Posted by Leonard Steinberg on November 3rd, 2013

The New York Post reports that Wall Street bonuses could be about 20% lower this year……many are celebrating this news, yet we should all be concerned: if Wall Street bonuses are lower, its very probable that New York city and state taxes collected will be lower too. Of equal concern is the use of the word “AVERAGE”….the average price of real estate in Manhattan has not jumped that dramatically, yet on the high end pricing has soared in the past year.

The folly of the anger at Wall Street bonuses lies in the delusion as to how important Wall Street income is to the fiscal health of the City and State. Those incomes are taxed very highly. Those taxes pay for all those entitlement programs, law enforcement, etc that is essential to the City. The average Wall Street income is around $ 360,000/year For many thats a fortune. For anyone who lives in Manhattan, they know that $ 360k does not buy that much, least of all a ‘luxury’ apartment. If you should be buying an apartment worth 3x your annual salary, this would imply that the average Wall Streeter can afford an apartment around $ 1,1million. That does not buy you much in Manhattan these days at all.

The drop in bonuses is largely attributed to the drop in bank profits, even though we are seeing bank stock prices soaring recently….due to rising profits? Confusing. Is it possible the ‘average’ Wall Streeter’s bonus is being cut at the expense of the top brass? Surely those at the top would not suffer the same plight? Regardless, reduced profits in areas is being blamed on the Federal governments efforts to curb market volatility……which implies that Wall Streeters thrive on volatility. Hmmmmm.

I am thoroughly confused.