I was amused to note an FT article yesterday suggesting that New York's financial elite are up in arms about Zohran Mamdani's new second-home tax, imposed in that city on properties worth more than $5 million that are not used as a main residence. Apparently, the owners of these properties are “fed up with being vilified”.
My heart does not bleed for them.
Imagine being fed up with being rich. Imagine how upsetting it must be to have to pay a little more tax when, by definition, you have the capacity to do so.
Then imagine what it is like to be homeless, or to be unable to afford your rent, or to pay to put food on the table for either yourself or your children, let alone pay the household bills that come in. Then imagine having to take multiple jobs to keep this oppressive and stressful existence going in a society that provides you with no other option.
New York's elite might be fed up with being vilified, but New York's population voted for Mamdani for one good reason, and that is that they are fed up with being exploited, abused and, in a quite literal sense, left hopeless.
I can imagine myself in the position of New York's financial elite. I can also imagine myself in the position of those struggling to survive in that city, which I have visited. But when doing both those things, whilst simultaneously engaging my empathetic brain, I can only feel sympathy for those who put Mamdani into office in New York, and none at all for its financial elite.
If they want to stop being vilified, I have a recommendation to make. It is that they should shut up, get on with paying their tax, and recognise their enormous good fortune, whilst praying that the rest of US society will continue to let them live in a style which nothing they can do can justify on the basis of the value that they create.
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I remember back around 1984 one of my friends complained that he was paying (I think) 600 quid a month income tax. I told him I wished I was earning enough to be paying 600 quid.
Hopefully the wiser amongst the owners of second or third homes will realise that taxation via the pocketbook is preferable to taxation via the pitchfork.
Its not often realised that there was a lot of squatting in the UK after WW2 even amongst the middle class – I remember overhearing an elderly lady with a very RP accent talking to her grandson about squatting an abandoned army camp just outside Bishops Lydeyard (outside Taunton) as the train pulled into the station there.
It could happen again
“If they want to stop being vilified, I have a recommendation to make”… sell the 2nd home and put the money to more useful purposes.
How do you know when a plane full of rich people has landed? when they switch off the engines, the whinning continues.
Very good
‘Vilified’?!!!!
Well I agree with you 100%.
“sell the 2nd home and put the money to more useful purposes.”
I have no idea how this works in NYC but in Florida Non-Homestead properties are taxed at a much-much-much higher rate than Homestead properties. People know that when they buy and if you do not want to pay the higher tax rate then do NOT but a second or third home in Florida.
Footnote: Homestead Property = Primary Legal Residence with the property address of said dwelling being your official legal address and present front-and-center on your FLORIDA driver’s license. If you ain’t a LEGAL resident of the State of Florida you may not homestead any property no matter where you park your buttocks, yacht, golf cart and cars.
It’s one thing to snigger at the rich whinging they have to transfer more of their income or wealth to the government.
But this policy does go against the principle of vertical and horizontal tax equity.
Is there any other tax where the amount due depends on whether you do approved or unapproved things with your asset. What will happen next if this principle is applied. The government could decide that people working from home or running a business from a room in their house or garage aren’t contributing enough in taxation. They’re avoiding renting a business property and not spending on town centre services while they’re out and about An extra Council Tax Band for you then.
I think this misunderstands both tax policy and the meaning of equity.
Tax systems already make distinctions based on behaviour and use. We tax cigarettes differently from books. We give reliefs for pensions, ISAs and research spending. We impose higher rates on second homes in some places. Business rates and council tax already depend on property use.
So the principle is hardly unprecedented.
Nor is horizontal equity some absolute rule requiring identical treatment in all circumstances. Tax systems routinely distinguish between activities based on their economic and social consequences.
The real question is whether the distinction is justified.
In the case of very high-value property, the argument is usually that such assets benefit disproportionately from public infrastructure, legal protections and urban economic concentration, whilst often contributing to inequality and housing scarcity.
You may disagree with the policy response, but that is not the same as saying the principle itself is incoherent.
And no, this does not logically lead to arbitrary punishment for working from home. That is a slippery slope argument. Tax policy always involves judgement about incentives, distribution and social outcomes. The existence of judgement does not invalidate taxation itself.
‘Aldridge Pryor’ – a character from Viz no less ha ha – but look ‘Aldridge’ – never mind the rich ‘transferring their wealth to the government’ – how much of this wealth is enabled because of the Government and what they spend in the first place? How much government money is transferred to the economy? The answer is ‘all of it’ of course, and all they are asking is for some to be paid back. And that helps the distribution of the money in society and combat inflation. Unless of course instead of democratically paying tax, you think it better that the rich stuff campaign contributions into politicians pockets to get what they want – even more of that Government money and more of yours too when they charge over the odds for the privatized public services you rely upon. Or do you?
My advice to you ‘Aldridge’ is to perhaps stay in the realm of ‘comics’ where you belong?
“That is a slippery slope argument.”
And this slope has ice-covered shit and motor oil all over it. One cannot maneuver this slope on ice -skis.
What is the difference between running a plumbing business out of your garage and working as an IT or financial expert in your home office with water front views in your Florida home for a London City based Financially Engineering conglomerate?
There is NO difference.
Your commentators have made their points about the rich being able to pony up, and very amusing too.
I think that Mr Pryor’s point wasn’t about whether the rich could afford to pay more though. It was about this being a distortionary tax and it’s applied based not on what you own, but on what you do with it. Distortionary taxes have disproportionate effects on behaviours, incentivise legal avoidance and also lying. In the USA the rich second home owner might convert to a hotel with the VIP suite being kept available for bookings by the rich property owner. Result, rich guy still stays in New York when it suits, the City doesn’t get the tax it thought it should.
We see in England which already has far fewer second homes than neighbouring countries changes in behaviour because of the double tax charge on those still in the listings as second homes. They are coming out of the listings and entering business ratings as holiday lets, eligible for rates relief too, and the tax collected goes down.
As a society that cares about efficient taxation we should avoid distortionary taxation.
Read other responses that deal with these issues and try to make some sense rather than bleat for the rich next time.
Aldridge Prior is a character from the Viz comic. The character appears as a pathological liar whose lies are ludicrous, such as The Nolan Sisters living in his fridge. Prior is instantly recognizable for his retro dress sense, usually a tartan jacket with a sheepskin collar and a pair of uncomfortable-looking platform shoes.
Source: https://viz.fandom.com/wiki/Aldridge_Prior
No comment!
I kind of knew that but bothered anyway
I have a tax dodge for the landlords in New York.
If they cut their rents to a genuinely affordable level, and spent money on repairs, and (renewable) energy efficiency upgrades, they would pay less tax, have happier tenants, and enhance the value of their properties.
If their excuse is that their property empires are too leveraged, well, whose fault is that? Did someone FORCE them to buy over-priced property on tick?
🙂
There have been years when I haven’t paid any tax at all and years when I have paid considerably more. I prefer to earn enough to pay lots of tax.