Latest posts by Gea Elika (see all)
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You would expect that, in a civilized society, those who have more income than they know what to do with would be asked to pay higher property taxes than those struggling to get by. If you’ve philosophical disagreements with that statement, you would still at least hope that the homes of the rich are taxed at the same rates as the average person.
Welcome to New York City.
In this city, the value of one’s home is just one of many factors determining the property tax rates the owner is expected to pay.
Consider the property taxes of this fair city. Rupert Murdoch – who recently bought the Wall Street Journal at a price that was about sixty percent greater than its stock value – has a home in an apartment that he bought several years ago for $44 million. Today, it’s probably worth considerably more than its valuation at the time Mr. Murdoch purchased it. Even so, he pays an annual property tax of $55,000. While that may seem like a lot of money, it is, percentage-wise, equivalent to someone who has a $500,000 home paying an absurdly low rate of $625 annually.
There are many extremely valuable New York apartments that enjoy considerably greater tax-breaks than Mr. Murdoch’s apartment.
Indeed, property taxes in the city are not based mainly on the typically-accepted progressive tax structure where the rich pay more; or even, for that matter, on a flat tax system, which is generally considered by mainstream economists to be barbarically regressive and terribly unhealthy for the economy.
They are based on a far more intricate tax-code that is filled with economic incentives and other measures that more often than not do more harm than good.
Measures that were written to encourage construction of low-income housing and other progressive goals are just as often exploited by the wealthy in ways that end up doing little more than robbing the city of much-needed revenue to fix an ailing public education and health system.
Though, to be fair the NYC property tax code, it has, historically speaking, strongly encouraged the construction of co-ops instead of condos. These co-ops did save the city from much of the subprime mortgage crisis that the countries banks helped bring on.
So, an attack on the unfairness of the tax code for New York apartments is not a diatribe aimed at those who think government manipulation of the economy inherently leads to failure.
It is simply to say this: In this city, the value of a home is just one of several important factors in determining the property taxes you pay.
Furthermore, if you purchase a condo, you are much more likely to pay property taxes at higher rates than the wealthy who own some of the most luxurious co-op apartments in the city. Many corporations are similarly charged lower prices than most individuals.
Life isn’t fair, but the tax code for New York apartments is really unfair.