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New York passes pied-a-terre tax

cnbc.com

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Re: New York passes pied-a-terre tax

#321

Post by newaccountman2 »

happytoexplain wrote: post #300
newaccountman2 wrote: post #253

Earlier quoted context omitted.

You quoted the part that clarifies this: "worth living in" Subjective, obviously. My view is that I wouldn't live almost anywhere outside of one of the major coastal cities in a blue state. Certainly nowhere in "flyover country".

Even disregarding the fact that your description here still doesn't meet the $1M bar you set in the original comment, you are using the general term "worth living in" to describe places you would live, which is way more elitist than is typical of HN. I too would only live in a small subset of the country (a different, but not opposite, subset from you). But I would never do something as petty/hostile as describe thos…

Zero sympathy. The people who live in those places routinely complain about unfairness to them, while then voting based on bigotry and ignorance, jubilating in ICE's cruelty, etc. They have done worse than simply issued harsh words, and they deserve worse in recompense.

> you are using the general term "worth living in" to describe places you would live,

In general, anyone who uses the phrase is going to mean it subjectively.

But--there is a somewhat objective measure: property prices :)

And they are all higher in blue state coastal cities than in buttfuck Trump-loving nowhere.

Re: New York passes pied-a-terre tax

#322

Post by Galanwe »

ExoticPearTree wrote: post #269
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.

> It is great to want to give your kids a head start in the world, it is terrible for them and the people around them to set them up for life. How is it terrible for my kids to not have to break their back like I did to build the wealth I'm looking to pass on to them after I die? Why should they go through the same struggles that I did? It is up to them to squander it or transform it into even more wealth to pass it…

Inheritance tax in practice is implemented above a certain threshold.

There is nothing wrong with striving to give a heads up in life to your kids, on the contrary, it's a core, visceral instinct of parents to do so, and removing that would be alienating.

There is a certain level of wealth though, where the "heads up" transforms to an unstoppable compounding lever.

France for instance has a progressive inheritance tax (starting at 5%, up to 45%), triggered for children inheriting at 100k€ per parent. In practice, 50% of the population inherits Also, the proposed Zucman tax in France for instance is triggered starting at 100M€ wealth. At these levels, a mere 2% risk free investment yields 2M€ annual income, this is enough to both compound and enjoy a very luxurious lifestyle. This level of wealth is unstoppably compounding, and that is why it is proposed to tax it.

If you don't, well you end up with a US situation, where disproportionate wealth (and thus power, influence) end up in the hands of random citizens with their own agendas, possibly (likely) orthogonal to the interests of the majority.

Re: New York passes pied-a-terre tax

#323

Post by hungryhobbit »

hungryhobbit wrote: post #295
kjshsh123 wrote: post #266

Earlier quoted context omitted.

It's really not the easiest. You have to prevent gifting things at a lower tax rate while alive. That means it comes bundled with income tax or gift tax implications. Fairest? I mean, land value tax is fair. So are Pigouvian taxes. In fact they're arguable more than fair. Not having these taxes is arguably unfair. Who deserves ownership of natural resources or to inflict negative externalities on others? Taking thing…

I think to everyone but a nepo baby it's clear that the children of the rich don't deserve their wealth.

Wow, someone downvoted me? The definition of the word "deserve" is:

> To deserve means to be worthy of, entitled to, or to have a valid claim to a reward, punishment, or treatment based on your actions, qualities, or circumstances

So you genuinely believe that nepo babies, despite not taking actions or creating any circumstances to earn their wealth .... nevertheless deserve to have it anyway?

Re: New York passes pied-a-terre tax

#324

Post by apparent »

carlosjobim wrote: post #294
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…

Who benefits most of a city being improved by tax dollar spending? Property owners. They benefit in the range of hundreds of thousands of dollars to millions of dollars each. Thus it makes sense they contribute the most tax dollars. Or show me a worker who benefits the same amount of money from the city being improved.

It depends on how the $ is spent. If it's spent on "free preschool" then it benefits parents who use the free preschool. These are by definition not the people paying this non-resident-only tax.

Re: New York passes pied-a-terre tax

#325

Post by apparent »

gorgoiler wrote: post #307
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…

What if the city lets you declare your chosen value without being able to force you to sell, but if you ever sell at a higher value then you owe back-taxes on the difference? And if the difference is more than X% then it’s fraud unless you can persuade a judge otherwise. The loophole might be that Billionscorp LLC is listed as the property owner, and Jeff Billions technically only rents the penthouse from his own com…

You'd just end up arguing about when the property appreciated. The owner would say it all happened since the last tax payment was due.

It would also complicate the home buying negotiation. People would look at your recent tax payments and put a cap on the bids they would make based on what would trigger back taxes for you.

Re: New York passes pied-a-terre tax

#326

Post by hydrogen7800 »

BigTTYGothGF wrote: post #270
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…

> Make someone declare the value of their property. Then the government has the choice of taxing them at the scheduled rate, or buying the property from them, for that cost. Isn't that what got Guatemala invaded back in the 1950s?

I had a similar memory of hearing this scheme in the context of a Latin American country. Industries were nationalized, and foreign corporate owners were compensated based on the tax assessed value of their businesses.

Re: New York passes pied-a-terre tax

#327

Post by eli »

postflopclarity wrote: post #310
eli wrote: post #223

Earlier quoted context omitted.

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.

I also don't expect it to have a significant effect. but any effect it does have will be in the direction of less supply.

How does a tax on SECOND homes decrease supply? Wouldn't it incentivize sales of mostly vacant properties to someone looking for buy a first home?

Re: New York passes pied-a-terre tax

#328

Post by ethbr1 »

apparent wrote: post #285
jamiequint wrote: post #111

Earlier quoted context omitted.

"If you make the tax too high it starts discouraging the behavior you're taxing, which can paradoxically reduce overall tax revenue." I am generally against more taxes, but the structure of this one is quite good in terms of the incentives. If wealthy people who only live in the city part-time stay in hotels instead of buying second homes, the net effect should be to increase the cost of hotel rooms and reduce the co…

> increase the cost of hotel rooms and reduce the cost of owned-housing Reducing the cost of $5M+ homes will slightly help some wealthy people who live in NYC, and there will be a modest trickle-down effect into less expensive properties. But I thought the goal was to generate tax revenue from the taxes, which wouldn't happen to the extent they end up in the hands of NYC residents. EDIT: apparently it hits all homes…

* Not to forget that most $5M NYC homes could also be a larger number of less valuable homes

So this is also a developer / market incentive, if it actually changes demand.

Re: New York passes pied-a-terre tax

#329

Post by busterarm »

waisbrot wrote: post #225
busterarm wrote: post #65

Earlier quoted context omitted.

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…

In recent years many large businesses have moved out of Seattle entirely. Some just outside of the city limits to Bellevue and some out of the state completely.

Also I'm someone who did move from NY to Miami during COVID along with maybe 1/3 of my peers (work and social). Not all to Miami but mostly to either the southeast, texas or non-LA socal.

Re: New York passes pied-a-terre tax

#330

Post by eli »

nonethewiser wrote: post #234
eli wrote: post #229

Earlier quoted context omitted.

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

Its part of the same law. Regardless, the appraisal changes are global, right? That is, it would apply to a $200M 17th home and a $750k residence alike, right?

No, there is no global change that I'm aware of.
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