"Mansion Tax" Coming To New York, Compliments Of Mayor de Blasio
For all the talk about the "brilliance" of Thomas Piketty's proposal to tax the financial assets of the "rich", Zero Hedge first warned it would come in September 2011, and subsequently the IMF also sent out trial balloons in various white papers, even though it vehemently denied it was espousing such a concept. Of course, what happened next was just this in March of last year when taxpayers, rich and not so rich, ended up getting taxed involuntarily when Cyprus collapsed and deposits across the board were confiscated to bailout the local banking system. But the first real salvo to layer on taxes focusing on the ultra rich came earlier this year when the UK's "Mansion Tax" proposal became a reality.
This too is something we had warned about previously: "if you are buying a house, enjoy the low mortgage (for now... and don't forget - if and when the time comes to sell, the buyer better be able to afford your selling price and the monthly mortgage payment should the 30 Year mortgage rise from the current 4.2% to 6%, 7% or much higher, which all those who forecast an improving economy hope happens), but what will really determine the affordability of that piece of property you have your eyes set on, are the property taxes. Because they are about to skyrocket."
And since the entire developed world is insolvent (don't believe us, believe Paul Singer), it was only a matter of time before this percolating English idea moved across the big pond: this we warned about also when we said that "if anyone is still confused, the IMF-proposed "mansion tax" is most certainly coming to the US, and every other insolvent "developed world" nation, next."
Today we learn that we were right about this too. The Post reports that "After his failed attempt to hike income taxes on the wealthy, Mayor de Blasio is eyeing another way to squeeze money from millionaires to fund another top priority: affordable housing. Multiple sources tell The Post that the mayor is talking to people about how to increase the so-called “mansion tax” on homes selling for $1 million or more to help offset the cost of adding 200,000 affordable-housing units."
Will this latest attempt to enforce equality among the classes, where the rich are the sole beneficiaries of the Fed's generosity as Singer also pointed out, be fast-tracked? Perhaps not:
However, boosting the mansion tax would require Albany’s approval, and sources say that could be a major hurdle for de Blasio because Gov. Cuomo smacked down his income-tax-hike idea earlier this year. The state mansion tax already exists statewide and levies a 1 percent fee on residential property sold for at least $1 million. In the 2012-13 fiscal year, it generated a record-busting $259 million. While it covers the entire state, The tax hits hardest in Manhattan, where seven-figure prices are common even for modest-sized co-ops and condos.
But while there may be some initial objection to the tax, with the Fed on pace to halt monetizing the US federal deficit, it is inevitable that the "rich" are duly taxed on their financial assets: first houses via a "Mansion tax", and then all their other holdings. Because the underlying reality of an insolvent world is just that: without new sources of funds, the global ponzi scheme will simply grind to a halt, and then collapse, as Bernie Madoff can so willingly attest.
Of course, how soon until the "rich" do the next logical thing and sell their assets ahead of being taxed through the nose on their holdings, is the only remaining question. As always, with game theoretical set ups of this kind, he who sells first (anything that is or is not nailed down), will sell best.
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