Just Tax Everything In Sight!
That seems to be the attitude of New York Mayor de Blasio, anyway, and who knows – could soon become the view of legislators in this part of the world, as the tax revenues they receive just never seem to be enough.
So here comes de Blasio who likes the proposal to impose a property tax surcharge on apartments and houses with a market value of more than $5 million. And a surtax of up to 4% per year at that!
The Fiscal Policy Institute, we hear, came up with this idea. The Wall Street Journal notes that this esteemed body receives 25% of its funding from public employee unions, and five of eleven Board members also come from these unions.
Says James Parrott, the Institute’s Deputy Director and Chief Economist, “These owners bid up the price of New York City residential real estate, and since they don’t spend much time in these units, contribute little to the local economy compared to full-time residents.”
Really. Sound like Incline Village at all?
The proposal would impose the tax surcharge on homes valued at more than $5 million with a 0.5% surcharge, which would gradually increase to 4% for home values above $25 million. The WSJ mentions that a six bedroom penthouse on Park Avenue would face a surcharge of $3.1 million each year – and that’s over and above the “regular” property tax bill of about $260,000!
With such a mentality, is it any wonder that, according to the Tax Foundation’s recently published global stat – the International Tax Competitiveness Index – the United States ranks a miserable 32nd out of 34 industrialized countries in the Organization for Economic Cooperation and Development (OECD).
And if that’s not bad enough, consider that we would do even worse if the U.S. was measured against the 130 countries of the world tracked by the accounting firm, KPMG!
Says the Tax Foundation, “The United States provides a good example of an uncompetitive tax code. The last major change to the U.S. tax code occurred 28 years ago as part of the Tax Reform Act of 1986, when Congress reduced the top marginal corporate income tax rate from 46 percent to 34 percent in an attempt to make U.S. corporations more competitive overseas. Since then, the OECD countries have followed suit, reducing the OECD average corporate tax rate from 47.5 percent in the early 1980s to around 25 percent today. The result: the United States now has the highest corporate income tax rate in the industrialized world.”
Where are you, Obama?
CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters. You should consult your CPA regarding the implications to your own particular situation.
Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno. He can be reached at 831-7288, welcomes comments at firstname.lastname@example.org, and invites readers to consider his other commentary at http://blog.nolo.com/taxes.