tv Real Money With Ali Velshi Al Jazeera April 7, 2014 7:00pm-7:31pm EDT
unemployed. it's not clear if it has enough votes to pass in the house. >> those are the headlines. i'm tony harris in new york city. "real money" with ali velshi, is coming up in moments at the top of the hour, here on al jazeera america. don't like your taxes, pack up your stuff and move to another state. i'll tell you where to go. and it might not be where you would expect. also they are coming to america why with combed hard cash investors from abroad are buying up mansions, condos, and vacation homes. plus more late flights, more lost bags, but one report puts airline performance at an all-time high. i'm ali velshi, and this is "real money." ♪
this is "real money." you are the most important part of the show, so join our live conversation for the next half hour on twitter or facebook.com. let's talk taxes. one of the biggest items on a middle class family's household budget, and we are not just talking federal income tax, although that does get most of the ink. on average americans paid out 9.8% of their collective income. this of the collective, everybody in the state. this is the latest year we have data for. that didn't found like much to me, but this is on top of the taxes you pay to the federal government. most states, counties, and towns levy taxes on your income, property, and much more things.
total tax and total state and local tax burdens in all 50 states with a very helpful graphic. take a look at this map. the states in red have state and local tax burdens that exceed 10% of the residents collective incomes. that means all of the state's taxes divides by all of the residents. the orange ones are states where the tax burden is between 8 and 10%. and the states in yellow have burdens less than 8%. folks in wyoming have the lowest tax burden in america, paying just 6.9% of their collective incomes in state and local taxes. alaska comes next, just 7% on the incomes in the state, followed by south dakota with
7.1%. new yorkers, where i am, have the highest, paying a whopping 12.6% of their collective income. new jersey is second, with 12.3% followed by connecticut at 11.9%. so basically if i were looking to relocate from new york to a nearby state, i would have move to new hampshire or virginia. they are the closest states with meaningful lower taxes but the commute time would eat up any money i might save doing that. when i talk about state and local taxes i'm just talking about counties and school districts. americans also pay taxes for water abatement districts, all of them eager to tax you. the number of these districts has balloons to 90,056. so your view of the tax picture
have can a lot to do with the city, and county. just some places make you pay more for taxes while others give you more bang for your tax buck. a think tank has released the state local tax burden report every year since 1977. liz is the coauthor of the report. thanks for being with us. >> thanks for having me. >> how are these taxes calculated. >> we start with a measure from the u.s. census bureau, so we can get our aggregate of what the total collected in each state was. and then we make your assumptions about shifting
across state lines. >> what do you mean by that? >> there are a lot of taxes that we pay to states that we don't even live both districtly and indirectly. alaska because of the large share that come from mineral extraction in that state. they bring in a lot of state and local tax revenue from those taxes. but it wouldn't be accurate to say that the alaskians have the highist in the nation. they don't have a personal income tax, and they get a check back from the government each year because of the large reserve fund. so that tax is shifted to people across the country in the form of taxes on electricity and things like that. so we like to account for the fact that it is shifting across state lines. another example is taxes in tourist states such and florida and nevada. we pay sales tax on meals, and
hotels, and that is transferred to our state and local governments. >> the states that have these 7 and 8% total state and local burdens are better for business than the high tax states like new york and new jersey? >> that's a great point to bring up. we like to look at this measure as simply how much. we also have our state tax business index climate that looks at how those taxes are raised. what does the base look like, what does the rate look like. this is looking at how much. and we think that's equally important to examine. >> some of these states with low tax burdens more of it goes on to consumption or property taxes. is there some value that you give to the type of taxes that are levies. >> we do. there are several studies that
look at how different types of taxing effect economic growth and corporate income taxes individual income taxes are the worst followed by sales and property is the best actually. but this report is looking at the overall check shups, that would only be reflected at the end. >> we're under the impression that states and local governments have suffered a lot since the recession as people lost their jobs, people went out of business, and weren't remitting the way they used to be. have a lot of states changed their tax burdens substantially in the last five years. >> there certainly were some trends we saw as to how states tried to mitigate that revenue. some states tried to inkorea individual taxes on higher income earners. that was really different for several states. for example in delaware taxes went up on people earning $60,000 or more. and that's a lot different than
the tax on millionaires in connecticut. but we did see the income turn around and increase finally in 2011 after a decrease the previous three years. so that is good news that we are seeing incomes turn around. >> liz good to talk to you, thank you for sharing this report for us. >> absolutely. thank you. all right not a good start to the week if you are worried about your 401k. the dow jones industrials and s&p 500 both dropped. much of the drop is being blamed on the tech heavy nasdaq. some say these high growth stocks have simply run out of steam. you can expect more volatility when companies report sales results for the first three
months of the year. the new season begins tomorrow afternoon. americans are taking on more debt as the economy improves, a report from the federal reserve shows consumer credit climbed more than 6% in february to $3.1 trillion. clemg loans and auto purchases were the main drivers but that was at the expense of credit card debt which declined for the second straight month. consumer debt as risen every single month since august of 2011. in the real estate game foreign investors usually have something the average american doesn't, a big fat wad of cash. we'll have a look at thatment cog up. >> and later the best and worth -- best and worst airlines in america. keep it right here.
real estate market has been one of the most important and visible signs of the economic impact from the great recession. but rising prices for homes and tougher lending standards have made it harder for first time buyers to get a piece of the american dream. and they face competition from an expanding fool of buyers from outside of the country. and many of the bidders are coming armed with all-cash offers. >> reporter: cash is king in the real estate market. realty track finds 43% of all residential properties in february were purchased with cash. that's up from 20% a year earlier. it's an astounding number. but realty track sees a spike in interest from other countries.
it's all part of a bigger story of what potential homeowners are facing in the housing market? >> there are many multiple offer situations on a property. and a lot of times that cash buyer is winning out, and so it's really becoming a much more prominent part of what is driving this u.s. real estate recovery. >> buyers from canada, china, mexico, india, and uk top the list. the top five states are florida, california, arizona, texas, and new york. most of these buyers are dolling out cash to buy properties because they see u.s. real estate as a good investment, or they are buying vacation homes. here in new york realtors now report seeing a new trend of international buyers eyeing wealthy suburbs because they are moving their families here. realty track says it doesn't see
interest from overseas waning any time soon. mary snow, al jazeera. >> here in new york non-american buyers account for an estimated 40%. and among the buyers getting the most attention are russians. there have been some eye-popping deals including one where a russian businessman paid $88 million for an apartment in manhattan for his daughter. scott reubin is a colleague at the firm of douglas ellerman, and deals with buyers regularly. good to see you. >> you too. thanks for having me. >> these markets have always been a little different from the rest of the country. particularly in the trophy properties in this city. >> yeah, absolutely. and especially in new york where
we have record-breaking deals like that. $88 million. >> but one gets the impression that the russians have played a big part of this. have you seen that? >> yeah, it seems like when you see one of these record-breaking deal there is always a russian involved. >> my colleagues and myself included have seen russian buyers pulling out at all points in the deal, whether they just started looking or whether they actually had a contract out. >> what is the reason behind it? >> they are just uncomfortable because of what is going on with crimea and the u.s. relationship with russia as well. >> worried that maybe the u.s. will hold onto their assets. >> the buyer i was working with gave me a cold response like i'm just not going to do this anymore. he wasn't too specific.
>> a lot of investors who invest in new york, i guess it's tri tricky. it's a good place to hold your money if you are in a country where the currency is fluctuating like the ruble is. >> yeah, there is a sense that new york is a global safe haven, but there is also people from all over the country that diz business in new york. they travel here quite often and want to get a second home here. maybe they send their daughter to school for instance. so it's -- i wouldn't say 50/50, but a lot of them are investors and actually use the place. >> of the -- the 40% of non-americans who are buying property in new york, in your world, how does that break down? >> how does that break down? >> what are the different nationallies who mostly buy properties in new york? >> other than russia, definitely china. people are talking about chai
>> stephani -- china all the time. brazil and koreans. >> interesting. is there a sense amongst the russians that now because of what is going on over there, they are more anxious to have a place here. >> i have recently heard that. that they want to get out of there and actually move here. >> what is the characteristic of these non-american buyers? do they tend to be at higher parts of the market? >> obviously when you see a headline like the $88 million, that's what people are going to pay attention to. but i have worked with buyers who are buying $2 million apartments, and many of them are cash, some financed as well. >> what sense -- let's talk about cash versus finance. again, this is a country-wide phenomenon in that there are cash buyers and a lot of people
who can't buy with cash are left out, because if i'm up against a cash buyer, even if my offer is better will you take the cash deal? >> a lot of times we will because it is a more secure buyer. and if we are talking about condos and new developments which is where foreign buyers are purchasing, it is very competitive. >> and new york is one of those word markets in the country where a contract doesn't mean you end up buying the property. scott good to see you. thanks for being with us. >> thanks for having me. >> run away pension costs have put many states on the brink of financial disaster. rhode island came up with a pension overhaul. now rhode island's own plan is in jeopardy. to stop lawsuits filed against the pension law, negotiators
agreed to a modest pension envies. but the police union has rejected the settlement. it's pretty simple really, a quality airline gets you and your bags there safety and on time. i'll tell you how the biggest airplanes rank. and general motors is fixing the cars, but there's still plenty broken with the company. i'll give you my take when "real money" continues. keep it right here. ♪
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if you have flown anywhere in recent years, you know it is not what it used to be. cramped seats, increasing fairs, overbooked flights are just a few of the headaches. but overall airline performance was the best it has been since the report launched in 1991. the annual airline quality ratings report evaluates the 15 biggest carriers in the united states in four major categories. percentage of on-time flights, mishandled bag, and consumer reports lodges. virgin america is ranked number one. jet blue is next.
. . . you know that u.s. airways and america are now merged. here is the bottom of the list, frontier, united, express jetted, sky west, and congratulations american eagle. i have been asking you, the industry's performance was any highest in 24 years. do you agree? jammal says . . . tell me what you think by tweeting me at ali velshi, or leave me a comment on facebook. a lot of you did tweet me. you have a beef with the airlines. so you might be surprised to here that complains were down a whopping 15% from the year before even as late flights and lost bags increased.
brett joins us, he is the founder of the study, and joins us from washington, d.c. do you get that kind of reaction when you tell people about this? >> i do. it's hard for the public to understand the difference between performance and actual customer service, and this study is about performance. >> and tell me what they tend to be. how do you show improvement? >> we're looking at the factors that are most important to the flying public today. so i want to get there on time with my bag especially if i had to pay extra fees for it, and i want it to be a -- at least -- at the least possible chance to be denied boarding or bumped off of the flight and i don't want to have to complain. so that's what is important to the flying public. >> this business of complaints
to the department of transportation being down, do what do you attribute that? >> well, is there are several factors, it could be the flying public is becoming somewhat wary and accepting of mediocre performance, and they are not complaining as much, because they know there's really not much they can do about it. >> let me talk to you about the top two spots, virgin america, and jet blue. non-legacy airlines are holding those top spots. is there some relationship between the legacy airlines, delta, united, and american, versus these other airlines that are smaller and more nimble? >> there really is, and i think it's the more nimble approach you are observing here, virgin america and jet blue have a culture that promotes excellence in customer service and
friendliness, and i think the flying public responds well to that. >> out of 15 airlines delta comes in at number 4. it has completed its merger, obviously. we have seen a merger between united and continental. mergers usually cause performance to drop, but it hasn't done that with delta. >> well, actually delta does give us reason for hope that post merger an airline can come back and perform at a closer to optimal level, but historically we really, that's an anomaly, because generally they go down in overall kwaul -- quality. >> is that what we're seeing with united? it's at number 12.
>> exactly. it pulled continental down, united went down, and they have never, never recovered. so one of the other interesting things that we're seeing today is that premerger for southwest and air tran, we're seeing both of those airlines going down, and the merger hasn't even hand yet. >> how interesting. brett thank you for being with us. >> thank you. >> today marks the first day that general motors dealers will start repairing some of those 2.6 recalled cars with dereflective ignition switches linked to at least 13 deaths, deaths that could have been avoided if general motors took action sooner. there will be nothing quick or
painless for the families directly effected by gm's ability to deal with this in a timely manner. advocates are calling for gm to create a compensation fund of at least a billion dollars. victims of future crashes can't sue under the bankruptcy action. that's something for ken fineberg and mary berra to keep in mind as they decide what is fair and what is not. all right. it's a busy week for me and this show, but it's always a opportunity for you. on wednesday i'm going to washington where the world bank and the international monetary
hi i'm lisa fletcher, and you are in the stream. diabetes is growing twice as fast in the u.s. as western europe with some 80 million at risk, we discuss the sharp rise in one of the leading causes of death, and the solution many doctors say is surprisingly simple. ♪ my co-host and digital producer, wajahat ali is here bringing in all of your live feedback throughout the show. today is world health day, so we're dedicg