The most disingenuous and sickening type of status quo defender is the person who blames the recent expansion in wealth inequality on a “lack of skilled workers.” Such a person is either a liar or an imbecile. There’s not much wiggle room there. Either this person doesn’t know that the Federal Reserve’s quantitative easing (QE) lifts asset prices while doing very little for the economy, or he or she is choosing to ignore it. Either this person doesn’t understand that the poor and lower middle class don’t own much in the way of stocks or bonds, or he or she is choosing to ignore it.
Since QE has been far and away the most important variable impacting the economy and markets since the crisis, ignoring its impact on wealth inequality is simply unforgivable. Yet, it’s more than that. Much more. Many of the polices existing in these United States not only encourage foreign oligarch money laundering into luxury skyscrapers that remain empty, but our society seems to go out of its way to ensure they have to pay as little in property tax as possible. Indeed, tax polices don’t benefit the rich, they benefit the super rich.
Nowhere is this more apparent that in the oligarch capital of America, New York City. A recent article in the New York Post made this perfectly clear:
New York City’s method of assessing property values is so out of whack that the buyer of the most expensive apartment ever sold — a $100 million duplex overlooking Central Park — pays taxes as if the place were worth just $6.5 million.
With controversial tax breaks granted to the One57 condo tower, the total property tax bill for the spectacular penthouse is just $17,268, an effective rate of 0.017 percent of its sale price.
By contrast, the owner of a nearby condo at 224 E. 52nd St. that recently sold for $1.02 million is paying an effective rate of 2.38 percent, or $24,279, according to data compiled for The Post by the Revaluate.com real-estate information website.
Basically, everyone gets squeezed in favor of the super rich, i.e., feudalism.
The figures, which Revaluate CEO Max Galka called “unbelievable,” show that the owners of the city’s 10 most expensive apartments pay effective rates that are a mere fraction of those paid on less-pricey properties.
Beneficiaries of the discrepancy include casino magnate Steve Wynn, entertainment mogul David Geffen and Ekaterina Rybolovleva, the socialite daughter of Russian oligarch Dmitry Rybolovlev.
Galka said that while the city values apartments at about 20 percent of their actual worth, the top 10 are valued at between just 3 and 6.8 percent of their sales prices, generating just $935,000 in taxes this fiscal year.
If those apartments were taxed at the national effective rate of 1.29 percent of sale prices, the city would pocket nearly $9 million, Galka said.
In a prepared statement, de Blasio spokesman Wiley Norvell said: “These inequities have been built into the tax system over decades, and they won’t be solved easily or quickly.”
“Any solution would require tax-law changes in Albany, and the impact of those changes on the lives of New Yorkers would have to be taken into account,” Norvell added.
In other words, not only will this not change anytime soon, but it’s apparently not even on the table. So “liberal” of you Mayor de Blasio. Just another fraud politician.
For related articles, see:
A Warning to New York City – How Singapore’s Luxury Boom in Sentosa Cove Went Bust
Teachers’ Retirement Funds are Piling into Manhattan Real Estate at Record High Prices
Meet the Pied-à-Terre Levy – The Proposed Tax that Could Crush High End NYC Real Estate
In Liberty,
Michael Krieger
Disgusting. Gee, how long does it take to use a calculator?
Disgusting.Gee .how long does it take to use a calculator?
Even when the property tax is not rigged to favor the wealthy, it is one of the most unfair, oppressive, and regressive (meaning it hits the poor much harder than the better off) taxes there is. It means that you never really own your property, but must pay ever-escalating rent to the municipality for the privilege of continuing to own what you bought and paid for. It means that the major motivation for buying a home, housing security, especially in old age- is meaningless.
However, the tax is rigged in favor of the wealthy, almost everywhere, to the point where it looks like a massive land grab designed to force the poor working homeowners of the city out of their hard-won little cottages, so their property can be purchased for distress prices and “land-banked” by the local property oligarchs. Why else would a decrepitating little 800 sq ft cottage on Chicago’s 95th St, a quiet, crime-free little pocket of low wage black homeowners (and one of the friendliest neighborhoods I’ve ever been in) be taxed $4,000 a year for a property worth perhaps $40K on the best day of the next decade, while $1M condos in uber-rich Streeterville pay barely $6000- far less than 1%? On a hunch, after talking to one of thes homeowners, I did a search of the tax records for a random selection of south side houses, none of which was worth over $75,000, and was horrified- every single one paid at least $4000 yearly and in some cases, the bill was $7000!
It’s even worse for commercial properties, and any apt building with more than 12 units is taxed as a commercial building. I ran a few of those, too. Friend of mine owns a trio of common wall storefronts that command $2000 to $3000 a month rent, tenant pays utilities. His property taxes for the 3-unit building are $40,000 a year. When I rented a 4 room apt , the portion of my rent that went to pay the landlord’s property taxes, was nearly twice what I pay in my condo, which is 5 rooms and a much nicer place.
Chicago – Why should ANY citizen be forced to pay more more the same services than others pay? That is bullshit.
Regressive taxes my ass. I suppose the price of bread should vary based on a person’s wealth, too.
Progressive taxes are no more than a transfer of wealth to support the FSA. Regressive is just the word that is used when there is no transfer of wealth to the FSA.
The above is not fair, but charging different prices for the same services based on wealth is not fair, either.
The idea that the “poor” should be subsidized for everything is bullshit.
Taxes in general need to be cut by 80%. The FSA needs to go, along with the bulk of all other govt. expenditure.
LLPOH
What hapens when the rich own everything?
Greed and envy are related.