NJ Unprepared for a Recession

Reuters has a great article showing NJ, PA and CT will be in bad financial shape for the next recession:

Several U.S. states unprepared for a recession -S&P

By Stephanie Kelly, Daniel Bases and David Gregorio
NEW YORK (Reuters) - Several U.S. states studied by S&P Global Ratings are ill-equipped to deal with an economic recession, hampered by the slow rebound in U.S. economic growth after the damage wrought by the Great Recession.
Fiscal imbalances, slower state tax revenue growth and increased spending on social services have contributed to a challenging economic landscape, as real GDP has only increased at 2.1 percent per year since 2009, S&P said in a report issued on Tuesday.
Real U.S. GDP growth of 2.43 percent in 2014 and 2015 compared to pre-recession rates of 3.79 percent in 2004 and 3.35 percent in 2005, according to data from the World Bank.
To determine states' fiscal capacity to withstand the first year of a hypothetical recession, S&P sampled 10 states, the report said. The study found that a collective revenue shortfall would eclipse the states' combined budget reserves by $5.4 billion.
Of the 10 states studied, several have budget reserves that equal less than half of "potential revenue underperformance" in the first year of a moderate-intensity recession. These include Illinois, Pennsylvania, New Jersey and Connecticut.
Washington, Florida and New York would fare best, with reserve balances that exceed potential shortfalls. The remaining states sampled, California, Massachusetts and Wisconsin, fall between those two groups.
"Fiscal alignment" is an important indicator of a state's ability to recapitalize budget reserves, the report said.
"Therefore, it's no coincidence, in our view, that the four states in our evaluation we found to be most fiscally vulnerable to a recession have also struggled with chronic structural budget imbalance", it said.
States have also raised spending on public welfare, such as Medicaid, and pension benefits. Spending on entitlements increased to 40 percent in 2013 from 34 percent in 1995 as a share of total state spending, the report said.
This has reduced the states' ability to finance infrastructure and higher education — pro-growth ventures, it said.

Britain's decision to leave the European Union in June and a slowed rate of job growth in the United States have increased economic concerns. However, it said there is still only a 20 to 25 percent chance of a recession occurring in the next 12 months.

Finally, Talk about Reducing Taxes!

Hillary Clinton has been silent on the idea of reducing taxes in her campaign. In fact she is promoting increased taxes and increased government spending. Donald Trump has now announced a plan to reduce income tax to a maximum of 33% from 39.6%. He is also proposing to make corporate tax rates more competitive with other countries by reducing the maximum rate from 35% to 15%.

All of this sounds nice, but the real problem is that the Internal Revenue Code, and all the tax regulations and cases are so complex that no human being can fully understand it. Countless billions of dollars are spent complying with Federal tax laws and regulations. There has been no talk about tax simplification by either the Republican or the Democrat.

Also, the tax that hits many people, Social Security, is scheduled to go up to $126,000 of income. That means the combined employer and employee contribution, which is not tax-deductible to the employee, will be over $15,000 a year. Not a word has been said about this by either Trump nor Clinton.

In the next three months leading to the Presidential election, I doubt that there will be serious discussion about true tax simplification. That will save the American people, including the businesses they own, a lot of time effort and money. That would be a huge boost for our economy and our worldwide economic competitiveness and would result in increases in the income for most people. When are the American people going to force our politicians to start acting responsibly?

Gary Johnson / William Weld Political Ad: "Are #youin?" [SD Quality]

Let's end the draft started by Pres. Lincoln in the Civil War!

The Draft is Slavery. End it.

Congress has been debating the merits of adding women into Selective Service to be drafted with men during times of national emergency.

 

Sen. Rand Paul has suggested that it would be better to end the draft.

 

The Libertarian Party agrees.

 

"The draft is simply slavery by another name. Drafting people to go abroad and kill or be killed is barbaric and a discredit to our military and country," says Nicholas Sarwark, chair of the Libertarian National Committee.

 

If a national emergency is so severe to merit mobilizing extra troops, Americans from all backgrounds, ages, and genders will pitch in to do what is needed.

 

The Libertarian Party urges elected leaders to end the draft and also to pursue foreign policy which is less dependent on military might.

 

The United States has many tools of foreign policy at our disposal that do not require force. Military force should always be a last resort and only in defense.

 

The Libertarian Party is the only political party in America devoted to protecting all rights, of all human beings, all the time. The Libertarian Party also strongly condemns the use of force except in self defense.

IRS Simplifies Home Office Deduction

The Internal Revenue Service today announced a simplified option that many owners of home-based businesses and some home-based workers may use to figure their deductions for the business use of their homes.

In tax year 2010, the most recent year for which figures are available, nearly 3.4 million taxpayers claimed deductions for business use of a home (commonly referred to as the home office deduction).

The new optional deduction, capped at $1,500 per year based on $5 a square foot for up to 300 square feet, will reduce the paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours annually.

"This is a common-sense rule to provide taxpayers an easier way to calculate and claim the home office deduction," said Acting IRS Commissioner Steven T. Miller. "The IRS continues to look for similar ways to combat complexity and encourages people to look at this option as they consider tax planning in 2013."

The new option provides eligible taxpayers an easier path to claiming the home office deduction. Currently, they are generally required to fill out a 43-line form (Form 8829) often with complex calculations of allocated expenses, depreciation and carryovers of unused deductions. Taxpayers claiming the optional deduction will complete a significantly simplified form.

Though homeowners using the new option cannot depreciate the portion of their home used in a trade or business, they can claim allowable mortgage interest, real estate taxes and casualty losses on the home as itemized deductions on Schedule A. These deductions need not be allocated between personal and business use, as is required under the regular method.

For full announcement click here.