Getting Squeezed By The Parentheses States
Tom Wolfe likes to call New York and California “the Parentheses States”, as he mentioned to the Wall Street Journal back in 2006:
George Bush’s appeal, for Mr. Wolfe, was owing to his “great decisiveness and willingness to fight.” But as to “this business of my having done the unthinkable and voted for George Bush, I would say, now look, I voted for George Bush but so did 62,040,609 other Americans. Now what does that make them? Of course, they want to say–’Fools like you!’ . . . But then they catch themselves, ‘Wait a minute, I can’t go around saying that the majority of the American people are fools, idiots, bumblers, hicks.’ So they just kind of dodge that question. And so many of them are so caught up in this kind of metropolitan intellectual atmosphere that they simply don’t go across the Hudson River. They literally do not set foot in the United States. We live in New York in one of the two parenthesis states. They’re usually called blue states–they’re not blue states, the states on the coast. They’re parenthesis states–the entire country lies in between.”
And they really do appear to squeezing their pincers ever tighter against their citizens — and especially their businesses. Just to follow-up on Rick Newcombe’s essay in the Journal about Creators Syndicate leaving Los Angeles, it’s safe to say that Steven Malanga of City Journal wouldn’t advise them to relocate to Manhattan, lest they face “Life in Taxopolis:”
Six years ago, Mayor Michael Bloomberg justified a $1.8 billion property-tax hike by comparing New York City with a “luxury product” that businesses were willing to pay more for. “It isn’t Wal-Mart,” Bloomberg said. “It isn’t trying to be the lowest-priced product on the market.” One can only imagine what the mayor thinks of his analogy now. After all, demand for luxury goods tends to fall sharply in recessions, in part because the customer base for these products is narrow and highly sensitive to economic swings. That’s why the luxury market has virtually collapsed in recent months, while Wal-Mart remains among the best-performing retailers in America. Will something similar happen to Gotham? In the wake of the global financial crisis, New York’s luxury consumers—that is, the Wall Street firms that paid the city’s bills—are likely to shrink considerably and generate far less in profits and wages. New York will need to find someone to replace them. Yet the city will be hard-pressed to find another industry that can afford its staggering local tax burden, which has grown steadily under the businessman mayor. True, New York’s quality of life has improved enormously over the past 15 years, and today it is one of America’s safest and most livable big cities. But if it is to attract taxpaying businesses after Wall Street’s meltdown, it must also price itself competitively.
In a city where a $200,000 salary allows for renting “eight hundred moderately roach-infested square feet in an unfashionable neighborhood of New York” as Megan McCardle wrote the other day in the Atlantic, good luck with that happening anytime soon.
Good post.
Bloomberg is a technocrat. As such, he thinks he can micromanage problems because he’s such a super-duper genius. Also, since Mayor Mike elbowed his way past term-limits, he’s probably too full of his accomplishment to actually pay too much attention to factors that fall outside his basic assumptions.
Unfortunately, you can only do that for so long before the real world intrudes.
“Bloomberg is a technocrat. As such, he thinks he can micromanage problems because he’s such a super-duper genius.”
It would behoove one to read Robert Caro’s magisterial, The Power Broker: Robert Moses and the Fall of New York. Bloomberg and Moses are convinced of their wonderfulness. Their benevolence and educational credentials provide them with the justification to put the screws to anyone getting in their way. They have a right to be somewhat dictatorial because of their good intentions and proven moral superiority. Others might be greedy, but these guys are self sacrificing and unbelievably virtuous. Only a disgusting scum bag could possibly disagree.
“Bloomberg and Moses are convinced of their wonderfulness. Their benevolence and educational credentials provide them with the justification to put the screws to anyone getting in their way. They have a right to be somewhat dictatorial because of their good intentions and proven moral superiority. …”
In short, they are narcissists. And too many New Yorkers subscribe to the narcissistic “Progressive” ideology to recognize that, realize it’s a serious warning sign, and vote against them.
One really has to laugh at NYC.
The very idea of a state income tax is a good example of poor governance, but a CITY income tax is simply ridiculous. Its equivalent to legislation to repeal the law of gravity.
What did they think was going to happen?
OldGuy-Philadelphia has a 3.4 % income tax and we all know how corrupt that Demo city is.
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My understanding is that Philly doesn’t exactly have an income tax. I once knew a fellow who worked there, and lived outside the city. He paid what was called a “paycheck” tax. You pay it, if you earn the money within the city’s limits, whether you live there or not. The intent is to inflict the tax increase most politicians dream of: the one where you tax someone who doesn’t vote in your re-election, so you can screw him as much as you please. I’ve often said that here in California, the mother lode is for the State’s Democrats to raise taxes on everyone who *used* to live in California, sending them a tax bill based on what they’d owe if they still lived here.
Interesting that we live in a world where people spend their lives trying to separate others from their money, legally, and are considered good citizens for doing it.
People can vote with their feet, too. http://www.niagarafallsreporter.com/golisano5.26.09.html
Remind me again, why do liberals think that the rest of America should follow the disasters of NY and CA?
@ 2: There’s a story about how the WF Buckley and his wife were hosting a shindig at their Manhattan home. Bloomberg was there holding court, giving a lecture about how smoking should be illegal in a bunch of places because smoking was bad for public health, it was disgusting, blah, blah blah. Upon hearing this, Mrs. Buckley turned to Bloomberg, blew a breath of cigarette smoke into his face and said, “How about in my own home?”
God only knows if that shut him up or not.
In a city where a $200,000 salary allows for renting “eight hundred moderately roach-infested square feet in an unfashionable neighborhood of New York” as Megan McCardle wrote the other day in the Atlantic…
Another Urban Legend repeated by Ms. McCardle.(Someone else who moved to DC and believed their IQ went up.)
Watch “Househunters” on cable. Unless that is fake Ms. McCardle is correct. $400,000 for something that would be condemed and torn down in Georgia.
That Philly tax is similar to the KC, MO “earnings tax”. You owe a 1% tax on income you earn in the city as a non-resident OR any income earned as a resident. Employers withhold and remit, leaving most workers no paperwork to file. The city sends tax bills to professional athletes who come to town to play the local teams, like the Chiefs, Royals, and Wizards when they play at Arrowhead (instead of CommunityAmerica Ballpark in KC, KS).
A lot of the home team athletes live just outside the city limits in places like Leawood, KS, so that they only have to pay the “E-tax” when they’re playing home games. One percent of income may not sound like much to the average person, but when you get millions of dollars a year, effectively cutting it to a half percent is a lot of money. Fascinating how people will try to avoid paying those taxes, huh?
King Shamus,
I haven’t heard that one, but I posted way back in 2002 about a somewhat similar incident involving Graydon Carter, the editor of Vanity Fair, lighting up a protest smoke in Nurse Bloomberg’s face in a private room at the Four Seasons restaurant.
Philadelphia actually has a vicious 3.93% *wage* tax (gross, no deductions, no forms to file, no refunds!), not an income tax; this is actually down from 5.00% in the late 1990′s. It takes 3.5% of gross wages from non-residents. New York City’s resident income tax (deductions allowed as on state tax) has a top marginal rate of 3.648%, and it does not tax nonresident income (other than for NYC employees). The state tax is higher in New York.
I never thought I’d say this but: God Bless Graydon Carter.
This calls for a great Mark Steyn quote from the Corner:
“Not to be too gloomy, but the country feels like it’s seizing up. It’s as if California and New York have burst their bodices like two corpulent gin-soaked trollops and rolled over the fruited plain to rub bellies at the Mississippi. If you’re underneath, it’s not going to be fun.”