It’s fashionable to rip the Wall Street fat cats, and often justified.
But here’s a “fun fact”: “The reduction in Wall Street bonuses alone will cost New York nearly $1 billion in personal income tax revenues,” as the Associated Press reports.
In “State’s budget woes will outlast the recession,” it adds: “Fewer jobs mean less income tax. . . . Losses for high earners add up fast due to progressive tax rates — a loss of $1 million in capital gains can hurt a state treasury more than dozens of workers losing $40,000-a-year jobs.”
As I blogged earlier, “big government” in California depends on tax receipts from stock options in Silicon Valley, which are deep underwater nowadays.
All this suggests it’s going to be bad for government coffers starting in April — but also at least until next April. No doubt about it.
At the same time, as reported Friday, we’re making more demands for “shovel projects.” I guess money does grow on trees.