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New York passes pied-a-terre tax

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Re: New York passes pied-a-terre tax

#221

Post by ceejayoz »

JackFr wrote: post #199
ceejayoz wrote: post #170

Earlier quoted context omitted.

I assure you, unloading property in NYC purchased below actual market value will not be a huge challenge.

You might be surprised how the gov't threatening to take your house every year affects prices. And the ability to get mortgages. And new construction.

> You might be surprised how the gov't threatening to take your house every year affects prices.

Which they won't do if it's assessed appropriately.

See California's Proposition 13 for the alternative.

Re: New York passes pied-a-terre tax

#222

Post by kcb »

VikingCoder wrote: post #106

> While the tax seems large, experts say the city’s antiquated assessment and valuation system dramatically undervalues properties, reducing the burden. City valuations can often be 10% or less of the true market value, they said. I heard about a system for this that struck me as brilliant. Make someone declare the value of their property. Then the government has the choice of taxing them at the scheduled rate, or bu…

So in the end, the government still needs a department that assesses properties to determine if the owner has undervalued it.

Re: New York passes pied-a-terre tax

#223

Post by eli »

postflopclarity wrote: post #162
burlesona wrote: post #22

Property tax is the workable wealth tax. There's no such thing as a perfect policy, but in the context of NYC this seems worth trying. I'll be interested to see if it helps create some liquidity in the housing market (the goal), or if it only functions as revenue source. One wrinkle I haven't heard much discussion of -- cities respond to incentives too. NYC is a global destination for the mega wealthy. If it turns ou…

> I'll be interested to see if it helps create some liquidity in the housing market lol. why would it? if you tax something, you get less of it. there is not even close to any kind of shortage of demand for housing in NYC. there is an enormous shortage of supply; it is in fact _illegal_ in most places to build more supply.

The tax is only on non-primary residences - one person owning multiple homes. I don't expect it to have a significant effect on housing supply, but I think it logically could.

Re: New York passes pied-a-terre tax

#224

Post by SoftTalker »

steveBK123 wrote: post #213
ceejayoz wrote: post #153

Earlier quoted context omitted.

> Earning… Inheritance is, notably, not earning it. > continue do productive work That's a pretty bald assertion. Useless nepo babies abound. > relying on public largesse Any chance the existence of a stable, well-educated, high-trust society benefits the children of wealthy people at all?

Yes.. spend enough time amongst the inheritocracy and you'll see the wealth is as often as not wasted on them. There's just too much fun to be had with 0.1% wealth that you didn't have to sacrifice your 20s, 30s (and maybe 40s) to build. Coast at some job with a top 25-50% income and 0.1% inheritance in NYC and live the life.

So if you're spending your inheritance living the high life, that economic activity benefits a lot of other people. Still a net positive in my view.

I get the political power concern, and money = power at a certain point. But I'd rather work on getting money out of politics than putting limits on what people can decide will happen to their assets after they die.

Re: New York passes pied-a-terre tax

#225

Post by waisbrot »

busterarm wrote: post #65
LauraMedia wrote: post #39

Earlier quoted context omitted.

This argument is used again and again and I wonder: Why do "people with money" stay where they are when there are countries, islands, even just states where there is less taxes to pay?

It's not the "people with money" leaving. There's equal evidence of people with money staying and people with money leaving. It's people who use their money to generate more value and employ lots of people that are, consistently, leaving. That means that thousands of jobs for the lower middle class are leaving and going to somewhere with a more favorable business environment. And that's not good (well, it's good for…

Are Seattle, the Rust Belt, and upstate NY examples of higher taxes driving wealthy job-creators out? I think they were the opposite: the market moved and then the wealthy people left to follow it.

NYC has always been extremely expensive, and people have largely decided that it's worth the price. I don't see how a little wobble in either direction changes that. Everyone could have already moved to Miami, or Salt Lake City, or even cheaper places if they were actually price-sensitive.

Re: New York passes pied-a-terre tax

#226

Post by pkulak »

burlesona wrote: post #22

Property tax is the workable wealth tax. There's no such thing as a perfect policy, but in the context of NYC this seems worth trying. I'll be interested to see if it helps create some liquidity in the housing market (the goal), or if it only functions as revenue source. One wrinkle I haven't heard much discussion of -- cities respond to incentives too. NYC is a global destination for the mega wealthy. If it turns ou…

Yup, very "Georgist", which I'm a huge fan of. You can move your money to another country, or hide it entirely in stocks that you borrow against until you die. But, you gotta live somewhere. Land is the only thing the state really has, and it's limited; it's the best thing to tax.

Re: New York passes pied-a-terre tax

#227

Post by jonathanlydall »

dirtikiti wrote: post #204
arw0n wrote: post #110

Earlier quoted context omitted.

The fairest and easiest to realize wealth tax is on inheritance. It is great to want to give your kids a headstart in the world, it is terrible for them and the people around them to set them up for life.

So you want to tax something that has already been taxed throughout the course of someone's life, just because they want to give it to their kids? The only tax that is fair to everyone is a sales tax.

I live in South Africa where we have 15% VAT.

When I was little and playing SimCity 2000 I looked at the tax rates for the city and noticed that the sales tax rate was like 2%, and based on our 14% VAT at the time, it seemed super low to me so I upped it to 12% and was surprised at how unhappy the citizens were.

This gave me the impression that Americans wouldn’t be happy with a significant sales tax, or perhaps this was a city sales tax on an existing state sales tax, which yes, would be outrageous, or maybe Americans get taxed in some other way which makes up for our VAT.

Anyway, I look back and chuckle at my own lack of knowledge at the time.

Re: New York passes pied-a-terre tax

#228

Post by onlyrealcuzzo »

waisbrot wrote: post #212
idontwantthis wrote: post #143

Earlier quoted context omitted.

You are confusing owning a house with having paid off a mortgage. I can go get a mortgage for $1 million tomorrow, but that does not make me a millionaire. It makes me an debtor with a house I can't afford.

Most Americans cannot get a mortgage for $1M.

Ummmm.... It depends where you live.

You can put 3.5% down for a $1m house in places where ~50% of the population lives.

At current interest rates, no, you can't qualify, but at interest rates where people bought most of these houses... Yes, the median person could afford it (in those areas).

Re: New York passes pied-a-terre tax

#229

Post by eli »

nonethewiser wrote: post #196
strongpigeon wrote: post #104

Earlier quoted context omitted.

It's a luxury tax that only affects people wealthy enough to have a second home in NYC. These people, by virtue of not living there, aren't paying income tax and thus don't contribute as much as someone who is.

>t's a luxury tax that only affects people wealthy enough to have a second home in NYC. Not exclusively though, right? Since they are revising the valuation system to not artificially depress valuations, isnt this a global tax increase? No rate changes or extra tax for someone with a primary residence but the base is increasing, right? >While the tax seems large, experts say the city’s antiquated assessment and valua…

Those are two different things: the new tax, and fixing the broken appraisal process.

Re: New York passes pied-a-terre tax

#230

Post by OkayPhysicist »

gruez wrote: post #167
SoftTalker wrote: post #135

Earlier quoted context omitted.

I would disagree, I think income taxes and inheritance taxes are morally wrong. Earning money to support oneself and family instead of relying on public largesse should not be taxed. Passing the fruits of a lifetime of work to ones heirs so they can continue do productive work instead of relying on public largesse should not be taxed.

>I would disagree, I think income taxes and inheritance taxes are morally wrong. So what taxes aren't "morally wrong"?

Their take on inheritance taxes is insane, but I tend to agree that income taxes are immoral. Corporations get taxed on profits: If OkayPhysicist, Inc. spends $200 to make $300, it would be taxed some fraction of $100. Individuals, on the other hand, get taxed on revenue. It doesn't matter if it costs me $4000 in rent, groceries, transportation, etc., to make $6000, I'm getting taxed on that full $6000.

Capital gains taxes, on the other hand, are completely moral, and should be much, much higher. Capital investment benefits enormously from the State protecting their property "rights" (you don't need to hire a private army to prevent the workers from just deciding to run your factory for their own benefit, that's what the cops are for), and at a minimum the state would be justified in collecting that dividend for itself. Bootlickers and profession bootlickers (i.e., economists) would complain that a high capital gains tax disincentives investment, but as long as the value of investment is positive, that is, outpacing inflation, it makes zero sense to let your money languish in a Scrooge McDuck pile rather than get some value out of it.

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