"Don't Soul-Search. Stiffen Your Backbone," Bill de Blasio told his fellow Democrats last month. But when it comes to stopping foreign jillionaires from exploiting our tax code, it seems the mayor could use some progressive ayahuasca.
A graduated 4% pied-à-terre tax on obscenely priced apartments disguised as near tax-free investments could net $665 million annually, money the city could use instead of having to pimp out its public housing to private developers or stopping vital ferry service to the Rockaways or pay for any of the things that actual residents of New York City desperately need and people who ski in Gstaad while their Park Avenue apartment sits empty don't.
But two months after the proposal was floated by State Senator Brad Hoylman, the mayor's office still hasn't taken a position on it. The NY Post's sources say it has "no chance" of succeeding, and so the mayor isn't going to make it a legislative priority. Mayoral spokesman Wiley Norvell said that's not true: the administration doesn't have a stance yet.
"We are developing our legislative agenda for the upcoming session in Albany," Norvell says in an email. "We look forward to reviewing the report and continuing our discussions with stakeholders as we set those priorities."
Another report in Capital reveals the mayor's unwillingness to tamper with our "insane" property tax code.
“The politics of it are so messy,” said one council member, adding that the administration “made clear they didn’t want to do it.”
("Politics" = campaign donations.)
James Parrott, the deputy director and chief economist at the Fiscal Policy Institute, the organization who drafted the pied-à-terre tax proposal, says there are other equally dire problems that require the mayor's attention: "Reform of the City’s business tax breaks can’t wait. ICAP expires in March of 2015, and it needs to be re-vamped, and there needs to be a re-thinking of the Hudson Yards tax breaks."
But Parrot says the issues of foreigners fleecing us and the fundamental unfairness of our property tax code may reinforce each other to make the problem untenable.
“Given the fact that very occasionally-present luxury owners contribute little to the city tax base, the idea will continue percolating even if not enacted right away. The proposal draws needed attention to the huge problem with how the current tax law values coops and condos. That problem has to be addressed sooner or later.”