By fnord12 | July 19, 2018, 3:44 PM | Liberal Outrage | Link

Eyeing NJ incentives

A report on New Jersey's tax incentive programs:

The release of the report comes nearly five years after the state significantly overhauled its approach to economic development to boost job growth, which had been stalled in the wake of the Great Recession. Those changes included allowing companies and developers to get more generous tax incentives, while also reducing their requirements for investment and job creation.

But those new rules have been hotly debated since they were enacted in 2013, with critics raising the cost of the incentives as a primary concern. The new Rutgers analysis estimates the average annual per-job cost for the state's popular Grow NJ program has been $7,650 for a new job created, and $3,670 for jobs retained using the state incentives. But those estimates don't count projects in Camden, which is treated as an outlier in the analysis because the 2013 law made the city a top-priority economic-development zone with its own set of rules. The annual per-job average for Camden is $34,000, counting both new and retained jobs, according to the analysis.

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The new analysis of the incentive programs comes out as Gov. Phil Murphy, a Democrat, is awaiting the results of a comprehensive audit of the programs, which are soon up for renewal. It's widely expected that Murphy -- who has loudly criticized the way the incentive programs were administered during the tenure of his Republican predecessor, Chris Christie -- will want lawmakers to make a new round of changes, reflecting his policy goals.

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...the authors point out those figures are generally on the high end of national benchmarks [even] if you don't count tax breaks that were used to lure companies to or keep them in Camden.

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"It is not always clear that such projects would not have been pursued elsewhere in the state in the absence of the ERG grant, and the state benefits therefore may not necessarily constitute a net return to the state," according to the analysis.

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On the residential side, the authors suggest making changes that would expand the places where developments could qualify for incentives, and it flags as questionable the use of some $25 million in residential credits on athletic facilities by Rutgers under the existing rules.

Murphy recently enacted huge incentives for Hollywood, which i think is extremely dumb, but it would be good to at least see him trim the incentives in other areas.

By fnord12 | July 19, 2018, 11:27 AM | Liberal Outrage | Link

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In Camden, changes in policing for the better

This is good:

Every few months, the police chief here asks which officers wrote the most tickets.

Elsewhere, this might lead to praise, but in Camden -- where 40 percent of residents live below the poverty line, the murder rate compares to that of El Salvador and one of the most interesting experiments in American policing is underway -- Chief J. Scott Thomson sees aggressive ticket writing as a sign that his officers don't get the new program.

"Handing a $250 ticket to someone who is making $13,000 a year" -- around the per capita income in the city -- "can be life altering," Chief Thomson said in an interview last year, noting that it can make car insurance unaffordable or result in the loss of a driver's license. "Taxing a poor community is not going to make it stronger."

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An early sign that Chief Thomson's message was taking hold among his officers came on Nov. 9, 2015, when a 48-year-old man walked into a Crown Fried Chicken, behaved menacingly toward customers and employees, brandished a steak knife and left. Outside, officers ordered him to drop the knife, according to video from police body cameras. But the man began walking away, slashing the knife through the air as he went.

For several minutes, the officers formed a cordon around the man and walked with him for a few blocks, trying to clear traffic ahead and periodically instructing him to drop the knife.

The crisis ended when the man did just that. Had the episode taken place a year before, "we would more than likely have deployed deadly force and moved on," Chief Thomson said.

By fnord12 | July 18, 2018, 9:38 AM | Liberal Outrage | Link

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The fiscal hawk who cried wolf

Alexandra Scaggs at Financial Times (requires a free account):

A prime example of this can be found in the warnings from some fiscal hawks about how financial markets would be overwhelmed by the wave of government bonds needed to fund the stimulus. Seven months later, 10-year Treasury yields are hovering around 2.8 per cent.... Where are the storied bond vigilantes?

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For their efforts, US lawmakers have now educated a generation in the risks of dogmatic opposition to government debt, and made austerity a more tangible threat to young Americans than harmful inflation. Small wonder then that Alexandria Ocasio-Cortez, the self-described democratic socialist, was recently elected to represent New York in Congress. She has backed the increasingly popular view that restraints on a government's spending are primarily set by the amount it can borrow in its own currency without fuelling inflation -- not its annual tax revenues.

Some economists may find this perspective uncomfortably liberal, but it is not necessarily inaccurate. It acknowledges global demand for US Treasuries, which is a more honest depiction of the government's finances than a Treasury that is only capable of spending the amount it raises through tax revenues in any particular year.

Milton Friedman famously said inflation is "always and everywhere a monetary phenomenon". So those who argue that government borrowing causes an acceleration in inflation implicitly acknowledge that Treasuries more closely resemble money than a highly burdensome debt load.

Beyond that, when it comes to rising prices, more evidence is required to argue that wage-driven inflation hurts consumers. Particularly because it is shareholders whose companies' margins are dented by rising wages, and bondholders who get hurt by inflation regardless of its source.

Americans, particularly young Americans, are starting to question the assumptions that underlie some policymakers' categorical opposition to federal government borrowing. For those hawks who make politically motivated forecasts of doom for the US's fiscal health, it may be their own credibility that ends up paying a price.

By fnord12 | July 14, 2018, 10:35 PM | Liberal Outrage | Link

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"U.S. Opposition to Breast-Feeding Resolution Stuns World Health Officials"

NYT:

A resolution to encourage breast-feeding was expected to be approved quickly and easily by the hundreds of government delegates who gathered this spring in Geneva for the United Nations-affiliated World Health Assembly.

Based on decades of research, the resolution says that mother's milk is healthiest for children and countries should strive to limit the inaccurate or misleading marketing of breast milk substitutes.

Then the United States delegation, embracing the interests of infant formula manufacturers, upended the deliberations.

...The Americans were blunt: If Ecuador refused to drop the resolution, Washington would unleash punishing trade measures and withdraw crucial military aid. The Ecuadorean government quickly acquiesced.

By fnord12 | July 8, 2018, 3:17 PM | Liberal Outrage | Link

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What the years are doing to the soil

I've blogged about the great nutrient collapse previously, but that article focused on crop varieties and (mainly) CO2 levels. This article focuses on the soil:

Broccoli. One of the most nutritious vegetables on the planet.   But 70 years ago, it contained twice the calcium, on average, and more than five times the amount of Vitamin A. The same could be said for a lot of our fruits and vegetables.   Why? How?  The answers lie in the soil and how Americans farm it. Over the last two centuries, U.S. population growth and food production methods have stressed and degraded our dirt.   Our soil is not as alive as it once was, and experts say that's a problem.  

By fnord12 | July 6, 2018, 5:57 PM | Liberal Outrage | Link

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Literally how it's supposed to work

"America's labor shortage is approaching epidemic proportions, and it could be employers who end up paying."

It's called "supply and demand".

By fnord12 | July 5, 2018, 2:43 PM | Liberal Outrage | Link

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The victims no one thinks about

(I haven't actually read the article yet, on account of i'm too busy laughing.)

By fnord12 | July 5, 2018, 11:57 AM | Liberal Outrage | Link

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Such a messed up system

New Jersey's new budget is more of a compromise than it should be (which, again, is so insane considering the government is made up entirely of Democrats), but one good thing is that we're joining 25 other states in enacting a policy called combined reporting. The move has apparently caught the "business community" by surprise, which is kind of delicious (this only affects multi-entity corporations, so the idea that it's a burden on small NJ-based businesses is ridiculous).

Here is the loophole that combined reporting closes:

In the trademark holding company scheme, a chain sets up a subsidiary in a state that does not tax certain types of income, such as Delaware, Michigan, or Nevada. Home Depot, for example, has a Delaware-based subsidiary called Homer TLC, Inc. The subsidiary, which consists of little more than an address, owns the company's trademark, and Home Depot stores in other states pay the subsidiary a hefty fee for using the trademark. Home Depot then deducts those fees as business expenses from its tax returns in those states. Meanwhile, because Delaware does not levy corporate income taxes on earnings from intangible assets such as trademarks, the profits are not taxed in that state either.

Often the subsidiary will also lend money to the rest of the corporation, enabling a second stream of profits to be transferred free of state taxes through the payment of interest on the loan.

Another method, the REIT scheme, has been widely used by large retailers, notably, Walmart.

Established in the 1960s by Congress, REITs are exempt from paying taxes on dividends paid to their investors. Chain retailers have taken advantage of this by setting up their own REITs (often called "captive REITs"), which own the land and buildings that house their stores. The chain then pays rent to the REIT and deducts the rent as a business expense from its state tax returns. The REIT's income is then paid back to the chain as a tax-free dividend.

The fact that all of this is even possible is a sign of how messed up our economic system is.

Update: I spoke too soon. This isn't fully in yet.

Final update: This issue is apparently too in the weeds for most of NJ's media, but the whining from NJ's Chamber of Commerce seems to indicate that it was included although this article indicates that the provision was "slightly modified... to include more specifics". Seems mostly like a win.

By fnord12 | July 1, 2018, 12:14 PM | Liberal Outrage | Link

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