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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

#61

Post by AdrianB1 »

nickv wrote: post #30
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"?

Because wealth is also distributed in a very lumpy way across the city. 154 residents of NYC own 33% of the entire wealth of the city... notice I didn't say 1%, I said top 154. They are not contributing 33% of the tax income to the city. So yes, the ultra rich pay "less taxes" if you look at how much of the resident wealth they control. Also, property taxes are significantly lower than appraised value and the richer…

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 more than illogical, it is just envy without limits.

Re: New York to tax luxury second homes in NYC

#62

Post by citadel_melon »

tlogan wrote: post #16

I assume this will be challenged in court immediately. Does anyone understand whether it is likely to survive those legal challenges? EDIT: Here is a list reported by Google search but I really do not understand or know how reasonable these challenges are. Equal Protection: Owners may argue the tax unfairly treats similar properties differently based on second-home status, value threshold, or owner residence. This is…

Property taxes already exist. There is no obvious reason why this particular property tax would be legally problematic.

The tax is also likely politically difficult to counter. Consider how limited in scope these taxes are, how the tax revenue benefits residents who live in NYC through providing more revenue for services without taxing residents at all, and how the only constituent the taxes negatively affects are non-residents (aka it’s non-trivial to argue that these people should even be considered constituents) who benefit from the services the city offers through stable apartment prices that nicely store their wealth yet provide little value in return.

The only rebuttal one could conceive is the value these high-net-worth individuals altruistically provide the city through developing office space and giving jobs to the city is not worth risking, but that is like saying the tail wags the dog. The reason these CEOs go to NYC is because that is where the talent and economic clustering is: if these high-net-worth individuals could get the talent they need to run their firms in Miami and Austin, they would have done so already. They have tried and they have failed up until this point.

Regardless, a claim into the future in such a complex system such as the markets and the judicial system (especially a common law system) always relies on induction which is never going to be deterministic. However, this tax is just another property tax meaning it likely will stand in court. Additionally, given that the opposition has very weak rebuttals against a well-versed counterparty implies the legislature or other political machinery won’t have a strong enough incentive to fight this tax.

Re: New York to tax luxury second homes in NYC

#64

Post by WarmWash »

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%.

Bezos pays 40% too.

His assets are not income. Just like your assets are not taxed.

Ok, but he does that loan-against-assets hack!

Well the fact is that those loans eventually need to be paid, so at some point he will pay that 40% (unless he does the step-up basis hack when he dies)

Ok, but he should be paying annually like everyone else!

Well, technically he is, his assets, the company Amazon, pays a lot of taxes annually. The government views Amazon as a money printer, states get their sales taxes, and the federal government gets their income taxes. All of which originate with Amazon.

All of which is to say, that the uppe-middle/upper-class, the successful surgeon, is the one that needs to be paying more taxes to equilibriate society.

Re: New York to tax luxury second homes in NYC

#65

Post by giantg2 »

dwa3592 wrote: post #50
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.

Last year year Jeff bezos and I both paid taxes for the year of 2024. The percentage he paid on the money he made is far less than I did. I gave higher share of my income to the government than he did. Bezos's true tax rate was less than 1% and mine was around 25%. Link - https://itep.org/washington-post-rich-not-paying-fair-share/

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 against equities could use some adjustments. The other taxes like payroll are basically moot as Bezos's payroll income is only about $90k per year anyways.

Re: New York to tax luxury second homes in NYC

#67

Post by giantg2 »

sbarre wrote: post #53
giantg2 wrote: post #49

Earlier quoted context omitted.

Do you have the data for that? I was wondering about tax paid (as dollars not effective rate- I know effective tends to me lower for HNW individuals due to accountants and other financial professionals they can afford).

> 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?

This is close enough (posted here by another).

https://news.ycombinator.com/item?id=48185123

Re: New York to tax luxury second homes in NYC

#68

Post by mbreese »

busterarm wrote: post #5

I strongly doubt that this is going to have the effect that they want it to. It won't raise the taxes that they expect it to. It won't free up inventory. It will halt construction.

I'm not sure it's that clear, and the taxes might not be the point. If this halts construction of second homes in the higher price ranges, then those construction crews will still need to do something. So, that might make it possible to find construction capacity for higher-density construction that otherwise wasn't available. Whether or not such a trickle-down effect will happen isn't guaranteed, but it's possible. It's also possible that no construction happens and we see a loss of jobs in the process.

It's a complex market and this is definitely a risk.

Re: New York to tax luxury second homes in NYC

#69

Post by WarmWash »

dwa3592 wrote: post #50
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.

Last year year Jeff bezos and I both paid taxes for the year of 2024. The percentage he paid on the money he made is far less than I did. I gave higher share of my income to the government than he did. Bezos's true tax rate was less than 1% and mine was around 25%. Link - https://itep.org/washington-post-rich-not-paying-fair-share/

>(including unrealized gains)

They wrote that whole article out just to make it all meaningless with 3 words in parenthesis.

"The plane crashed and everyone lived! (not including those who died)"

Re: New York to tax luxury second homes in NYC

#70

Post by lovich »

JuniperMesos wrote: post #15
galleywest200 wrote: post #11

Earlier quoted context omitted.

Taxing second homes would halt construction? Plenty of people out there wish to own a first home, myself included.

How will that tax result in more houses existing?

How will this tax result in less houses available for people with no primary home existing?

It’s a tax on second homes. If a single person sells due to the tax and someone who had 0 homes previously, it’s spread the scarce housing stock.

Not to say we shouldn’t build more but acting like a tax on multiple homes is going to make houses less available to everyone is ludicrous.

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