Guest Post by Simon Black
Last month, Chicago hedge fund billionaire Ken Griffin spent $238 million on a condo in New York City.
It was the most expensive home ever sold in the US (but only one piece of Griffin’s massive, luxury real estate portfolio).
Good for Ken… he’s incredibly wealthy and can spend his money however he wants. But most of society hates this kind of behavior.
Even if a guy has earned $10 billion through hard work and ingenuity, they don’t believe he can spend it freely… and those feelings have only been growing recently with the widening wealth gap and the rising, leftist presidential contenders.
And New York City is gunning for Griffin…
He’ll no doubt pay millions of dollars a year in real estate taxes and employ a team of people just to manage that property… and his investment firm, Citadel, has an office in NYC employing hundreds of people.
But NYC wants more, specifically for Griffin to pay more tax to fund the city’s affordable housing program.
Griffin’s purchase was the perfect backdrop for the government to bring up the “pied-a-terre tax”… the proposed tax would be up to 4% per year for people who own properties above $5 million in NYC but don’t permanently reside there.
So Griffin would be out an extra $9 million a year (on top of the 1% mansion tax New Yorkers already pay on home purchases above $1 million – mind you, $1 million in New York gets you a few hundred square feet)… and normal real estate taxes.
It’s an all-out war on the rich in New York… because the city (and state) are broke.
The city is expecting a $1 billion shortfall this year.
Never mind that NYC is already one of the most expensive and highest-taxed cities in the country (and 50% of the city’s taxes are currently paid by 1% of the population)…
Mayor Bill “brothers and sisters” de Blasio wants the rich to pay even more.
Never mind they just initiated a $2.50 “congestion tax” on taxis, so it costs over $6 just to get in a taxi… and some politician running for local office wants to double the just-increased minimum wage to $30/hour… the answer from the government’s perspective is always MORE.
Only one problem with trying to squeeze every last drop out of the wealthy…
If things get bad enough, guys like Griffin will leave.
New York Governor Andrew Cuomo (who faces a $2.3 billion shortfall in his state budget) recently alluded to this in a press conference…
“There is a tipping point where people say, ‘I love New York, but to spend another $300,000 in taxes? I’ll move.’”
But the rich are already flocking in droves… since 2007, New York and California lost 2.2 million residents to lower-tax states. And the pace is accelerating (one economic group expects them to lose another 800,000 residents in the next three years).
Hey, at least NYC is still the financial capital of the US… and businesses will always flock there for its top talent and global appeal…
Not so fast… the hatred toward the rich has grown so extreme that New York is telling big business to go somewhere else.
You probably remember Amazon’s nationwide search for “HQ2”… the company started a national bidding process where cities could offer incentives in return for Amazon bringing tens of thousands of high-paying jobs and everything else that goes along with building a massive headquarters.
Amazon settled on New York and Virginia. Now New York wants to change the deal…
NYC politicians, including our favorite, AOC, are telling Amazon to take a hike. They don’t want the retailer to come in to the city and push up real estate prices (Amazon also said it won’t support unions). Nevermind that the majority of New Yorkers are for it.
And Amazon is seriously considering leaving. That would cost the already-broke city an estimated $27.5 billion in tax revenues over the next 25 years.
But math doesn’t come into the equation. It’s silly, ideological grandstanding that is now commonplace with the rising socialists.
And it’s more harmful than just Amazon potentially leaving… it doesn’t send a good message for future companies considering New York as a place to do business.
So New York City needs money to plug its budget shortfall. But it’s actively chasing out the rich people that will happily pay their absurd taxes.
This is insanity.
Next door in New Jersey (which has lost two million residents between 2005-2014), the situation isn’t any better.
They’re so desperate, they want to tax RAINFALL.
If you own a building with a large, paved surface (like a driveway or parking lot), the state wants to tax you because your property is responsible for storm water runoff.
Logic doesn’t fit into the equation anymore. It’s simply desperate, broke governments clawing for pennies and angry idealists who want to eat the rich.
And this trend is only going to get worse. You can expect more socialist rhetoric, more proposals to creatively tax the evil rich and more outright damnation of success over the next two years (and potentially longer depending on who takes the presidency).
The smart people have already started voting with their feet, moving to lower-tax states.
I did the same when I moved to Puerto Rico. I don’t think there’s anywhere better for a productive person who wants to enjoy the fruits of their labor (with Act 20 and Act 22, you can legally reduce your corporate taxes to 4%, and your capital gains and dividend taxes to 0%).
All while living on the beach.
Remember, Puerto Rico had to hit rock bottom before implementing these incentives. I’d guess New York won’t be far behind… but I doubt they’ll make things friendlier for productive people.
I don’t want to have to learn Puerto Rican.
You can move to Miami and practice.
You’d think that no one ever read Atlas Shrugged.
This line is oddly penned-
“And Amazon is seriously considering leaving. That would cost the already-broke city an estimated $27.5 billion in tax revenues over the next 25 years.”
It makes it sound like they were already there. You can’t leave a place you have moved to yet, can you? And how is it going to cost NYC 27.5 billion? You mean they won’t realize the estimated tax revenues if Amazon moves in? That’s a totally different thing.
Eggs, chickens, counting, and all that jazz.
Farmer,they do have a presence in nyc,was just going to be much larger.
I would guess after the fallout it might soon be a zero presence though.
I am unsure why you are getting so many neg votes,must be some deblasio/cumo/cortez traitors lurking here this a.m.!
NYC real-estate speculator assholes are suffering from SUNK [real] COSTS and NYC political whores are suffering from SUNK [emotional] COSTS.
Boo fucking hoo.
https://www.investopedia.com/terms/s/sunkcost.asp
I’ve traveled to PR on business and vacation. Beautiful island, visited the only rain forest in the US.
The land of the have’s and have not’s – just like NYC
I’ve been to the Hoh rainforest in WA. Perhaps you meant tropical rainforest?
Toured Bacardi distillery in San Juan. In one large room they have wooden casks the size of pony kegs stacked on racks-one for each member of the extended family (lots of Batista names from Cuban roots)-about 600 casks, each with a drain cock. Family can come in any time-day or night-and fill their jug from their personal cask. Attendant goes around daily to refill with whatever flavor/type the person specifies. One wall is completely covered with a diagram of the family tree. Some family have not been there for years, yet their cask is always kept full in case they do wander in-others come in daily for a refill.
Most of the rum goes by tanker to bottling plant in Jacksonville, Fl. and then packaged product goes back to SJ for eventual shipment worldwide.
When Castro overthrew Batista in 1958 a lot of the operations were seized but some had already moved from Cuba to PR since the family was aware of the political unrest. .
The Bacardi Bat logo is from famous bats that inhabit caves in Spain-supposed to be a good luck symbol-the wife of the original founder selected the bat as their logo-it took many years for the founders to elevate rum from a cheap rot gut drink to what it is today and the bat logo became a symbol of quality.
Some have it tough.
No self respecting Rican drinks Bacardi. Don Q is the rum of choice.
“self respecting Rican”
Oxymoron?
Let corporations, the wealthy elite and government eat each other. Lovin it.
It’s funny to hear Simon call a hedge funder a productive person
Star- I laughed out loud at that comment from Simon!! A guy who earned(?) 10 BILLION running a hedge fund is IN THE CLUB and I doubt he worked all that hard. This stuff is becoming more insulting to the readers by the day.
Jump, fuckers!
BALZ- Capital idea!! That saves on rope and energy units used.
If I were rich I would tell all those communist son of a bitches to take a hike . Tell my money out and never look back. I don’t necessarily like the behavior of the very wealthy especially the one world government Luciferian types but I hate communist even more. This is what you get on both sides when Christianity is displaced with all kinds of worthless ideologies and you bring in millions of Third world bottom feeders . We are truly fucked as a nation either way. I just hope ,think and pray more white people are finally waking from their slumber to realize what is happening and what is in store for them if we become the minority in our country. It may already to late but maybe some will have the will to break away .Succession and the start of a new white only nation seems to be our only hope . Just getting apart from the damn parasites negros would be a good start .We are heading for some major confict here at home and abroad and we will not be able to ” duck ” or get out of the way. Not sure how to prepare at this point except more guns,ammo , water and food storage with much prayer. Getting our spiritual house in order seems to be the best and then all the other stuff.
“There is no (sic) Communist movement that has not operated in the interests of money, and for the time being permitted, and that without the idealists among it’s leaders having the slightest suspicion of that fact.”
-Oswald Spengler
Communism/Socialism whatever you want to call it is an armed movement of the interests of the moneyed elites.
Is the second amendment in effect in Puerto Rico? I wouldn’t want to live with so many have-nots without adequate protection.
I wouldn’t want to give leftists the undeserved ability to use forethought but I couldn’t help but ponder……….
If they actually had a plan to populate and take over red states in our country ( especially major swing states like Penn, Ohio, Texas, VA and FLA)– what better way than to send the leftist progs fleeing from California and NY ( also referred to as District 1&2 in the Hunger Games analogy) and dispersing among the remnants of the Constitution believing populace.
They will flood to our states–demand progressive laws and agendas, prog teachers will be further subverting our schools and indoctrinating our kids etc etc. The flood from California and NY will be the same as a metastasizing cancer.
Atlas is shrugging all right , the industrialist in that work of fiction paid their employees well for their loyal efforts and government meddling destroyed everything . Amazon pays $15 bucks per hour where the largest steel and shipbuilding concern on tidewater once thrived . The union steel workers produced the steel and built ships for profit until government meddling sent it all packing and no it wasn’t the union wages who’s tax base built schools and roads to a point where one steel worker income bought a home and supported 3 other jobs from car sales to plumbers . Government meddling allowing dumping steel products into US markets was the culprit .
I bet it did not hurt that republican Mitch Mc Turtles wife is the daughter of a Chinese or is it Korean shipping billionaire either way you all get the point !
Steel makers fucked themselves when they failed to update their plants. They made 1/4 or somesuch as much steel as the Japanese per labor hour. That is what doomed the steelmakers. The US steel plants were ancient and inefficient. It was a mindset of management – that thought they had an unassailable grip on the US market – and unions who fought tooth and nail to prevent any automation that might eliminate even one union job.
My Union Experiences in:
Right after the military I worked a Union production job 3rd shift in Delco Remmy in the early 70’s. I was constantly being cautioned on my work pace and then taken aside and told in no uncertain terms (by my Shop Steward) to slow down I was making everyone look bad. I ended up doing about half the work I was capable of.
Soon after I was a Security Guard in a unionized Pharmaceutical complex. Our biggest problem was from union worker vandalism and sabotage. Some of the Union Shop Stewards acted like little mafia dons and to fire one of the union workers they almost had to be an ax murderer and you had to catch them with the axe. The ‘us against them’ mentality between the union workers and management was big and ugly. I was in a union as well in security and promotions were strictly by senority…I worked for a couple of idiots one the least qualified man on the force.
Soon after I ‘migrated’ to Texas, landed an entry level management position in a non-union company, worked my ass off and received 5 pay grade promotions in 7 years because I built and led motivated, successful, highly productive teams. I then jumped ship, worked my ass off and matched the same promotion record again in another non-union company, building and leading motivated, successful, highly productive teams. Then with what I had learned I opened my own company company and it took off like a rocket.
I know the history of unions, my Dad was alife long union man, I come from a union family, shoot I have Molly McGuirers on my Irish side! I understand past managenet abuses, but I saw how uncompetitive and adversarial unions could be, especially in my own career.
Not to defend the mindset of the guys running the steel companies or the unions. But those were fixable problems. And from what I understand it was as bad as the car companies. But we never had to let foreign steel into the United States. Politics defined, would be the negotiation between capital/ownership/management on one side and labor on the other. When we threw away our border, it became a one way street. Capital had no check on it. That was bad. But again, something that could be fixed. But then the motherfuckers start counterfeiting a trillion dollars a year. And lending it to themselves at 0% interest. And that counterfeit dollar spends just as well has yours and mine earned dollars, Llpoh. And they’ve used it to buy everything. Government is our only hope to crush those assholes. Or it’s going to be in a revolution.
Star – Without competition it was never going to be fixed. The US steel industry was literally 1/4 as efficient as the Japanese steel industry. It was too late. The result was inevitable. It is the same reason car companies hit the wall – the quality of the product, especially, was total crap. The closed market let it happen. Wages and benefits in the closed system became insurmountable obstacles, and the quality of the product continually fell. The Japanese products, initially poor, rapidly became outstanding in quality.
You are not being realistic. What drives quality, productivity, etc. is competition. Without it, capitalism will not function. The US waited too long behind closed doors, and the Huns arrived at the gates. Bad decisions have consequences.
See my comment to Llpoh, above for new information. One American steel company is winning.
See “American Steel” by Richard Preston for the story of one American company-Nucor Corp.-that pioneered and proved the concept of the electric arc furnace mini-mill that takes scrap steel and turns it into marketable product. No blast furnace, iron ore, or coking coal is needed. Their flagship new factory-built in a Crawfordsville, Indiana cornfield an hour south of United States Steel’s ancient and massive complex on the shores of Lake Michigan. It is operated largely by farmers and is proving that American know how, guts, and resilience can compete with the highly subsidized producers from other countries. For once something went right in the Rust Belt, but tariffs remain the wild card. Amazing success story.
I know someone from NY to send to PR that would be AOC. Send her in a garbage can full of cement to the reef off San Juan for fish food! That would make NY a much better place!!
I think AOC has met her nemisis. She will find out that Jeff Bezos swings a far bigger dick than any of the guys she went home with after the bar closed.
He will be single soon; she could use a fresh sugar daddy to pay her rent and probably wouldn’t mind getting some Anthony Weiner type of attention on her free Obama phone. Match made in heaven.
Send her with a bag of flashlight batteries; there, the grid is now working-all thanks to her smartness.
Griffin is screwed now. Bought at the top of the market, he’ll take a bath selling that property now.
Good,let nyc burn!Let the folks of NY state free themselves from the city!
NYC would-be-carpetbaggers and the Trump supporters are all suffering from this on many different levels, not just the financial levels:
https://www.investopedia.com/terms/s/sunkcost.asp
https://www.investopedia.com/terms/s/sunk-cost-dilemma.asp
The material was a little hard to grasp at first, but it really helped me understand things moving forward.
“Socialism is the Capitalism of the lower classes.”
Oswald Spengler
Looks to me like NYC is going to go the way of Detroit. When the financial center starts vacating the premises it is ovah.
Already in the works. AB moved their HQ to Nashville. Another firm who shall not be named is planning on the same. Plenty of firms are implementing de facto hiring freezes for IT on the Street and staffing them in the South. Personally, I think it sucks…it will become an influx of scumbags mucking up Southern locales.
Wanna talk about a Civil War 2? Well, THIS time around, the North has very little food production per capita; its productive capacity fled to AL, KY, and TN; its financial firms are relocating to ATL and NSH; and the world loathes NYC as the beacon of shit. Good luck!