The soak-the-rich crowd is at it again. This time, the target is wealthy property owners who do not reside full-time in the city.
The de Blasio administration is considering a plan that would apply a property tax surcharge on properties valued at more than $5 million if the owner does not make his or her primary residence in New York. The surcharge would start at .5 percent on properties valued at more than $5 million and rise to 4 percent on properties valued at more than $25 million. Advocates say this is a way of getting more revenue and creating a more just, more equitable society without reaching into the wallets of New York residents.
Not surprisingly, the rationale reflects a keen misunderstanding of economic reality.
The tax hikers have identified a predictable set of villains: wealthy, successful out-of-towners who wish to own a piece of New York property. Rather than welcoming this kind of commitment, the tax hikers wish to punish those who make the investment.
The rationale goes something like this: these people can afford to pay more and besides, the tax hike would not affect those who live—and vote—in the city. It’s a perfect tax!
Except, of course, that there will be plenty of harm done if the proposal, originally devised by the Fiscal Policy Institute, is implemented.