Author / Hoosier Econ

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Posts by Hoosier Econ

Located out of Central Indiana. Blogger of economics, politics and societal trends.
by Hoosier Econ

Canada Investing in Indiana’s I-69 Project

Indiana currently is in the middle of the I-69 Highway project. Much of the financing for “Phase 5” made history but many didn’t take notice of why.

The I-69 Section 5 project will upgrade 21 miles of SR 37 (an existing four-lane divided highway) between Bloomington and Martinsville, Indiana to full Interstate standards. The $325 million project includes four new interchanges and four new overpasses, in addition to improvements at existing interchanges and additional travel lanes in urban areas along the corridor.

In April 2014 Canada’s Public Sector Pension Investment Board (which also holds a minority equity stake in Isolux Infrastructure) took a 49 percent equity stake in the concession company through its affiliate Infra-PSP Canada; this represents the first upfront direct investment in a U.S. P3 project by an international public pension fund. The partners reached financial close in July 2014, and construction is scheduled to take 28 months, with the project slated to open by the end of 2016.


JD Supra Advisor noted foreign investment in U.S. infrastructure projects like Indiana is a test run and stability is key for any future investments.

Given the long term nature of a P3 investment, political and regulatory stability is essential to encouraging investment. For overseas investors in the US market, this will require confidence that there is political and public acceptance of private sector investment in infrastructure.

by Hoosier Econ

Net Neutrality Best Summed Up

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by Hoosier Econ

MLB Spring Training Helps Players Pay Less Taxes

Major-League

While baseball purist fans rejoice in spring training opening up, so do the players not just for the game but also their paychecks. Spring training camps are located in Arizona and Florida which helps players pay less since they are legally working in those states. This helps cushion the tax blow they receive from the states they play in during the regular season.

Sean Packard, CPA, who is Director of Tax at OFS. He specializes in tax planning and the preparation of tax returns for pro athletes shared this tax benefit with Forbes.com:

Spring training is an opportunity for players to escape state income taxes on roughly 20% of their income. Professional athletes pay taxes in all states in which they play. This is known as the “jock tax.” Most states calculate a player’s jock tax based on the number of duty days spent inside the state divided by the total days a player works.

Unlike most sports, where preseason training occurs near the team’s home, spring training takes place in one of two states, Florida or Arizona. Florida does not have an income tax and while Arizona does, it does not begin taxing professional athletes until the beginning of their teams’ regular season. This means that duty days spent in the state prior to the season do not count as taxable days. Holding spring training in these two tax havens can save elite players hundreds of thousands of dollars in state income taxes.

Packard provides an example of how money a player can save just at spring training.

The portion of Santana’s salary allocable to spring training under the duty day calculation is $5.355 million. If the Mets held spring training in New York instead of Florida, this income would be allocated to New York and subject to their 8.82% income tax. But because the Florida (and Arizona) climate is more conducive to baseball in February, Santana will save $472,000 in state income taxes.

by Hoosier Econ

Obamacare Enrollees Getting Taxed

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Last week I reported H&R Block website had a new feel good name for one Obamacare tax.  This week new analysis comes from Americans for Tax Reform about more taxes within the law:

The majority (52 percent) of Obamacare enrollees receiving an advance premium tax credit to purchase Obamacare insurance is facing the prospect of paying back $530 of that tax credit to the IRS, according to a new study from H&R Block.  This clawback is reducing the refunds for these taxpayers by 17 percent this filing season.

Families of four earning less than $97,000 are eligible for a credit.  So is a single mother with two children earning less than $80,000 and an unmarried/childless taxpayer earning less than about $12,000.  By definition, these are the lowest income recipients of Obamacare health insurance outside the Medicaid-eligible population.  Higher income taxpayers received no tax subsidy and aren’t facing this tax season surprise.

According to the study, a majority of credit recipients–52 percent–have had to pay back the IRS an average of $530, reducing their refunds by an average of 17 percent.

Read the rest here

by Hoosier Econ

Indiana Teacher Union Membership Up

Indiana teacher unions have gained some members since their big drop off in 2011. EAGnews.org first reported numbers in 2012:

According to internal sources at the Indiana State Teachers Association, membership has dropped by more than 20 percent – from 50,032 in 2010-11 to 39,922 in 2011-12.


The ISTA (Indiana State Teachers Association) now boasts membership at 45,000 which means membership has gone up.

Some districts are still losing union membership. Tippecanoe School District, gave a glimpse in how much the drop off is. Reporting via jconline.com:

The Lafayette Education Association saw a 17 percent drop in the past four school years; membership decreased from 400 members, or 67 percent of Lafayette School Corp. teachers, in September 2011 to 332 members, or 56 percent of teachers, in September 2014.

The Tippecanoe Education Association saw a 26 percent drop during that same time period — dropping from 420 members, or 67 percent of Tippecanoe School Corp. teachers, to 310 members, or 46 percent.

Nationally union membership has dropped double digits the last 30 years.

In 2014, about 49 percent of teachers — or about 2.5 million — were union members. That’s down from 53 percent just a decade ago, according to the federal Bureau of Labor Statistics. In 1984, teachers union coverage was at 64 percent.

by Hoosier Econ

Employment Opportunity: Checking Poop

doctor glove
Via Washington Times –

The federal government is looking for doctors to help monitor suspected smugglers’ bowel movements at John F. Kennedy International Airport in New York, in a solicitation that sounds like it could be something out of the Discovery Channel’s “Dirty Jobs” program.

Doctors must be available round-the-clock in case CBP officers suspect they have a “swallower,” which is what internal drug smugglers are known as. The doctors are charged with X-raying or otherwise examining suspects’ body cavities, and if drugs are found, the work order says “the detainee may be held for a monitored bowel movement (MBM) to wait the passage of the contraband material.”

“CBP regularly intercepts individuals who ingest wrapped packets of illicit drugs such as cocaine, heroin, amphetamines, ecstasy, marijuana or hashish to transport them,” the agency said. “CBP officers apply their keen knowledge, expertise and intelligence to detect and intercept suspected body cavity concealers at our nation’s ports of entry.”

CBP identified 176 “body cavity concealment incidents” in 2014, which was down from 187 the previous year.


You can read the rest here.

by Hoosier Econ

Who Qualifies for the Army?

army

Former Florida Congressman Lt. Colonel Allen West recently posted a scathing piece denouncing stereotypes military recruits face in segments of American society. Within the piece he outlined some interesting stastitics the Army faces in recruiting future soldiers.

Here is the breakdown:

The recruiting pool for the U.S. Army is individuals between 17 and 24 years old. 71 percent would not qualify to join the Army.

What are the major disqualifiers? First, some 31 percent cannot join because of multiple felonies and other moral issues such as drug use or other law violations. The other major category that disqualifies 17 to 24-year-olds is lack of fitness/obesity and other medical issues.

Only two percent can’t qualify for the Army now due to aptitude/academic issues, so the major disqualifying points have to do with moral and physical standards.


Here are the numbers broken down of the qualified applicants:

Now understand, of the 29 percent who could qualify, here is the breakdown that LTC Patton and his staff shared with me. Only 15 percent of individuals age 17 to 24 have any interest in joining the military.

by Hoosier Econ

Lots of Erections at the Pentagon

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The unfortunate part of government spending is taxpayers don’t get to know what is being spent until it gets spent. CBS News uncovered some “dysfunctional” spending from the pentagon in a recent report:

According to the Military Times, data from the Defense Health Agency indicate the U.S. Department of Defense spent $41.6 million on Viagra and $84.24 million total on drugs for erectile dysfunction in 2014.

Since 2011, the bill for covering drugs like Viagra, Cialis and Levitra for active and retired military personnel and eligible family members totalled $294 million — nearly as much as four U.S. Air Force F-35 Joint Strike Fighters, says the Military Times.

The DoD first began covering the cost of Viagra prescriptions in 2012, and currently another seven types of erectile dysfunction medications are paid for under the federal agency’s health plan. Of the 1.18 million prescriptions filled in 2014, 905,083 were for Viagra, at a cost of $41.6 million. Cialis was the second most commonly prescribed ED drug, with 185,841 prescriptions totaling $22.82 million. Revatio, the priciest ED drug, was prescribed the least with 1,699 prescriptions in 2014 for a total cost of $2.24 million.

You can read the rest of the article here.

by Hoosier Econ

The Marijuana Spin is Mind Boggling To Watch

Smoking marijuana is a big topic of the day. While the use of this product doesn’t offend me the talking points are downright absurd. I have more respect for people if they just say they want to use it to get high than some of the things I’ll comment down below.

My [Insert Person I Know] Got Multiple Years in Prison for Just Having Marijuana

This is the most common thing I hear in the legalization of marijuana debate. I can tell you from my past and current experience in the law enforcement arena that having a small quantity of marijuana never puts someone in prison for 50 years. In the year 2000 I was a rookie cop and riding along with my FTO. We pulled a car over and smelled marijuana with the driver fully intoxicated from marijuana. (LEGAL NOTE, marijuana field tests were evolving by the minute during this time period) I asked if they had been smoking and they said yes. Upon search of the person we found two marijuana joints. I looked at my FTO in trying to judge how we were to precede. He told the driver to put both joints on the ground and stomp on them. The guy obliged. We had him call for a ride and had his vehicle towed. Please note we didn’t send him to a maximum security prison. I asked my FTO why we didn’t make an arrest. He explained the courts were already swamped with wife beaters and bad check writers, a judge wouldn’t want to deal with “two joints”.
police marijuana

I do come across the stories of people knowing someone who went to prison over marijuana. The stories are compelling and usually critical parts are left out. Most of the time it takes a very basic search of someone’s criminal past to understand why they went to prison for just having marijuana. “But my uncle having marijuana is a non-violent crime and now he sits in a prison”. Well, after looking up your uncle I found he also did multiple stints in prison for robbery, car theft and selling drugs within a school area. I guess the whole “following your parole/probation criteria” is thrown out because selling weed is a non-violent crime.

Marijuana Will Bring in Tax Revenue

Bringing tax revenue to the church of government absolves a lot of sin in American society. When the marijuana debate took off and Colorado instituted legalization, the tax revenue claims were touted by Colorado Governor John Hickenlooper of $100 Million year tax revenue (read “COLORADO’S POT REVENUE GOES UP IN SMOKE”) colorado governor

Some would see this as just a financial prediction, but it really was a societal claim that all the marijuana smokers would come out of the shadows and purchase weed in a proficient way. Through many conversations I had with people who believed this I emphatically stated that if you’re currently getting good weed from Frank the dope dealer, what would compel you to drop him and go to a marijuana shop to purchase it at a higher price?

Marijuana supporters usually come back with a defensive posture of some tax revenue is better than none, even if the financial analysis is way off. So be it, but just remember, government doesn’t make tax revenue projections for nothing. They usually make the projection and already spend the money and let the chips fall for when revenue actually comes in (surplus or deficits).

MEXICAN DRUG CARTELS

These guys are the main players of supplying most of the drugs in America. They control the entire country of Mexico, have supply routes that make UPS and FedEx blush and are deliberately let in on a constant basis by the United States Federal Government through lax border security. So how does this relate to the legalization of marijuana? Because many Americans believe once you legalize, these drug cartels will simply disappear. No they won’t and will only get more brutal and switch to different drugs (heroin is going into Chicago and being dealt right here in Indiana). The cartels operate in almost 1,300 cities and in sworn testimony September 2014 the DEA said Colorado legalizing only make them send more drugs. The cartels sent more weed there because the black market on marijuana would grow due to prices skyrocketing in legally approved shops. Cartels are also beginning to shakedown shop owners. Just like a scene out of Sopranos collecting neighborhood taxes, the cartels are walking into the shops and saying, “Monthly fee will keep the fires away”. Mexican-gang-and-drug-cartel-routes

What is the solution? Marijuana activists should become friends real quick with the philosophy of the US Military enforcing the border. You set up an aggressive strategy of the military standing on the border and you cut off easily 80% of all drugs coming from Mexico and South America. State and federal governments are coming with regulations on the selling and chemical makeup of marijuana, once this happens legal marijuana sellers will be undersold by the cartels. They are much more organized than Johnny the dope dealer with a permit. Only way to give legal sellers a chance to survive and lessening violence law enforcement see with cartels will be closing off the border.

Edited by SJ Himes