’s questioning. I googled her to find out more info on her and come to find out, her son held up a Kids R’ Us in my town. It was about 800 feet away from my previous town home that I lived in 5 years ago.
BRT
Have you ever had kimchi fried rice? Chop up two slices of bacon per person. Cook in a sauté pan, add the chopped up kimchi and the rice. Serve topped with an egg fried in butter if duck fat is not available.
I have not. I’ll do it up though. I’ve been looking to switch up my breakfast.
Democrats, LOL….
Lieberman, the white ass, age old former CT Senator and VP Candidate does an interview with that turkey neck flapping in the wind encouraging Bronx voters to ignore the 28 year old Ocasio Cortez primary win and vote for long time incumbent Joe Crowley instead on the argument that she will ‘divide Congress’.
Crowley, who is on the the ballot on the Working Families line, tweets “still not running”. The Working Families Party meanwhile pledge to do all they can to elect Ocasio Cortez.
Seriously, cannot make this up. Fcuking bunch of Wile E Coyotes playing with three cases of Acme dynamite…..
Wow, Blumpkin admits he was wrong on wages but still believes all his other predictions will be correct. It has been shown time and time again that wages have go no where for a decade and there is simply no push for employers to increase them, even with billions in free money and billions in tax cuts. There is simply no historical model for where we are right now as economy or nation. Hudson County is simply in a bubble. Who realistically can afford 800K for a 2bd condo? Who will afford it when it is $850k or 900k? $200K dinks are simply extending themselves because they believe it is an afforable investment (compared to 1.5M in NYC) and they will hit it big when selling. It can’t continue. Predicting housing is useless excercise right now. There are many things that would need to occur prior to major upswing in house prices. I think big wage increases in mid-90s led to housing boom as $200k house was cheap when any idiot with a few years experience was making $70k by 2000. Fast foward now, and that house is listed at $650k, probably same as 2006 bubble price. You would need $200K income to afford it, plus taxes have doubled or tripled since 2000 so really you need more income. Jobs are just not paying any more than 1o + years ago. Just had a phone call with Prudential. They reached out to me after I submitted online. They must be the most arrogant and stupid talent acquisition department ever. It is a Senior PM role for Annuities business and states job will lead project teams, manage stakeholder communication, juggle mutliple projects and everything else etc.. I clearly submitted my salary expections online ($150k plus range). She calls me and says let’s discuss your background and what you are looking for in next role. Before I can get a breath out, she says ‘Oh, I see your salary states $15ok. This roles pay no where that. Would you consider $115k?” I told her no and she tells me that I should have applied for director level roles. I told her it states Sr PM and there was no expected level on job description. She then proceeds to give me arrogant stance on how I was VP and only directors get $150k and this job is not very senior (4 years experience). I had to explain to her Senior level is not 4 years experience especially when you want someone leading project teams. She said “where does it say that?” I pointed to first paragraph in job description. “Oh, that just means you will be leading project teams but no direct reporting lines” Unbelievable. In other words, we want the experience, leadership skills, responsibility of a senior level manager but pay of jr. person. Tight job market? I think not.
Left out my favorite part of the call, she said “well, you could make a bonus anywhere from zero to 30%”. She actually said zero. At least the smart recruiter b*llsh*t artists just say “the bonus potential is up to 30%”.
https://www.nj.com/salem/index.ssf/2018/07/nj_county_with_most_preserved_farmland_adds_anothe.html
State government spent $10 million of taxpayer funds to buy development rights from farmland owners in a place called Alloway, NJ. This is idiotic. Salem County’s population is in free fall and developments rights have no value there. Maybe I’ll buy some farmland Down there and shake free some state funds by selling them worthless development rights.
BRT
It’s great comfort food. Lots of videos on YouTube on how to make it.
If Pumpkin was right, I guess I was even more right. I said everything would go up, except for wages.
How much b*llshit can you fit into one article on NYC RE?
It is midterm elections causing NYC Real estate to slow down. No, it the the rich millenials who are uninformed about owning even at “shaking hands with God”-level pricing.
The truth is the the last statement on creative financing. They can’t afford it so we will come up with 5% down schemes for $850k loan…or company will pay down payment for future “appreciation” in property. Would love to read fine print on those loans. I bet it is akin to something like heads I win, tails you lose. No, bubble here in Manhattan..right.
http://rew-online.com/2018/06/22/biggest-issues-facing-nyc-residential-market/
“I think the thing that gets lost on in our industry is that housing prices have been rising most of the last nine years,” said Heym. “They bottomed out in March of 2009, just like the stocks. Eventually prices have been steadily going up for that long, it either becomes unaffordable or undesirable at one point.”
Heym pointed out that in the last two years, there has been a repeating pattern of slow third and fourth quarters in the residential market. In 2016, that slowness was attributed to Brexit and the presidential election, while last year, it was uncertainty over tax reform. This year has started off slow already, and the midterm elections may have an impact as well.
“It seems like we can’t catch a break in that regard,” said Heym.
The segment that’s doing well in the market is the homes selling for under $1 million, which as a result has led to low inventory in that part of the market.
One of the biggest worries about residential housing has been about the younger generation, or as they are called all-too-often, millennials. Everyone in the industry has thoughts on what millennials want; from design, to co-living (roommates) and amenities.
But when it comes to purchasing in NYC, the statistics show many young people aren’t buying like they used to. Some think it’s because millennials don’t like owning things, and prefer to rent. Others, like Ace Watanasuparp, vice president of residential lending see it as just being uninformed.
For young professionals living in the City, even with two well-paid salaries, how does a couple buy a place?
“Right now the millennials make up probably 35 percent of the first-time buyers in 2018, and by 2020, they would making up 65 percent of first-time buyers,” said Watanasuparp. “That’s a very interesting statistic and that’s why we’re so focused on millennials.”
Young professionals aren’t concerned as much about “mansions,” but are more interested in lifestyle and culture, and living in the city, argued Watanasuparp. But the biggest hurdle to that is affordability. That’s where upstart companies like Unison come in.
San Francisco-based Unison is a company that offers to pay half of a homebuyer’s down payment, in exchange for some of the house’s future price appreciation. Point is a similar company, but instead of working with prospective home buyers, it works with existing homeowners in a cash-for-equity arrangement.
And Citizens Bank has a program now for first-time home buyers as well, which offers home loans for up to $850,000 with just 5 percent down payment, and up to $1 million with 10 percent down payment.”
Bystander,
There is def wage inflation happening, it’s just concentrated. I expected across the board wage inflation, but that’s not what happened. Some people are getting 2% raises, while others are getting double digit gains. 4% growth in inflation adjusted dollars says it’s happening, but it’s just not happening to everyone.
“The signs of an improving New Jersey economy are evident in the rising incomes of some residents last year, but that good news is tempered by a continuing large wage disparity, according to the U.S. Census Bureau.
According to 2016 American Community Survey data released today, the median household income in the state rose by nearly 4 percent in inflation-adjusted dollars to $76,126 last year. That’s 4.8 percent higher than the 2012 income adjusted for inflation. New Jersey’s median income ranked third in the nation, behind Maryland and Alaska.”
Some gems from an article from 2007. The barbell is happening right before our eyes.
“You’re going to have a state that’s like a barbell economically,” Murray says, “where you have those who are wealthy enough to live here and do so because of its superior location and other attributes, and then you have those who are too poor to move out.”
“The strange thing about income distribution in New Jersey,” says Jon Shure, president of New Jersey Policy Perspective, “is that no one who makes $150,000 feels rich. But they’re making more than 90 percent of the households in New Jersey.”
https://njmonthly.com/articles/towns-schools/the_land_of_the_plenty/#
Putin Claims U.S. Intelligence Agents Funneled $400 Million to Clinton Campaign.
The fact that the Mainstream Media is Ignoring this, makes me very suspicious. They are not even attacking it. They are conducting a blackout as best they can. They do not want any attention paid to this. Why not use it to mock Putin and discredit him? They seem to be afraid to talk about it.
Yo is right. I showed you those Passaic Park properties. It’s inevitabke that this area will become like sf. Inevitable. The desirable areas will become unaffordable and the only places affordable to the “masses” will be ghetto areas. This is the future of northern nj and it’s happening right before our eyes. I grew up near Passaic Park. The place is unaffordable to me now esp with the school system. Clifton has become unaffordable too based on the school system. Only people that can afford the desirable areas of Clifton are those that will to pay a “private school tax” on top of already high taxes. The poor sections of Clifton use the public school system while the rich sections send them to private schools. Welcome the New Jersey.
We are becoming nyc.
“There is def wage inflation happening, it’s just concentrated.”
It is happening you, the dumbest poster on the blog but not someone like Lib, one of the smartest members of the blog. Got it. Really believable argument as usual.
Bystander,
I swear that I’m not making up the raise % that my wife and I received. I have no reason to lie. Hearing anecdotal stories from you and lib tell me that it’s highly concentrated. Income inequality, up close and personal.
Juice box stated that he was getting large raises. It’s happening, just not across the board.
There is def wage inflation happening, it’s just concentrated…in Seattle burger flipping jobs.
Pumps can only see from his own HS dropout perspective. Sure, HS dropouts and oil tanker drivers are seeing wage increases.