That's one of the reason I do not invest in China......
http://bit.ly/7CHI2
Happy investing!!!
Saturday, 27 June 2009
The Best State for Business
Directorship.com has announced 2009 The Best State for Business. They ranked states based on the following criteria; Litigation; Fortune 500; Tax Climate; Cost of Living; Cost of Labor; Economy; Quality of Life; Education.
- Texas again has been chosen as No.1 state and did well in Litigation, Fortune 500, Tax Climate, Economy and Quality of Life.
- Other states did well in this ranking are Virginia(proximity to Washington DC and its funding), Utah(Litigation, Tax Climate & Quality of Living) and South Dakota (Tax Climate, Labor Cost & Quality of Living).
- On the contrary, large economy - high cost states such as New Jersey, California and New York did poorly and ranked bottom 10. No wonder many business are out-migrating from these states to above-mentioned business friendly states.
This data clearly suggest advantage and era of Texas.
Happy Investing!!!!
- Texas again has been chosen as No.1 state and did well in Litigation, Fortune 500, Tax Climate, Economy and Quality of Life.
- Other states did well in this ranking are Virginia(proximity to Washington DC and its funding), Utah(Litigation, Tax Climate & Quality of Living) and South Dakota (Tax Climate, Labor Cost & Quality of Living).
- On the contrary, large economy - high cost states such as New Jersey, California and New York did poorly and ranked bottom 10. No wonder many business are out-migrating from these states to above-mentioned business friendly states.
This data clearly suggest advantage and era of Texas.
Happy Investing!!!!
Thursday, 25 June 2009
Are Californians (and New Yorkers) paying too much state tax?
This is follow up on previous posting about Californian's federal tax over payment.
Firstly, let's review each state's 2010 state budget, projected deficit and its percentage as follows.
2. New York
3. California
Firstly, let's review each state's 2010 state budget, projected deficit and its percentage as follows.
- Below list is based on the size of state budget. You can see that large budget size of large GDP states such as California, New York, Texas, New Jersey, etc....
- Ranking of states with largest projected budget deficit are; 1) Californial 2) Nevada; 3) Arizona; 4) New York; 5) Illinois; 6)Connecticut; 7) Florida; 8) Washington; 9) Wisconsin; 10) Louisiana. High-cost/large economy state such as CA/NY and real estate bubble burst states such as NV/FL/AR are leading the pack.
- Ranking of states with smallest projected budget deficit are; 1) South Dakota, 2) Arkansas; 3) Nebraska; 4) West Virginia; 5) Indiana; 6) New Mexico; 7) Maine; 8) Alabama; 9) Michigan; 10) Ohio; 11) Texas. Small states that are located inland (away from east/west coast) are faring very well (though I was very surprised about Michigan's low deficit projection).
| States | Budget | Deficit | Percentage |
| All States Total | $ 705.82 | $ 133.40 | 18.90% |
| California | $ 101.19 | $ 33.90 | 33.50% |
| New York | $ 61.72 | $ 17.90 | 29.00% |
| Texas | $ 46.05 | $ 3.50 | 7.60% |
| New Jersey | $ 32.41 | $ 7.00 | 21.60% |
| Pennsylvania | $ 28.57 | $ 4.80 | 16.80% |
| Illinois | $ 28.34 | $ 7.00 | 24.70% |
| Ohio | $ 28.17 | $ 2.00 | 7.10% |
| Massachusetts | $ 28.09 | $ 5.00 | 17.80% |
| Florida | $ 25.66 | $ 5.80 | 22.60% |
| Michigan | $ 23.19 | $ 1.60 | 6.90% |
| North Carolina | $ 21.50 | $ 4.60 | 21.40% |
| Georgia | $ 21.38 | $ 3.10 | 14.50% |
| Minnesota | $ 17.49 | $ 3.20 | 18.30% |
| Virginia | $ 17.31 | $ 1.80 | 10.40% |
| Connecticut | $ 17.30 | $ 4.10 | 23.70% |
| Maryland | $ 15.20 | $ 1.90 | 12.50% |
| Washington | $ 15.04 | $ 3.40 | 22.60% |
| Wisconsin | $ 14.22 | $ 3.20 | 22.50% |
| Indiana | $ 13.16 | $ 0.72 | 5.50% |
| South Dakota | $ 11.85 | $ 0.32 | 2.70% |
| Tennessee | $ 11.11 | $ 1.00 | 9.00% |
| Arizona | $ 10.07 | $ 3.00 | 29.80% |
| Kentucky | $ 9.30 | $ 0.82 | 8.80% |
| Louisiana | $ 9.22 | $ 2.00 | 21.70% |
| Missouri | $ 8.96 | $ 0.92 | 10.30% |
| Alabama | $ 8.31 | $ 0.54 | 6.50% |
| Colorado | $ 7.69 | $ 1.00 | 13.00% |
| South Carolina | $ 6.90 | $ 0.73 | 10.50% |
| Kansas | $ 6.59 | $ 1.10 | 16.70% |
| Oklahoma | $ 6.52 | $ 0.60 | 9.20% |
| Iowa | $ 6.39 | $ 0.78 | 12.20% |
| District of Columbia | $ 6.25 | $ 0.65 | 10.40% |
| New Mexico | $ 6.05 | $ 0.35 | 5.70% |
| Utah | $ 5.96 | $ 0.72 | 12.10% |
| Hawaii | $ 5.73 | $ 0.68 | 11.90% |
| Mississippi | $ 5.11 | $ 0.48 | 9.40% |
| Arkansas | $ 4.56 | $ 0.15 | 3.20% |
| West Virginia | $ 3.92 | $ 0.20 | 5.10% |
| Nevada | $ 3.79 | $ 1.20 | 31.70% |
| Delaware | $ 3.64 | $ 0.56 | 15.30% |
| Nebraska | $ 3.53 | $ 0.15 | 4.30% |
| Rhode Island | $ 3.28 | $ 0.45 | 13.70% |
| Maine | $ 3.05 | $ 0.18 | 5.80% |
| Idaho | $ 2.96 | $ 0.41 | 13.90% |
| New Hampshire | $ 1.55 | $ 0.25 | 16.10% |
| Vermont | $ 1.22 | $ 0.25 | 20.80% |
| Oregon | DK | DK | DK |
* By the way, as you can see from above, California's budget deficit in 2010 is projected around $34 billion. California is making approx. $250 billion in Federal tax payment and get only 80% return. It means California overpays approx. $50 billion in Federal tax, more than enough to fill the 2010 state budget deficit!
Then, let's look at 2009 State Business Tax Climate Index.
Below is the states with WORST tax climate.
1. New Jersey
2. New York
3. California
4. Ohio
5. Rhode Island
6. Maryland
7. Iowa
8. Vermont
9. Nebraska
10. Minnesota
In large states like CA/NY, states government have very high operating expense so they are charging very high tax to residents and business. As results, massive out-migration from California and New York is happening right now.
2. New York
3. California
4. Ohio
5. Rhode Island
6. Maryland
7. Iowa
8. Vermont
9. Nebraska
10. Minnesota
Here is the ranking of the most favorable tax states. Many states in the top 10 has are ones without state personal income tax such as Wyoming, South Dakoda, Nevada, Florida and Texas.
1. Wyoming
2. South Dakota
3. Nevada
4. Alaska
5. Florida
6. Montana
7. Texas
8. New Hampshire
9. Oregon
10. Delaware
This proves my argument --- "Why Californians are charged too much state tax?" No wonder so many high income family are paying almost 50% of their income on both federal and state tax!
In addition, California and New York started enforcing more tax to fill the budget deficit.
"6 States Hitting Residents With Big Tax Hikes" - WSJ.com
http://bit.ly/G2Edo
This will further accelerate the out-migration from California and New York to the low tax - strong economy state like Texas and delay the recovery from recession. In order to maintain long-term strength, California (and New York) has to stop raising tax, cut state budget and downsize service and operations.
Or should California (and New York) go separate ways from United States of America?
What do you think?
Happy Investing!!!!
Friday, 19 June 2009
Is Californians (and New Yorkers) Paying Too Much Federal Tax?
As you know, we hear quite bit about California state's budget crisis. GDP of California is equivalent of that of France, 6th largest economy in the world. Thus everyone loves to talk about California's budget crisis.
Having said that, I think it is worth analyzing Federal and States' tax system and dig down the real issues.
Let's look at Federal Tax system first. In Federal Tax system, personal income tax and corporate tax represents majority of total tax revenue; 83% and 13% respectively. These tax are progressive tax.
The issue of progressive tax is that residents in high income and high cost of living states such as California and New York are taxed at much higher rate than the residents from low income and low cost of living states.
Below is the ranking for Per Capita Tax Burden and Return on Federal Tax Dollar: Fiscal 2005. Residents in state of New Jersey receive 65 cents per capita though they pay $1 for Federal tax.
http://bit.ly/wTXDJ
http://bit.ly/oNHCE
Having said that, I think it is worth analyzing Federal and States' tax system and dig down the real issues.
Let's look at Federal Tax system first. In Federal Tax system, personal income tax and corporate tax represents majority of total tax revenue; 83% and 13% respectively. These tax are progressive tax.
The issue of progressive tax is that residents in high income and high cost of living states such as California and New York are taxed at much higher rate than the residents from low income and low cost of living states.
Below is the ranking for Per Capita Tax Burden and Return on Federal Tax Dollar: Fiscal 2005. Residents in state of New Jersey receive 65 cents per capita though they pay $1 for Federal tax.
http://bit.ly/wTXDJ
http://bit.ly/oNHCE
- The return for California and New York residents is 0.80 and 0.82 respectively. I believe return for high income residents in NY, LA and SF metropolitan area is much lower. I
- On the contrary, residents in Mississippi、New Mexico、Alaska and Louisiana receive approx. $2 on $1 Federal Tax payment.
- While Texas is third largest economy after California and New York, the return is 0.97, much higher than CA/NY residents. I guess federal government is afraid the independence movement of Lone Star so they put "moderate" federal tax burden on the state of Texas;)
Per Capita Tax Burden and Return on Federal Tax Dollar: Fiscal 20051
http://bit.ly/Z78te
Rank State Return
50 New Jersey 0.65
49 Nevada 0.67
47 Conneticut 0.73
48 Minnesota 0.73
46 New Hampshire 0.75
45 Illinois 0.78
43 Delaware 0.80
44 California 0.80
42 New York 0.82
41 Colorado 0.83
40 Massatusetts 0.85
39 Wisconsin 0.88
38 Washington 0.89
37 Oregon 0.93
36 Michigan 0.94
35 Florida 0.95
34 Texas 0.97
33 Rhode Island 1.01
32 Georgia 1.03
31 Ohio 1.06
30 Indiana 1.07
27 Pennsylvania 1.08
28 North Calorina 1.08
29 Utah 1.08
23 Vermont 1.09
24 Iowa 1.09
25 Nebraska 1.09
26 Wyoming 1.09
22 Kansas 1.13
20 Arizona 1.19
21 Idaho 1.19
19 Tennesee 1.29
18 Maryland 1.30
17 Missouri 1.32
15 Oklahoma 1.35
16 South Calorina 1.35
14 Arkansas 1.40
13 Maine 1.41
11 Hawaii 1.43
12 Montana 1.43
10 South Dakota 1.48
8 Kentucky 1.51
9 Virginia 1.51
7 Alabama 1.63
6 North Dakota 1.65
5 West Virginia 1.75
4 Alaska 1.83
3 Louisiana 1.85
2 New Mexico 2.00
1 Missisippi 2.02
* If you are interested in per capita expenditure by states and its allocation, please download "Consolidated Federal Funds Report 2006" and look at page ２４.
* Federal tax expenditure per capita in Washington DC is approx. $70,000! No wonder Washington DC economy is booming now.
California and New York both face approx. 30% state tax revenue deficit on 2010 budget. I bet, if CA and NY receives 100% return on its federal tax burden, story should be quite different. But, under current US legislation, non-coast states have much more say and control over federal tax allocation.
I personally think federal government's exploitation of California and New York (and NJ/CT) is the key issue facing growth of their economy. State governments had to charge high state tax to compensate for low return on federal tax. Therefore business and residents are migrating to low-tax states.
That's it for today. Please look for follow up posting on state tax issues.
Happy Investing!!!!!
Thursday, 18 June 2009
City Brand Index 2009 by Anholt-GFK Roper
Anholt-GfK Roper City Brands Index report shows consumer perception of the image and reputation of 50 major cities worldwide with the following criteria.
- Presence (knowledge of the city and perception of its global contribution)
- Place (cleanliness and climate)
- Pre-requisites (affordable accommodation and quality of public amenities)
- People (friendliness and cultural diversity)
- Pulse (interesting events, activities, and lifestyles)
- Potential (perception as good place to do business, to find a job, and to go to university/college)
1. Paris
2. Sydney
3. London
4. Rome
5. New York
6. Barcelona
7. San Francisco
8. Los Angeles
9. Vienna
The following are the top three ranked cities in each category:
1. London
2. New York
3. Paris
1. Sydney
2. Rome
3. Paris
1. Sydney
2. Toronto
3. Amsterdam
1. Sydney
2. Toronto
3. Melbourne
1. Paris
2. New York
3. Rome
1. London
2. New York
3. Sydney
I believe city branding has strong correlation with real estate price as all of top 10 cities are known for quite expensive real estate price. High awareness and favorable image create demands for real estates, especially among highly educated workforce who can chose to live wherever they want. This is how so called bubble proof real estate superstar cities!
For the real estate speculation, it is very strategic to identify 2nd or 3rd tier cities that have potential to be in 1st tier. These up-and-coming cities have major appreciation potential.
Lastly, I would also recommend for investors to review various rankings and understand when choosing your city to invests.
Liveability Ranking by Economist.com
Mercer Quality of Living Index 2009
Best Cities to Live in 2009 (Askmen.com)
Billionaire Cities
Happy Investing!!!
The Best And Worst Cities For Recession Recovery
Forbes.com, with the data from economic forecasting firm Moody's Economy.com introduced a ranking of The Best And Worst Cities For Recession Recovery.
Top 10 cities for recession recovery is as follows:
- Austin Tx is ranked No.1, driven by educated workforce, strong IT industry and recession proof University of Texas and State Capital.
- Four Texas cities are listed in Top 10. This is proof of "Era of Texas" has arrived.
- For other cities in Top 10, each city has extraordinarily strength such as Washigton DC - government spending, Seattle - highly educated workforce and IT industry, Fayettevile - Walmart HQ, Huntsville - booming IT industry, McAllen Tx - trade with Mexico, etc...
Conversely, the worst 10 cities for recession recovery is as follows:
- 6 out of the worst 10 cities are in California. "The end of the era of California" seems to be really happening.
- Flint and Detroit was ranked Worst 1 and 3 respectively because of decline of US auto industry. They are constantly ranked "worst" in many economic indicators.
- Hit hard by financial industry meltdown, New York metro area's GMP (Gross Metropolitan Product) is forecast to go down by -3.8% by the end of 2010. Since NY metro's real estate price has not declined much, Deutche Bank economist expect additional 30-40% decline.
Real estate is location, location & location! Each metropolitan areas have entirely different economic base and growth potential. Since the biggest advantage of the real estate investment in US is long-term capital gain, it is safest bet to invest in high growth areas.
Happy Investing !!!!!
Top 10 cities for recession recovery is as follows:
- Austin Tx is ranked No.1, driven by educated workforce, strong IT industry and recession proof University of Texas and State Capital.
- Four Texas cities are listed in Top 10. This is proof of "Era of Texas" has arrived.
- For other cities in Top 10, each city has extraordinarily strength such as Washigton DC - government spending, Seattle - highly educated workforce and IT industry, Fayettevile - Walmart HQ, Huntsville - booming IT industry, McAllen Tx - trade with Mexico, etc...
| Rank | Metropolitan Stastical Area | 2009GMP | 2010GMP | Growth | Unemployment |
| 1 | Austin-Round Rock, Texas | 72.4 | 77.7 | 7.3% | 5.8% |
| 2 | Fayetteville-Springdale-Rogers, Ark. | 13.9 | 14.5 | 4.3% | 5.0% |
| 3 | Boulder, Colo. | 15.6 | 16.3 | 4.5% | 5.7% |
| 4 | Huntsville, Ala. | 16.1 | 17.2 | 6.8% | 6.1% |
| 5 | San Antonio, Texas | 66.3 | 68.4 | 3.2% | 5.4% |
| 6 | Mobile, Ala. | 13.5 | 14.5 | 7.4% | 8.5% |
| 7 | Dallas-Fort Worth-Arlington, Texas | 274.6 | 287.9 | 4.8% | 6.0% |
| 8 | Washington DC-Arlington-Alexandria | 298.7 | 308.1 | 3.1% | 5.6% |
| 9 | McAllen-Edinburg-Mission, Texas | 15.6 | 16.6 | 6.4% | 8.9% |
| 10 | Seattle-Tacoma-Bellevue, Wash. | 168.3 | 179.8 | 6.8% | 8.0% |
Conversely, the worst 10 cities for recession recovery is as follows:
- 6 out of the worst 10 cities are in California. "The end of the era of California" seems to be really happening.
- Flint and Detroit was ranked Worst 1 and 3 respectively because of decline of US auto industry. They are constantly ranked "worst" in many economic indicators.
- Hit hard by financial industry meltdown, New York metro area's GMP (Gross Metropolitan Product) is forecast to go down by -3.8% by the end of 2010. Since NY metro's real estate price has not declined much, Deutche Bank economist expect additional 30-40% decline.
| Rank | Metropolitan Stastical Area | 2009GMP | 2010GMP | Growth | Unemployment |
| 1 | Flint, Michigan | 11.0 | 9.3 | -15.6% | 14.2% |
| 2 | Fresno, Calif. | 30.1 | 29.4 | -2.3% | 15.5% |
| 3 | Detroit-Warren-Livonia, Mich. | 160.0 | 149.8 | -6.4% | 13.5% |
| 4 | Modesto, Calif | 14.5 | 14.2 | -2.1% | 16.8% |
| 5 | Salinas, Calif. | 13.8 | 13.4 | -2.9% | 11.7% |
| 6 | Bakersfield, Calif. | 23.8 | 23.1 | -2.9% | 14.8% |
| 7 | New York-N. NJ-LI, N.Y.-N.J.-Pa. | 988.0 | 950.0 | -3.8% | 7.6% |
| 8 | Stockton, Calif. | 18.1 | 17.8 | -1.7% | 15.6% |
| 9 | Youngstown-Warren-Boardman, Ohio | 16.3 | 15.4 | -5.5% | 12.8% |
| 10 | Los Angeles-Long Beach-Santa Ana, Calif. | 597.0 | 581.0 | -2.7% | 10.1% |
Real estate is location, location & location! Each metropolitan areas have entirely different economic base and growth potential. Since the biggest advantage of the real estate investment in US is long-term capital gain, it is safest bet to invest in high growth areas.
Happy Investing !!!!!
Sunday, 14 June 2009
How the Obamas Made Washington Hot!
Following my posting about how Washington DC is now awash with money, Washington DC is also HOT in terms of glamorousness!!!
According to people.com, DC is suddenly a magnet for Hollywood starlets, reality TV shows and high-profile idealists wanting to get in on a little high-minded action.
After splitting from The Office nice guy John Krasinski, Parks & Recreation star Rashida Jones, 33, has been hanging with President Obama's 28-year-old speechwriter Jon Favreau. "It's not serious," a source reveals, but they are an item. Meanwhile, taking a break from her doctor duties at the Oceanside Wellness Center, Private Practice star Kate Walsh, 41, has been spotted cuddling with another young administration hotshot, Sean Smith. How's this for a title? Smith, 38, is Deputy Assistant Secretary for Public Affairs for the U.S. Department of Homeland Security.
I guess pretty women always follow money and power!
Anyway, It is amazing how one man can change the branding of Washington DC so fast and so dramatically. No wonder central Washington DC's real estate market is quite steady.
Happy investing!!!!
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