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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

#151

Post by cyberax »

javanissen wrote: post #102
cyberax wrote: post #55

Earlier quoted context omitted.

LOL. Why not just build bunkhouses and then rent out bunk beds there? For a cool $5000 a month. Because that's the end goal, isn't it? Manhattan is _already_ one of the densest cities in the world. It needs a good _downzoning_ to be liveable again.

> bunk beds… $5000/month The market prices full one-bedrooms at less than this in most of Manhattan. Flophouse beds would cost a fraction of this and they would get cheaper the more of them you have. They’d also slow the growth of rent price in NYC. Let’s take your example at face value. Suppose Manhattan added one million beds to its existing ~3.8M bedroom housing stock via the “missing middle” housing that you desc…

> The flophouses and dorms and SROs were a key part of the housing market that kept Manhattan more affordable and therefore livable in the 20th century, when density was up to 40% greater than it is now.

???? Can you provide the citation for higher density in the early 20th century?

> I live here. The thing making Manhattan unlivable is that a one-bedroom is $4500 in the east village due to not enough supply.

And there is never going to be enough supply. Your only choice is to Detroitify your city.

"Just build more" in Manhattan is beyond ridiculous. It's literally the definition of madness: "The definition of insanity is doing the same thing over and over again and expecting a different result".

Re: New York to tax luxury second homes in NYC

#152

Post by twoodfin »

kube-system wrote: post #147
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.

> He pays income tax just like everyone else. He only paid income taxes on $80k while at Amazon. The wealthy often make their money as capital gains, which if they held for at least one year, are exempt from the income tax and taxed at no higher than 20% Billionaires literally have their own set of tax brackets in this country: https://www.irs.gov/taxtopics/tc409

The wealthy in NYC pay the top Federal 23.8% LTCG rate, + the top New York State income tax rate (10.9%) + the NYC income tax rate (3.876%) on their long-term capital gains.

Re: New York to tax luxury second homes in NYC

#153

Post by phyzix5761 »

dwa3592 wrote: post #145
phyzix5761 wrote: post #139

Earlier quoted context omitted.

The interest rate charged generates taxes, the purchases they make with the credit they borrow generate taxes, and the money they leave in their investments generate taxes through capital usage like paying employees, paying vendors, building facilities, etc. The government taxes every little thing so don't think that money is not generating taxes at all. It actually generates more federal and state taxes by staying i…

Good attempt at manipulation. Why don't you link some studies here which say it will be better to leave the tax system as is than taxing the unrealized gains somehow.

The numbers are self evident. If you've ever owned a business you know that you have:

1. Corporate income tax 2. Employee Federal income tax 3. FICA Payroll Tax 4. Sales Tax on transactions 5. Property Taxes

Now multiply that by each node on the graph. Each employee, vendor, business that comes in contact with your company spends the money you paid them and is taxed on it as well. It grows exponentially after just a couple of nodes. If each of those nodes is trying to make a profit from their own capital it generates even more tax revenue for the government.

Contrast that with capital gains tax which is a 1 time event at a maximum of 20%. That 20% needs to be taken out of the business in order to pay the taxes if you're going to tax unrealized gains. That means that 20% only gets taxed once instead of going through the graph and getting taxed exponentially many more times as it grows.

Re: New York to tax luxury second homes in NYC

#154

Post by smallmancontrov »

phyzix5761 wrote: post #139
dwa3592 wrote: post #118

Earlier quoted context omitted.

>>This post makes the mistake of counting unrealized gains as income. That's not how taxes or investments work. Unrealized gains are NOT income. Rich people always borrow money on the stocks they own. In effect, those unrealized gains help them borrow money which they spend like income. I will spend part of my paycheck to buy a cup of coffee and they will spend part of the loaned money to buy the same cup of coffee.…

The interest rate charged generates taxes, the purchases they make with the credit they borrow generate taxes, and the money they leave in their investments generate taxes through capital usage like paying employees, paying vendors, building facilities, etc. The government taxes every little thing so don't think that money is not generating taxes at all. It actually generates more federal and state taxes by staying i…

The government taxes every little thing that a poor person does, like earn and consume. The government hardly taxes anything that a rich person does, like rest and invest and watch the green number in the brokerage account go up.

Monetary velocity is notoriously high among the poor and low among the wealthy. If you have a dollar and want to generate maximum economic activity or maximum taxes, the answer is unambiguous that you should give it to the poor person.

Re: New York to tax luxury second homes in NYC

#155

Post by kube-system »

bryanlarsen wrote: post #39
giantg2 wrote: post #32

Earlier quoted context omitted.

"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.

Top 10% is the upper middle class, not the ultra rich. A successful surgeon making $1M per year is paying well over 40% a year in taxes, while Bezos is paying 1%.

The top 10% is not even upper middle class in high COL areas.

$155k is a top 10% income.

Re: New York to tax luxury second homes in NYC

#156

Post by verteu »

One way to avoid the tax is to rent out the residence: https://comptroller.nyc.gov/reports/the-pied-a-terre-tax-and...

It's interesting that people choose to leave their properties vacant - They're effectively "taxing" themselves by foregoing rent (4+%/yr cap rate).

Is vacant real estate even a good investment?

Re: New York to tax luxury second homes in NYC

#157

Post by wat10000 »

giantg2 wrote: post #133
wat10000 wrote: post #128

Earlier quoted context omitted.

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…

This seems to show the same gradation but with less magnitude. Was there some other point you were making?

It’s way less, is the point. Top earners pay just a little more than their share of income. The tax system as a whole is nearly flat.

Re: New York to tax luxury second homes in NYC

#158

Post by kube-system »

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).

And for reference, here's what kind of incomes those percentiles are:

Top 50%: $53k/year

Top 25%: $93k/year

Top 10%: $155k/year

Top 5%: $210k/year

Top 1%: $450k/year

Re: New York to tax luxury second homes in NYC

#159

Post by smallmancontrov »

dwa3592 wrote: post #149
eudamoniac wrote: post #140

Earlier quoted context omitted.

What is the loophole? That banks are allowed to give out loans to trusted clients? Are you proposing that banks can no longer loan to rich people or what? Why does the source of the collateral being a stock matter? A normal person gets a loan based on his home value, assets, other factors, all of which might appreciate faster than the interest rate. When does it become a loophole? You really don't want loans to be ta…

Let me simplify it like i would for a 5 year old. The loophole is that they never pay taxes on the unrealized gains bc they lived on the borrowed money their whole life. They will never sell their stocks, so there will be no taxable event. When they die they will leave their wealth to the children which effectively erases the unrealized gains. So no one pays taxes on that huge chunk of money. Google "buy,borrow,die".

Yes, but that's only the long term part of the plan. The short term part of the plan is that the marginal propensity to consume drops with income. Poor people earn and spend all their money, both of which are heavily taxed, while rich people "earn" capital gains and invest all their money, neither of which are taxed.

Here's how investment isn't taxed: take out a loan collateralized against the assets with unrealized gains. If the investment works, it can service its own interest, which is deductible. If it doesn't, the capital loss offsets the capital gain made by selling the collateral. Both cases result in approximately zero tax.

This is nuts.

Re: New York to tax luxury second homes in NYC

#160

Post by kube-system »

twoodfin wrote: post #152
kube-system wrote: post #147

Earlier quoted context omitted.

> He pays income tax just like everyone else. He only paid income taxes on $80k while at Amazon. The wealthy often make their money as capital gains, which if they held for at least one year, are exempt from the income tax and taxed at no higher than 20% Billionaires literally have their own set of tax brackets in this country: https://www.irs.gov/taxtopics/tc409

The wealthy in NYC pay the top Federal 23.8% LTCG rate, + the top New York State income tax rate (10.9%) + the NYC income tax rate (3.876%) on their long-term capital gains.

Not if their second home in NYC is not their primary residence .... and like bezos, has a primary residence in a state where that isn't the case
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