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New York to tax luxury second homes in NYC

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Re: New York to tax luxury second homes in NYC

#121

Post by WarmWash »

9dev wrote: post #23
busterarm wrote: post #12

Earlier quoted context omitted.

The top 1% of NYC residents contribute 40-48% of all personal income tax collected in NYC. When you extend that to Top 2.5% you cross 51%. Personal Income Tax accounts for around 31% of collected NYC tax revenue. "The rich" also pay property tax. NYC's poorer residents generally don't have property to pay tax on. Everyone pays sales tax equally. So how exactly are the ultra rich paying "less taxes"?

This claim is often repeated but simply misleading. Taxable income is only a tiny fraction of the wealth of ultra rich folks - many even take symbolic wages, because their real compensation happens in stock, which they can use to lend effectively infinite money. There's a great episode of the Ezra Klein Show on this topic too[0]. [0]: https://open.spotify.com/episode/3Jjy4drElYHNMRtxVQPENR?si=5...

I'm someone who uses the same "loophole" the wealthy use to "avoid" paying taxes. Turns out you really only need around ~$100k to unlock it, and you still will pay ~0.5% interest over the overnight lending rate. But it's about as rock bottom as any non-united-states-government will get a dollar denominated loan for.

But it is not a tax dodging scheme. It's a tax deferral scheme wrapped in a risk-on loan package, that is used almost entirely to maintain ownership of a company rather than to defer taxes. On smaller scales you can use it to unlock money tied up in stocks, if you think the stock will keep going up (if the stock falls, you now might get margin called as well as coming out worse then just getting a regular loan).

Re: New York to tax luxury second homes in NYC

#122

Post by AdrianB1 »

fumar wrote: post #75
AdrianB1 wrote: post #61

Earlier quoted context omitted.

Wealth distribution is a false flag. Rain distribution across the globe is not equal, solar light distribution is not equal and they impact people's life more than wealth distribution. USA and the entire planet's population is at record high in living standards and wealth, but some people are still unhappy because not everything is perfectly equal and at zero entropy like the thermal death of the universe: this is mo…

A false flag to what?

A false flag to fight for. A wrong purpose in life.

Re: New York to tax luxury second homes in NYC

#123

Post by giantg2 »

9dev wrote: post #113
phyzix5761 wrote: post #103

Earlier quoted context omitted.

He pays income tax just like everyone else. But the majority of his money is in investments, which many Americans already do as well with 401k and personal brokerage accounts. The people who can't afford to invest like that already pay close to 0% income tax as 40%-60% of households, historically, have paid 0% income tax in the US.

They still pay payroll taxes, among others, which disproportionately affect poor people.

Payroll taxes were capped because the related benefits were capped. We could uncap either or both ends of that. Although removing the cap should have been unnecessary if the government acted responsibly, and the removal of the cap would not force them to act responsibly in the future.

Re: New York to tax luxury second homes in NYC

#124

Post by seba_dos1 »

giantg2 wrote: post #32
jmclnx wrote: post #7

> an initiative to appease Mayor Zohran Mamdani and liberal voters Taxing the rich is not a Liberal thing, but the Rich is calling it that because they do not want to pay any taxes at all. He was elected because people are starting to feel real pain and seeing the ultra rich paying far less taxes then they are. If it was up to me, I would tax all the second homes above 5 million USD and add a Luxury Tax on all valuab…

"seeing the ultra rich paying far less taxes then they are." Is this actually true? I thought looking at the aggregates that the top 10% pay something like 1/3rd of all income/cap gain taxes.

The ultra rich make up only a tiny minority of the top 10%. The majority is much closer to the top 90% than to the top 1%.

Re: New York to tax luxury second homes in NYC

#125

Post by smallmancontrov »

phyzix5761 wrote: post #114
smallmancontrov wrote: post #108

Earlier quoted context omitted.

This post makes the mistake of assuming that everyone is on board with the "unrealized gains are totally different from income and should never ever be taxed a penny because that would be communism and implode the economy and kill kittens" hustle. It's a good hustle, because it takes precision to argue against and it's built around a kernel or two of truth, but these two kernels are firmly planted in a gigantic monum…

Would you rather they hoard the money under their mattress or invest it back into the economy? Like I explained, the reason unrealized gains are not taxed is because they generate more tax revenue than if the individuals pulled out the money, made a 1 time lump sum tax payment, and hoarded the rest. Its not tax avoidance at all. Its a way to multiply tax revenue as that capital is used through numerous transactions t…

It's exactly the other way around. The USA is not a developing economy, we do not suffer from a lack of capital and abundance of investment opportunity, we suffer from an abundance of capital and lack of investment opportunity. The average American billionaire has no idea what to do with a marginal dollar, so he just bids up assets with it and maybe punts on spaceships or something. The average American, in stark contrast, spends the dollar satisfying very real as-yet-unsatisfied consumptive wants and needs, at which point the dollar gets spent and taxed and spent and taxed again and again and again. That's understatement: the velocity factors are 0.7x and 5x, last I recall.

You can read the balance of explanations off interest rates, you can read it off of valuation metrics, you can read it off of judgement calls about the quality of the marginal investment opportunity. You can't read it off the anus of a billionaire or the turd of self-serving think tank propaganda it pinched out, though, and that's where you are clearly looking for it.

Re: New York to tax luxury second homes in NYC

#126

Post by 8note »

phyzix5761 wrote: post #114
smallmancontrov wrote: post #108

Earlier quoted context omitted.

This post makes the mistake of assuming that everyone is on board with the "unrealized gains are totally different from income and should never ever be taxed a penny because that would be communism and implode the economy and kill kittens" hustle. It's a good hustle, because it takes precision to argue against and it's built around a kernel or two of truth, but these two kernels are firmly planted in a gigantic monum…

Would you rather they hoard the money under their mattress or invest it back into the economy? Like I explained, the reason unrealized gains are not taxed is because they generate more tax revenue than if the individuals pulled out the money, made a 1 time lump sum tax payment, and hoarded the rest. Its not tax avoidance at all. Its a way to multiply tax revenue as that capital is used through numerous transactions t…

id rather some portion go to taxes and also result in diluting the ownership and control over the biggest more important industries.

then have the government spend that tax money on services and infrastructure that also increase overall money circulating in the economy

Re: New York to tax luxury second homes in NYC

#127

Post by phyzix5761 »

9dev wrote: post #113
phyzix5761 wrote: post #103

Earlier quoted context omitted.

He pays income tax just like everyone else. But the majority of his money is in investments, which many Americans already do as well with 401k and personal brokerage accounts. The people who can't afford to invest like that already pay close to 0% income tax as 40%-60% of households, historically, have paid 0% income tax in the US.

They still pay payroll taxes, among others, which disproportionately affect poor people.

I 100% agree. Roosevelt implemented that in 1935 and it was meant as a safety net for social security. Economists estimate that by 2035 social security, as its currently structured, will no longer be able to fund the aging population.

Instead, a better alternative is to invest that same amount into an ETF that tracks the S&P 500 and after a 40 year working career the individual would have almost $5 million assuming a median wage and current employer matching on payroll tax. This would give them a yearly $200k payout which grows at 6% per year if they follow the 4% rule on withdrawals, lasting them indefinitely and leaving something behind for their children when they pass away. In contrast, social security right now, on average, pays $26k per year.

This would also generate federal taxes through transactions of the companies composing the S&P 500 which would give the government an additional tax revenue source.

Re: New York to tax luxury second homes in NYC

#128

Post by wat10000 »

Jblx2 wrote: post #82
sbarre wrote: post #53

Earlier quoted context omitted.

> I thought looking at the aggregates that the top 10% pay something like 1/3rd of all income/cap gain taxes. If we're bringing receipts, how about you start? Do you have the data for this initial statement of yours?

Here is one source (with 2022 data): https://taxfoundation.org/data/all/federal/latest-federal-in... - The top 1% of income earners pay 40.4% of the total U.S. Federal Income Tax receipts - Top 5% pays 61.0% - Top 10% pays 72.0% - Top 25% pays 87.2% - Top 50% pays 97.0% ...of course that doesn't include payroll taxes (Social Security).

Focusing on a single tax is silly. We should look at all taxes paid across all levels of government. Federal income tax is one of the most progressive taxes out there, so of course that's what people focus on when they want to make the point that wealthy people are being sacrificed to the altar of taxation.

If you look at all taxes, the share paid is remarkably close to the share earned. According to https://itep.org/who-pays-taxes-in-america-in-2024/, in 2024, the top 1% earned 20.1% of income while paying 23.9% of taxes. The bottom 20% paid 1.5% of taxes while earning 2.6% of income.

Re: New York to tax luxury second homes in NYC

#129

Post by giantg2 »

atmavatar wrote: post #117
giantg2 wrote: post #65

Earlier quoted context omitted.

It seems your article is saying the same sort of thing I already stated - "The share of taxes paid by the richest 1 percent (24 percent)", right? You are talking about effective taxes rates, which are different. To discuss that, I would have liked to see a bit more detail in the article, like what the income sources were and the deductions and losses to offset gains. I think changes around capital gains and loans aga…

> I think changes around capital gains and loans against equities could use some adjustments. At minimum, taking out a loan based on the current value of an asset should trigger immediate realization of capital gains/losses for at least those assets used as collateral. After all, the gains are already de facto being realized for the purpose of the loan. Unfortunately, I'm not quite sure how to address the other side…

The easy thing to do is set a limit for how much and how long you can borrow against, tax the loans as income, or outlaw loans against investment instruments entirely.

Re: New York to tax luxury second homes in NYC

#130

Post by [deleted] »

giantg2 wrote: post #32
jmclnx wrote: post #7

> an initiative to appease Mayor Zohran Mamdani and liberal voters Taxing the rich is not a Liberal thing, but the Rich is calling it that because they do not want to pay any taxes at all. He was elected because people are starting to feel real pain and seeing the ultra rich paying far less taxes then they are. If it was up to me, I would tax all the second homes above 5 million USD and add a Luxury Tax on all valuab…

"seeing the ultra rich paying far less taxes then they are." Is this actually true? I thought looking at the aggregates that the top 10% pay something like 1/3rd of all income/cap gain taxes.

[deleted]
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