Tuesday, April 7, 2015

Connecticut Keeps Eye on Cho$en Ones

‘‘There are probably a handful of people, five to seven people, who if they just picked up and went, you would see that in the revenue stream.’’

Wait until you $ee jwho they are?

"Conn. asking super-rich residents not to leave state; Some fear impact on revenues if just a few left the state" by Stephen Singer, Associated Press  February 09, 2015

HARTFORD — If you’re a billionaire living in Connecticut, chances are the tax department is keeping an eye on you.

In a state that’s home to some of the richest Americans, tax officials go to some lengths to keep them — or, more accurately, keep the billions of dollars in revenue their income taxes generate.

Connecticut tax officials track quarterly estimated payments of 100 high-net-worth taxpayers and can tell when payments are down. Of that number, about a half-dozen taxpayers have an effect on revenue that’s noticed in the Legislature and at the Department of Revenue Services.

‘‘There are probably a handful of people, five to seven people, who if they just picked up and went, you would see that in the revenue stream,’’ said Kevin Sullivan, commissioner of the Department of Revenue Services.

With one exception, he said, state officials don’t actually approach the super-rich. ‘‘There isn’t friendly visiting or anything like that, ‘How are you feeling? Doing all right? Doing OK?’ ’’

Yet two years ago, tax officials were alarmed that a super-rich hedge fund owner might leave. They set up a meeting and urged the unidentified taxpayer to stay. The effort was partly successful, with the taxpayer leaving Connecticut but agreeing to keep the hedge fund in the state.

‘‘It would be nice to have both, but at least we didn’t lose both,’’ Sullivan said.

Tax officials in a few states said they do not track individual tax payments, though state budget officials typically follow total quarterly tax payments by the rich to make sure revenue projections hold up.

And some specialists do not believe there is any need to worry about the super-rich moving to avoid high taxes. ‘‘The claims are almost always anecdotal,’’ said Matt Gardner, executive director of the Institute on Taxation and Economic Policy.

Connecticut officials will not say who the super-rich are, citing privacy, but it’s not hard to guess.

Many movers and shakers in and around New York City, the capital of the banking and hedge-fund world, work in or populate the verdant suburbs nearby in Connecticut. They include names like hedge fund owner Steven Cohen, Thomas Peterffy of Interactive Brokers, Ray Dalio of Bridgewater Associates, and Paul Tudor Jones of Tudor Investment Corp.

Combined, their net worth is more than $40 billion, according to Forbes.

Those four declined to discuss their experiences, if any, with Connecticut tax officials. But if they or other big-money individuals or their businesses decide to leave, the danger is real.

In April 2014, super-rich taxpayers in Connecticut and elsewhere shielded their income through charitable donations or other means to avoid a tax hit following the expiration of federal tax cuts.

The result: Connecticut income tax revenue plunged by nearly $281 million, more than 14 percent, compared with the same month a year before. In the 2014 budget year, state income tax revenue was $8.7 billion, more than half the $16.4 billion in total revenue from taxes and fees.

While tax officials in several states said they don’t approach super-wealthy taxpayers to persuade them to stay put, states may call on them if they see a marked increase or decrease in payments, said Ronald Alt, a senior research associate at the Federation of Tax Administrators. But he has never heard of state officials lobbying a taxpayer to stay put.

Arkansas, home to Walmart’s Walton family, the owners of Tyson Foods, and other super-wealthy taxpayers, does not contact them, said John Theis, assistant revenue commissioner. But the state agency reviews what is changing for the wealthiest employers and individuals as part of its revenue forecast.

The super-rich tend to donate to charities when tax laws are in flux. Andrew Hastings, chief development officer at the National Philanthropic Trust, noted the phenomenon at the end of 2012 with the so-called fiscal cliff, the combination of expiring tax cuts and across-the-board government spending reductions.

‘‘It was a windfall for many charities,’’ he said.

Or corporations. It's an art form.

Three of the half-dozen or so super-rich taxpayers in Connecticut use the Greenwich accounting firm Marcum LLP, and each has a yearly income of more than $1 billion. Partner John J. Mezzanotte said he has seen a big step up in charitable giving. 

Same narrative here, even thought the vast majority of this state are in terrible shape.

The migration of the rich affects other taxes, such as the sales tax if wealthy car buyers ‘‘bought their Bentley in Florida instead of Greenwich,’’ he said.

Senator L. Scott Frantz, ranking Republican on the Legislature’s Finance, Revenue and Bonding Committee, said the disproportionate impact on state revenue by one group of taxpayers — in this case, the super-rich — is ‘‘pretty frightening, when you think of it.’’

The more the government relies on the super-wealthy, the more volatile that revenue is, said Sullivan, a former Democratic lawmaker. And raising taxes on the wealthy to attack income inequality has its limits, he said.

The more they must beggar for crumbs like the rest of us.

Tax policy, he said, should not make the state dependent on the rich.

‘‘You don’t want a system that doesn’t ask them to do their fair share,’’ he said, ‘‘but you don’t want a system that makes you so reliant on their fair share that if they all picked up and left tomorrow or died tomorrow you’d be screwed, as they say in the tax business.’’ 

I'm wondering how much actual tax loot was thrown their way in terms of subsidies and credits.


We have LITERALLY returned to the DAYS of LORDS and SERFS.

"Lawmakers revise Malloy plan for local transit development" by Stephen Singer, Associated Press  March 24, 2015

HARTFORD — Legislative leaders, responding to complaints from municipal officials about the taking of property and worries about a loss of local control, have revamped a proposal by Governor Dannel P. Malloy intended to boost economic development near transportation hubs.

Establishing a Transit Corridor Development Authority is a key part of Malloy’s initiative to boost transportation and improve economic development by promoting construction of housing and retail and commercial businesses along corridors such as the Hartford-New Britain bus-only corridor; the planned rail upgrade between New Haven and Springfield, Mass.; Metro-North Railroad; and Shoreline East.

A proposal to give the authority power to acquire property by eminent domain drew opposition from local officials and small-business representatives. Municipal officials also said they worried they would lose control of local sites.

It always does. It's home!

The National Federation of Independent Business told lawmakers that most of its members favor limiting the state’s power to seize property, citing the 2005 US Supreme Court decision allowing the taking of property in New London.

“Here in Connecticut, support for restricting the government’s power of eminent domain resonates soundly,” the group said.

And biparti$anly?

A committee of the Norwalk Common Council voted 7-0 last week opposing the legislation, with eminent domain a flashpoint, Councilman David McCarthy said.

“To take people’s property and convert it even for a reasonable transit project didn’t sit well with any of us,” he said.

The Malloy administration said most of the provisions of the bill were drawn from existing law that created a development authority in Hartford’s capital region.

“We are not breaking new legal ground with this proposal, just extending that model to transit nodes across the state,” Gian-Carl Casa, undersecretary for legislative affairs at the state Office of Policy and Management, told lawmakers.

State Senator Cathy Osten, co-chairwoman of the Planning and Development Committee, announced Friday that lawmakers stripped out the proposal permitting condemnation of property and a requirement that municipalities be required to cooperate with the development authority.

“Part of the lawmaking process is to receive a proposal, get public input on it, and make it better,” Osten, Democrat of Sprague, said in a statement. “I believe that’s what we’ve done in this case.”

Senate Majority Leader Bob Duff, a Norwalk Democrat, said he and Osten were revising the legislation after hearing criticism of the bill at a public hearing in early March.

“What we were trying to do is match the intent of the legislation with the language of the legislation,” he said. “I believe the changes we announced on Friday address most if not all of the concerns.”


Already losing money thanks to us:

"Nearby casinos will siphon $570m from Connecticut, report says" by Michael Melia, Associated Press  April 07, 2015

HARTFORD — The tribes proposing to build new casinos in Connecticut released a report Monday that says new facilities in Massachusetts and New York, if left unchecked, will siphon away $570 million annually in gambling revenue.

The leaders of the Mohegan Tribe and the Mashantucket Pequot Tribal Nation said they were not surprised by the forecast, but they hope the report they commissioned will help inform others including the governor, who has been noncommittal about his position on opening more casinos.

‘‘We want to continue the education process,’’ said Kevin Brown, chairman of the Mohegan Tribe, noting that the proposal for expanded gambling has received mixed reviews. 

I fold. I learned.

The tribes own and operate two rival casinos, Mohegan Sun and the Foxwoods Resort Casino, and are proposing to go in together on small casinos near state boundaries to fight the growing competition. Legislation pending in the General Assembly would authorize up to three new casinos.

By 2019, new casinos in Massachusetts and New York will be taking away $570 million annually in revenue from Connecticut slot machines and table games, and $133 million in nongambling revenue, according to the report by Pyramid Associates, a consulting firm led by gambling market specialist Clyde Barrow. The study also says 5,800 jobs would be lost at the casinos by the end of the decade.

‘‘These figures indicate that the opening of resort casinos in Massachusetts and New York is about to catalyze one of the largest interstate transfers of gaming revenue in recent US history — second only to the transfer from New Jersey’s casinos to Pennsylvania’s casinos that occurred from 2006 to 2014,’’ the report said.

I don't have any more chips.

Under a compact with the state, the two tribes turn over one-fourth of their slot machine revenue to Connecticut — an amount that has been declining steadily since reaching a peak of nearly $430.5 million in 2007. Governor Dannel P. Malloy’s budget projects the state’s share will drop to $254.3 million in fiscal 2017.


Who they are also keeping an eye on, and may God keep an eye on them (still sending troops over there, over there....)

Sorry I didn't give those much of a look-$ee, and I may not be turning back to look at Connecticut for a while. We'll see.