Northeast Budget and Tax Committee

[Ѕenator Αverroës]

Thanks, Jones, I had been working off of that source. I just need to calculate how much revenue will come from each of the brackets that I've defined. My hope is that by having a land value tax we will be able to reduce income tax rates markedly.

[Comrade Shmoo]

Income tax
0.0%    $0 - $30,000
1.0%    $30,000 - $60,000
2.0%    $60,000 - $100,000
4.0%    $100,000 - $250,000
6.0%    $250,000 +

These brackets?

[Ѕenator Αverroës]

That's correct, Jones.

[Cincinnatus]

Nice work Nix, Shua, Jones..  This progress actually makes me wish I was in Regional politics at the moment.  Perhaps my break from Northeast politics will soon be over

[Comrade Shmoo]

Mr. Governor, how much are you proposing for the land value tax?

[Ѕenator Αverroës]

NORTHEAST BUDGET - IN PROGRESS

Expenditures

$50 billion - School aid
$45 billion - Economic development
$35 billion - Transportation
$25 billion - Public safety
$25 billion - Higher education
$20 billion - Health services
$15 billion - Tax expenditures
  $5 billion - Environment & energy
  $3 billion - Direct aid & incentives to municipalities
  $2 billion - Government administration

TOTAL EXPENDITURES - $225 billion


Revenue

$85 billion - Land value tax
$65 billion - Sales tax
$45 billion - Income tax
$21.5 billion - Federal funding
     $12.5 billion to primary and secondary education
     $9 billion to higher education
$18 billion - Excise taxes
    2 billion - Other sources of revenue (including fines & fees)

TOTAL REVENUE - $236.5 billion

PROJECTED SURPLUS - $11.5 billion

PROPOSED TAXES

Income tax
0.0%    $0 - $24,999
1.0%    $25,000 - $49,9999
2.0%    $50,000 - $99,999
4.0%    $100,000 - $249,999
6.0%    $250,000 - $999,999
8.0%    $1,000,000 +

Rates remain the same for married couples filing jointly, but brackets are doubled.

Sales tax
4.5% [excludes groceries, clothing, and footwear]

Property tax
$35 per mil on assessed value of unimproved land

Excise Taxes
Gas: 75 cents per gallon
Diesel: 85 cents per gallon
New automobile purchase tax (by curb weight): $500 per kg
Tanning: 33 and 1/3 cents per minute

[Comrade Shmoo]

I'd like to add this:

Income tax
0.0%    $0 - $30,000
1.0%    $30,000 - $60,000
2.0%    $60,000 - $100,000
4.0%    $100,000 - $250,000
6.0%    $250,000 - $1,000,000
8.0%    $1,000,000 +

If you guys have any problems with it, feel free to state them.

[Ѕenator Αverroës]

As we're at a slight deficit with most sources of revenue accounted for, I've added the millionaires bracket to my proposal.

Anyway, this is mostly complete, except for federal funding, and I'll have to wait on Shua for that one. Should I anticipate any?

[Comrade Shmoo]

Thank you, Mr. Governor. I assume we're receiving federal funding, but I have absolutely no idea how much.

To the Shuamobile!

[Ѕenator Αverroës]

I messaged Shua a few days ago about federal funding - no response yet, but we can give him some time.

For now, I'll continue to sift through past legislation to identify major expenses and sources of revenue that I've yet to account for. I'd also be grateful for any more suggestions and questions that you can offer.

[shua]

sorry about the federal funding question - somehow I thought you'd asked something else.   Whatever federal funding there is, is directed to certain programs, so there's not much you can do with it as far as deciding how it's spent.

[Ѕenator Αverroës]

Thank you, Shua. Have other regional budgets simply ignored federal funding in the past?

[shua]

Thank you, Shua. Have other regional budgets simply ignored federal funding in the past?

pretty much, except in the case of stimulus funds that weren't already allocated - but any of that has been used up by now.  however, if you need an idea of how much money is spent in the region in a certain area (ex. education), I can let you know.

[Comrade Shmoo]

Hold on, Mr. Governor. Why did the spending/revenue numbers change on me? They were at $163M each, now they're at $205M of spending and $195M of revenue. Did we find any more insatiable money pits?

[shua]

how are you figuring the revenue, Nix?

[Ѕenator Αverroës]

Thank you, Shua. Have other regional budgets simply ignored federal funding in the past?

pretty much, except in the case of stimulus funds that weren't already allocated - but any of that has been used up by now.  however, if you need an idea of how much money is spent in the region in a certain area (ex. education), I can let you know.

That would be fantastic.

Hold on, Mr. Governor. Why did the spending/revenue numbers change on me? They were at $163M each, now they're at $205M of spending and $195M of revenue. Did we find any more insatiable money pits?

Revenue stood at $195 billion, but I added an addition $2 billion from fines and user fees. This is an estimate based on New York State's actual revenue from fines adjusted based on the region's GDP. I'm not sure what kind of fees we have in place, so these aren't actually included in this figure at the moment.

Spending hasn't changed, I'd just made a typo.

how are you figuring the revenue, Nix?

For most taxes - I've found whatever data I can on New York State and I've increased the figures by 2.5 to bring them in line with the size of the region's economy.

Income tax revenue was calculated based on American Community Survey data on income levels in New York State.

Sales tax revenue is calculated based on the total amount collected in New York State in 2011, multiplied by the regional multiplier and then either reduced or increased to account for the rate that I propose. (I can't remember whether it's higher or lower than New York's.)

Gas tax and automobile registration tax revenue are based on the number of gallons of fuel and the number of autos sold in New York in 2011 multiplied by the proposed tax rate. I reduced each figure by 5% based on the assumption that as my proposed rates are higher than those IRL, consumption would be somewhat discouraged.

Land value tax is calculated based on the assumption that the mean value of a privately-owned acre of land in the Northeast is $15,000. I estimated that 1/3 of land in the region is tax-exempt, publicly owned, or unusable. This is by far the fuzziest calculation that I've made, but I can't find much reliable information.

[shua]

The federal contribution for education is $12 billion for elementary and secondary, and $9.5 billion for higher ed.

Nix, it sounds like you have found some good sources, but for some reason the income tax figures look like they're quite a bit less (maybe half) of I would expect.
Don't forget to add in pension spending.

I have the GDP of the region at 3.2 trillion. Is that what you have?

[Ѕenator Αverroës]

The federal contribution for education is $12 billion for elementary and secondary, and $9.5 billion for higher ed.

Thanks. I've updated the working budget accordingly.

Nix, it sounds like you have found some good sources, but for some reason the income tax figures look like they're quite a bit less (maybe half) of I would expect.

The rates are quite low, and revenue is especially decreased by our not taxing the first $35,000 of income per person. But I think I know where my estimates could be off - I may have underestimated revenue that the region will collect from the highest bracket. I'll re-run the figures by tomorrow night and see what happens. If you have a figure already, I'd be satisfied using that.

Don't forget to add in pension spending.

I'd assumed that was accounted for in the other sections of the budget (i.e. teacher pensions are covered under primary education, police officers are covered under public safety etc.). At least, I though that was how New York State wrote its budget.

I have the GDP of the region at 3.2 trillion. Is that what you have?

On the nose.

[Ѕenator Αverroës]

Recalculated the income tax. Our expected revenue from the income tax is now $45 billion.

As the budgets stands, we have a surplus of over $30 billion. I'd prefer to lower either the income tax or sales tax rate, but I'm open to other suggestions. Committee members, Representatives, and concerned citizens: Let me know what you'd prefer.

[shua]

The site I've been using has pensions listed as a separate category, so that's what I was going from, Organize it  however you want - just remember it's a major part of the budget.

Before you consider a surplus, I'd suggest taking another look to make sure your spending is at an adequate level.

Here are RL figures for major spending for all NE states combined:
Pensions:  37 billion
Education (state level funding only, incl. higher education): 44 billion
Public Safety: 21.6 billion
Transportation: 31.1 billion
(Health care is another major area, but with the national healthcare program there is less need for it in the regions except for public health)

There may be money to be saved in these areas, but greatly reducing spending quickly will have consequences.

[Ѕenator Αverroës]

I'll take another look at the budget document that's served as my primary source. Are your figures for public safety and transportation for state-level spending only?

[shua]

I'll take another look at the budget document that's served as my primary source. Are your figures for public safety and transportation for state-level spending only?

Yes.
I looked at this website, and added the figures for these categories from each state in the region.

[Comrade Shmoo]

If we do have a $33.5 billion surplus, then I'd just like to state two things:

1. Why exactly is this bad?

2. If you're aiming to reduce it, we can afford to lower the sales tax to about 2.5% and still be in the black.

[Ѕenator Αverroës]

1. Why exactly is this bad?

I never said that it was! Saving this money is certainly an option.

[Ѕenator Αverroës]

In response to the irregularities that Shua has pointed out, I've adjusted the budget figures again. I assume that these changes are necessary because New York's budget is, in at least some ways, not reflective of the region as a whole. This shrinks the projected surplus too $11.5 billion.

Assume that pensions for state employees are covered under other spending categories. Most budget documents that I have perused do not itemize pension spending separately.