Anthony DiCioccio's Posts (13)

An October 2018 article from the Motley Fool questions the integrity of the online retail giant Amazon, claiming it to be a monopolist in the market. We examine statements from its author, Adam Levine-Weinberg, and contrast them to historic and current antitrust policy. This paper suggests the findings of Adam Weinberg and the Motley Fool are flawed; Amazon is not a monopoly.

 

Amazon Article 20190120E1030.pdf

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Debates over the balance of power between U.S. state governments and the U.S. Federal government have been long-standing and on-going since the nation was established. Moreso, the debate is feverish within the court system over the issue of dual sovereignty and its similarities with double jeopardy as it relates to state and Federal court system. This paper examines the economic impact of the dual sovereign's clause on crime.

 Dual Sovereign Analysis 20190120E1030.pdf

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Tax Revenue from Marijuana Sales

Anthony DiCioccio

Capstone I

Week 9 Event

10/28/2018

           

            The Nevada Dispensary Association (NDA) has announced its economic analysis of the year for recreational marijuana sales. The NDA estimates generating eight billion dollars in tax revenue over the next six years that will be used to fund schools around the state. Tax revenue from marijuana sales totaled $529 million in its first year, not including $69 million generated from state excise tax which allows the dispensaries to operate.  “Starting this next legislative session, we’ll have it more transparent. We’ll actually say here’s 100 million from marijuana that goes to the school district. That part’s been missing because it just goes into a big fund” (Sen. Tick Segerblom).

 

What does this mean for Connecticut?

 

            Connecticut currently maintains nine medical marijuana dispensaries throughout the state and as of last year generated $50 million dollars in tax revenue from sales. However, compared to the state of Massachusetts, which generated $106 million from recreational sales, we can see the potential for growth. In a study done by Forbes magazine states that tax and regulate recreational marijuana sales surpass all states that tax and regulate medical marijuana sales namely because the market is larger for recreation rather than medical use.

 

https://www.forbes.com/sites/andrewdepietro/2018/05/04/how-much-money-states-make-cannabis-sales/#3ed15695f181

https://www.fox5vegas.com/news/marijuana-expected-to-bring-billion-to-nevada-economy-by/article_0a97291c-d9a0-11e8-9fcd-03e919bf8c37.html

 

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Potential Decrease in Cost of Electricity

Anthony DiCioccio

Capstone I

Week 7

10/14/2018

            Orsted, the green energy powerhouse from Denmark is breaking into the American market in a big way. Monday the Danish company announced its acquisition of the American Rhode Island based offshore wind developer, Deepwater Wind. This power move secures Orsted’s place in the American market as the dominant offshore wind energy provider along the east coast and potentially the rest of the US. Orsetd also opened a solar and battery storage development office in Austin, Texas and purchased Lincoln Clean Energy based out of Chicago. Other large companies already operating within the United States such as Equinor and soon Shell Wind Energy, EDF Renewables are struggling to keep pace with Orsted by taking advantage of leasing opportunities off the coast of Massachusetts and New York.

            What does this mean for Connecticut?

            The state of Massachusetts has witnessed competitive bidding from these major green energy companies which are leading to extremely low prices. As Connecticut installs its first series of offshore wind farms in the upcoming years, it too will experience this competitive pricing for electricity. As the cost of electricity lessens, business owners will spend less money on fixed overhead costs. Homeowners will also spend less on their monthly electric bill putting more money into the market. For example, the average Kw/H in Massachusetts is a mere ten cents an hour as opposed to the steep Connecticut standard of seventeen cents.

https://www.greentechmedia.com/articles/read/is-rsted-poised-to-become-the-first-clean-energy-major#gs.IpFmcqM

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BMW Considers Manufacturing in US

Anthony DiCioccio

Capstone I

Week 6

10/08/2018

            BMW AG CEO Harald Kruger has announced at the Paris Motor Show earlier this week that they will allocate more production for the US market. This move is made during a time of uncertainty both for the US and foreign automakers in the industry as no one knows how the market will be affected by the looming tariffs. The new proposed deal would require seventy-five percent of a vehicle's worth to be manufactured in North America in order to remain duty-free, a price floor has also been established at sixteen dollars an hour set at the American USD. Ford Motor Company is responding to the pending tariffs by cutting salaried jobs by eleven billion in a restructuring effort to cut labor cost associated with their products.

This provides yet another opportunity for the state of Connecticut to improve its manufacturing presence and reduce its unemployment. The city of Norwich would be ideal for a manufacturing and distribution center for either BMW or Ford Motor Co. and would revitalize the Eastern portion of the state where unemployment levitates around 4.5%.  

 

https://www.bloomberg.com/news/articles/2018-10-05/ford-prepares-to-cut-salaried-jobs-in-11-billion-restructuring

read:https://www.msn.com/en-us/money/companies/auto-makers-consider-shifting-manufacturing-to-north-america/ar-BBNYtiB?ocid=spartanntp

https://fred.stlouisfed.org/series/CTNEWL1URN

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New Tax Deduction Caps

Anthony DiCioccio

Capstone 1

Week 5

09/29/2018

           

Yesterday the House of Representatives voted to push a 220-191, passing a proposed bill to make current tax cuts “permanent”, it also effectively caps local and state tax deductions at ten-thousand dollars. The bill is likely to face fierce opposition in the Senate by senators representing high tax states such as New York, California, New Jersey, Connecticut, and Massachusetts.  This bill will balance the already existing tax cut policies that took place earlier this year and last year such as the marginal tax rate, which was cut from 39.6% to 37% and corporate tax from 35% to 21%.

What does this mean for Connecticut?

We can expect to see less coming back in our state tax returns for those of us that tally high expenses and qualify for deductions throughout the year. However, this will have no effect on our federal tax returns as it stands right now.

 

And if you’re unfamiliar with how deductions work here’s a short video explaining it.

https://www.youtube.com/watch?v=zTOZU0Cyi2U

http://www.latimes.com/business/la-fi-house-tax-vote-20180928-story.html

 

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Apple Caught in Trade War

Anthony DiCioccio

Capstone 1

Week 4 Event

09/22/2018

            Apple, the Goliath of the technological community has found itself in the middle of an international trade war between China and the US. Last week the Trump administration announced its plan to impose a ten percent tariff on all goods imported from China, creating two hundred billion dollars in revenue. It plans to raise the tariff to twenty-five percent by the end of the year, which is bad news for Apple. The company designs its products in Silicon Valley then manufactures and assembles its products in China and imports them back to American consumers. Apple has benefited from cheap and largely unregulated Chinese labor to create large profit margins, however, with tariffs looming overhead this may come to a screeching halt.

            What does this mean for Connecticut?

            Apple has five locations throughout the state employing just over one hundred people at each location. If sales were to decrease because of the impending tariffs it wouldn’t be a stretch to predict store closures at facilities with low revenue generation. So, if Apple decided to close two stores and terminate between two hundred and two hundred fifty jobs, the ripple would be felt throughout the state. The loss of revenue from income tax, sales tax, other operating costs, and accounting for former employees that would go on welfare benefits could easily be quantified to the millions of dollars. On the one hand, the tariffs would apply pressure on Apple to bring manufacturing jobs back to the United States, reversing globalism and creating a few hundred billion in revenue from tariffs. On the other hand, it would undoubtedly cause a surge in retail unemployment and loss of tax dollars not only in Connecticut but throughout the US for the foreseeable future.

https://www.thestreet.com/investing/stocks/trade-war-could-hurt-apple-stock-14719354?puc=yahoo&cm_ven=YAHOO&yptr=yahoo

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Failing the Retirement Community

Anthony DiCioccio

Capstone I

Week 3 Event

09/14/2018

            The state of Connecticut’s poor economic performance has resulted in an underfunded and quite bleak pension program. According to the Connecticut Business and Industry Association in a May 2018 article, “of the 85.6 billion retirement benefits promised the state has not funded 34.8 billion of pension benefits and 20.9 billion of retiree health care benefits”. Because of the ongoing debt state taxpayer debt moved to eight percent, meaning each citizen in the state owes $53,400 dollars.

Why is this relevant?

The states inability to pay off its long-term debt and reoccurring obligations is putting its A- credit rating in jeopardy which will adversely affect the state’s ability to get loans or borrow money from the federal government and other surrounding states. This will add stress to the still recovering Connecticut economy and impede further recovery and growth in the post-recession era.

 

https://www.dummies.com/education/politics-government/what-does-the-u-s-credit-rating-downgrade-really-mean/

https://www.cbia.com/news/inside-the-capitol/taxpayer-share-connecticuts-debt/

 

 

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Stop BEZOS Act and Employment Implications

Anthony DiCioccio

Capstone 1

Week 2 Event

09/05/2018

            Today senator Bernie Sanders of Vermont introduced the, “Stop Bad Employers by Zeroing Out Subsidies Act”, or the, “Stope BEZOS Act”. In short, the aim of this bill is to, “establish a 100 percent tax on government benefits received by workers at companies with at least 500 employees” (Sen. Sanders). This news comes a day after Amazon reached $1 trillion-dollar market cap stone, meaning the only company valued higher is Apple at $1.1 trillion. Senator Sanders argument is that there is no reason for a company as well of as Amazon should pay their employees so little, some of which barely make ends meet off of their regular salaries. To put it in perspective the average Amazon employee makes roughly $28 thousand a year and the national poverty rate sits at $24 thousand for a family of four.

            On the one hand this would force large companies to provide unskilled laborers with livable wages and the ability to live comfortably. However, as we all know being economists no good deed goes unpunished. CEO’s will likely find ways around this loophole either by automating more of their factory and delivery services or by refusing to hire potential employees if they’re likely to use government benefits. It’s hard to say what the solution to this problem is but it would clearly be beneficial for both parties if the labor force unionized. The reason being, there are already pre-existing laws at the national level that protect employees once they decide to form a union. This would provide Amazon employees the opportunity to negotiate wages and benefits as other laborers have done (Amalgamated Transit Union, Iron Workers Union, Welders Union) around the country. This would also remove the need for government intervention and impinging the free market.

            What does this mean for Connecticut? Amazon actively employs citizens of our state in Windsor and soon in North Haven, which will undoubtedly impact the unemployment rate in a positive manner. North Haven is expected to produce 1,800 full time jobs and Windsor roughly 300. Where the state has failed in being the next Silicon Valley it has succeeded in being a perfect location for distribution and manufacturing and Amazon is playing a large roll in that.

 

https://www.washingtonpost.com/business/2018/09/05/bernie-sanders-introduces-stop-bezos-act-senate/?noredirect=on&utm_term=.7259ad106b02

 

 

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Anthony DiCioccio
Capstone I
Weekly Event 1
08/30/2018

In a rare turn of events Connecticut state senator Chris Murphy applauded the current administration for recently passing the seven hundred and eighty-six-billion-dollar defense spending budget known more commonly as the John McCain National Defense Authorization Act for 2019 (NDAA). The bill is expected to drastically boost manufacturing within the defense technology industries. Connecticut historically is known for its world-renowned firearms manufacturing for both the private sector and the military in addition to other defense technology industries such as Sikorsky, Pratt and Whitney, General Electric, Electric Boat, and Colt.

“We’re going to continue to make two attack submarines every year, we’re going to start making new ballistic missile submarines… We were able to fund a new heavy lift helicopter program that is slated to be built at Sikorsky and we’re continuing to pump out engines for the new joint strike fighter that America is making along with our allies” (Sen. Murphy).


This will provide the state with a once in a lifetime opportunity to create a resurgence of manufacturing and distribution jobs around the state and reduce unemployment, namely in low income area’s that were once thriving manufacturing centers. The question is, will the states leadership capitalize on this next year once the budget comes into effect and will these companies choose to remain in the state?

https://www.wtnh.com/news/business/sen-murphy-promotes-manufacturing-field-in-connecticut/1378940563

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Anthony DiCioccio
08/02/2018

President of Venezuela plans attempts to cut inflation but cutting its paper money assets and allowing for some permissive transactions (136 Characters)

President Nicolas Maduro announced a new economic plan amid the feverish five-year recession that has been plaguing the once prosperous oil exporting nation of Venezuela. Two decades of socialist rule have increased the inflation rate over one million percent by the end of this year, as estimated by macro economists at the International Monetary Fund. The production of crude oil has also suffered drastically and is in danger of coming to a halt.


“The country’s economic turmoil compares to Germany’s after World War I and Zimbabwe’s at the beginning of the last decade. IMF officials said, adding that Venezuela’s economic contraction ranks among the world’s deepest in six decades”.


As we know with the unchecked rise of inflation interest rates will continue to rise and effectively make the Venezuelan bolivar worthless, comparable to that of the Zimbabwean dollar. To paint a better picture the current exchange rate of one US dollar is equal to that of 2,145.92 bolivar’s. Data from Statista indicates the natural rate of unemployment fluxes between 6.8 and 8.5 percent, thus making this a public health issue for both Central and North America. As the country continues to decline both in regard to inflation and unemployment we will see a rise in the number of asylum seekers, legal and illegal immigration that will incur slew of socioeconomic assimilation issues such as vaccinations, healthcare, employment, religion and other varying cultural beliefs. A suggested solution would be for Venezuela to switch to free market trade coupled with incentive driven policies to promote and restore the country’s once thriving oil production.

https://www.foxbusiness.com/markets/venezuela-to-relax-currency-controls-amid-economic-crisis

https://www.statista.com/statistics/370935/unemployment-rate-in-venezuela/


http://www.pewresearch.org/fact-tank/2016/08/04/venezuelan-asylum-applications-to-u-s-soar-in-2016/

 

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The Connecticut Money Pit: Hartford XL Center


Originally built in in the early 1970’s and officially opened January 10th, 1975, with a maximum capacity of roughly 11,000 patrons and 25,000 sq. ft. of space overall the Hartford XL center, formally known as the Hartford Civic Center has been a bottomless pit for the Connecticut tax payer. Plagued with problems such as its questionable structural integrity leading to its roof collapsing in 1978 and not reopening until 1980. Even today with a seating capacity of 16,500 it pales in comparison to its competitors in the region such as Madison Square garden in New York (19,812) and TD Garden in Massachusetts (17,500). This coupled with its historically weak fan base for any team playing at the facility is a no brainer as to why the state of Connecticut cannot attract a professional sports team to this state and ultimately increase revenue.

In recent years this has become more of an issue, after already dumping 35 million into renovating the facility in 2015, Capital Region Development Authority (CRDA) proposed investing a full 250 million into a “top-to-bottom makeover of the 40-year-old arena”, with the support of Governor Malloy. The project would increase the seating capacity up to nearly 20,000 and update the facilities technologies such as the ice making system and displays. These would be justified changes…if the arena was selling out on a regular basis, because of its lack of fan base and small events it generates between a mere 2-3 million meaning it would take nearly 125 years to break even. “I’m not sure a city the size of Hartford needs to have a…20,000 seat arena when we don’t have a professional team that can fill that arena 30, 40, 50, 60 guaranteed nights a year and generate the revenue that’s needed to pay for that size arena” said Rep. Christopher Davis (R-Ellington). Having sat in on the 2017 budget hearing at the state capitol I can tell you not all policy makers are on board with this, one representative even raised the question as to how much it would cost to tear down as opposed to renovate. With a state that already has roughly 50 billion dollars in debt this is a questionable investment of taxpayer money with no guarantee of a return.

http://www.courant.com/business/hc-xl-center-bond-package-20170427-story.html

 

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