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Tax Breaks For Oligarchs: The $100 Million NY Apartment With A Property Tax Rate Of 0.017%

Tyler Durden's picture




 

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

The most disingenuous and sickening type of status quo defender is the person who blames the recent expansion in wealth inequality on a “lack of skilled workers.” Such a person is either a liar or an imbecile. There’s not much wiggle room there. Either this person doesn’t know that the Federal Reserve’s quantitative easing (QE) lifts asset prices while doing very little for the economy, or he or she is choosing to ignore it. Either this person doesn’t understand that the poor and lower middle class don’t own much in the way of stocks or bonds, or he or she is choosing to ignore it.

Since QE has been far and away the most important variable impacting the economy and markets since the crisis, ignoring its impact on wealth inequality is simply unforgivable. Yet, it’s more than that. Much more. Many of the polices existing in these United States not only encourage foreign oligarch money laundering into luxury skyscrapers that remain empty, but our society seems to go out of its way to ensure they have to pay as little in property tax as possible. Indeed, tax polices don’t benefit the rich, they benefit the super rich.

Nowhere is this more apparent that in the oligarch capital of America, New York City. A recent article in the New York Post made this perfectly clear:

New York City’s method of assessing property values is so out of whack that the buyer of the most expensive apartment ever sold — a $100 million duplex overlooking Central Park — pays taxes as if the place were worth just $6.5 million.

 

With controversial tax breaks granted to the One57 condo tower, the total property tax bill for the spectacular penthouse is just $17,268, an effective rate of 0.017 percent of its sale price.

 

By contrast, the owner of a nearby condo at 224 E. 52nd St. that recently sold for $1.02 million is paying an effective rate of 2.38 percent, or $24,279, according to data compiled for The Post by the Revaluate.com real-estate information website.

Basically, everyone gets squeezed in favor of the super rich, i.e., feudalism.

The figures, which Revaluate CEO Max Galka called “unbelievable,” show that the owners of the city’s 10 most expensive apartments pay effective rates that are a mere fraction of those paid on less-pricey properties.

 

Beneficiaries of the discrepancy include casino magnate Steve Wynn, entertainment mogul David Geffen and Ekaterina Rybolovleva, the socialite daughter of Russian oligarch Dmitry Rybolovlev.

 

Galka said that while the city values apartments at about 20 percent of their actual worth, the top 10 are valued at between just 3 and 6.8 percent of their sales prices, generating just $935,000 in taxes this fiscal year.

 

If those apartments were taxed at the national effective rate of 1.29 percent of sale prices, the city would pocket nearly $9 million, Galka said.

 

In a prepared statement, de Blasio spokesman Wiley Norvell said: “These inequities have been built into the tax system over decades, and they won’t be solved easily or quickly.”

 

“Any solution would require tax-law changes in Albany, and the impact of those changes on the lives of New Yorkers would have to be taken into account,” Norvell added.

In other words, not only will this not change anytime soon, but it’s apparently not even on the table. So “liberal” of you Mayor de Blasio. Just another fraud politician.

*  *  *

For related articles, see:

The Face of the Oligarch Recovery – Luxury Skyscrapers Stay Empty as NYC Homeless Population Hits Record High

A Warning to New York City – How Singapore’s Luxury Boom in Sentosa Cove Went Bust

Teachers’ Retirement Funds are Piling into Manhattan Real Estate at Record High Prices

Meet the Pied-à-Terre Levy – The Proposed Tax that Could Crush High End NYC Real Estate

 

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Thu, 03/12/2015 - 22:42 | 5884057 SmittyinLA
SmittyinLA's picture

They don't allow referendums in NY do they, I can tell, CA fixed that shit*.

* sorta, the looters shifted strategy to mortgage & municipal bond fraud

Thu, 03/12/2015 - 22:47 | 5884070 rehypothecator
rehypothecator's picture

Laws exist to protect the elites from those they plunder.

Thu, 03/12/2015 - 23:21 | 5884135 Philo Beddoe
Philo Beddoe's picture

FFS, how did this get a down vote? 

What, the fucking laws are just and spread evenly like peanunt butter over the ample,pasty thighs of Karl Rove? 

Thu, 03/12/2015 - 23:21 | 5884139 usednabused
usednabused's picture

Whats new about this anyway? Id bet if any of you check into it you will see that the larger properties in your area are taxed at way less percentage than any small or mid sized properties. I live in a rural area and people with 80x the land  and equivalent buildings are taxed virtually the same dollar amount as I am. Bring it up to the county and they ignore you. They say you are welcome to take it to tax court. This all has taken place in the last 5 years. Definitely directed from on high.

Fri, 03/13/2015 - 01:25 | 5884268 Dubaibanker
Dubaibanker's picture

Some of the money is also moving to Dubai where a USD 30m house went on sale yesterday....Dubai villa costing Dh 110 million to come to UAE property market

Not to mention that such houses did not exist barely 10 years ago and now they are attracting the rich and the famous from UK, India, Saudi etc instead of France, Monaco, US, Switzerland etc.

With rising crimes, instability, lack of business etc in Africa, UK, Europe, india, Russia etc, Dubai offers one of the options to move their families, wealth and live a great lifestyle with decent education and medical facilities. And as far as NY city's 0.017% rate is concerned, well, that drops all the way to zero in Dubai!

All mega city sized new developments executed in the last decade are here: http://en.wikipedia.org/wiki/List_of_development_projects_in_Dubai

Eternal sunshine for the mega rich!

Fri, 03/13/2015 - 05:09 | 5884405 Nage42
Nage42's picture

OMG I hope so!

Cause Dubai is one of the first places to come unhinged when the cracks start to show... and when things come unhinged, ooooh boy is it clusterfsck time.

All the superrich in the crazy-hot desert where only by sheer expenditure of energy can it be humanly possible to survive... so that when there's ANY kind of energy disruption... ruh roh!

 

Good ridance.

 

Fri, 03/13/2015 - 06:21 | 5884436 PeeramidIdeologies
PeeramidIdeologies's picture

Just building castles in the sand...

Can you imagine? That much money and nothing to do but hide it.

Mean while, there is a whole sub-culture of crazy entrepreneurs who want to make the world a better place. We work and work and work some more, research, develop, rarely succeed, usually fail, just begin the process again. With no lives and no money we push onward. Not too mention being spied on, manipulated and abused only to enrich our overlords in the end.

It defies all sensibility, yet we never give up...

Fri, 03/13/2015 - 06:56 | 5884465 Dubaibanker
Dubaibanker's picture

Since you are the ignorant kind, so I must educate you a bit, perhaps a lot. Hope you have travelled to Dubai or the Middle East or done some basic research before you open your mouth on things happening rapidly around the world especially on energy conservation and new energy sources among other things.

You may not have heard of this world class project where even George Bush visited in 2008 which is spending over USD 20bn on a new energy friendly CITY : http://en.wikipedia.org/wiki/Masdar_City

http://www.masdar.ae/en/masdar/what-we-do

Some of the MASSIVE projects on energy conservation and renewable energy coming to UAE are here: https://www.wam.ae/en/news/emirates/1395276526644.html

How the UAE has halved water consumption in golf courses is here: http://www.thenational.ae/uae/environment/special-report-saving-water-in...

Dubai alone will spend USD 8bn on energy saving projects in the next 15 years: http://www.meed.com/sectors/power/power-generation/dubai-to-spend-8bn-on...

If you include rest of Middle East, this number could reach USD 50-100bn.

Chinese solar factories are already under construction here: http://www.arabianbusiness.com/chinese-solar-panels-giant-plans-set-up-d...

The hydro company of Dubai is spending billions of dollars to conserve water. http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/uaebusiness/2015/...

Last several years, Dubai has made international headlines for solar energy development: http://www.khaleejtimes.com/kt-article-display-1.asp?xfile=/data/technol...

UAE is also one of the leaders in wind energy: http://www.altenergymag.com/news/2015/03/11/uae-wind-atlas-informs-middl...

Abu Dhabi had launched Future Energy Summit and commited USD 15bn, largest ever by any Govt: http://news.bbc.co.uk/2/hi/science/nature/7200052.stm

Abu Dhabi organises this: http://www.worldfutureenergysummit.com

I do not know of any country who has a 'Future Energy Prize' for education and innovation and that too running into millions of dollars: http://zayedfutureenergyprize.com/en/

Hope you will not make ridiculous statements whether energy disruption will cause Middle East and specifically UAE to survive any energy disruption....If any single recent events tell us that America is the one hoarding up on oil and no one else. It indicates America is worried, not the rest of the world. Better worry about the survival of America and not of others.

Fri, 03/13/2015 - 07:28 | 5884502 Marco
Marco's picture

You are proving his point. He said ANY kind of energy disruption, he wasnt talking about disruption in the fossil fuel market. Simply keeping the place liveable requires constant energy inputs, sure most of those inputs are domestic but they can still be disrupted.

The problem of getting access to food when shit starts hitting the fan is also an issue ...

Fri, 03/13/2015 - 07:49 | 5884537 Dubaibanker
Dubaibanker's picture

UAE and Mid East countries recognise the food security risk among other risks.

 

Urban agriculture a possible solution to UAE food needs

They are building a massive railways project to connect most of the countries and increase cooperation and reliance on aircraft or shipping usage for any future risks. 

$30bn GCC rail two years behind schedule  http://www.arabianbusiness.com/skins/ab.main/gfx/c4c2.png); background-position: 50% 0%; background-repeat: no-repeat repeat;">

This provides a good overview on the food security for Dubai and other cities. 

http://www.emiratesnbd.com/plugins/ResearchDocsManagement/Documents/Research/Emirates%20NBD%20Research%20Dubai's%20Agriculture%20Sector%20Overview.pdf

As of right now, everyone talks of energy disruption as meaning oil generally which is how the whole world runs. Oil is the lifeblood of the world economy. Without oil, there is no world or even domestic economy.

Meanwhile, it would be naive to think that Govts in any country are not planning for future eventualities or risks.

Also, isn't shit hit the fan plan impact all 203 countries? So, we are all together. We will have a global calamity if oil is disrupted or whatever else.

 

Thu, 03/12/2015 - 22:47 | 5884064 yellowsub
yellowsub's picture

The trick is call them safety initiatives like the traffic cams and 25MPH speed limit to get the peons to accept it  The peons are too ignorant to see another shake down.  Why would they risk taxing the super rich which may affect their political careers.

You know, the real crime and plague of the city is traffic violations...

Thu, 03/12/2015 - 22:55 | 5884090 Dasa Slooofoot
Dasa Slooofoot's picture

25mph?  I have 10mph limit in school districts with cameras because there was rash of kids getting hit by cars.  /sarc

 

Thu, 03/12/2015 - 22:45 | 5884065 Government need...
Government needs you to pay taxes's picture

In other Gotham news, the numbers of homeless continue to hit record highs, just like the stawk market.  What an economic recovery.

Thu, 03/12/2015 - 23:13 | 5884125 Harbanger
Harbanger's picture

Speaking of other news, Where's the ZH story about what's going on in Ferguson tonight?

Thu, 03/12/2015 - 22:46 | 5884068 Philo Beddoe
Philo Beddoe's picture

God damn thee to hell should you try and sell a cigarette without paying the taxman.  Yeah....fucking blacks...they are the problem. 

Thu, 03/12/2015 - 22:57 | 5884087 Philo Beddoe
Philo Beddoe's picture

At 50 cents a cig, Leroy or Lebron would have to sell 4 million cigarettes just to reap 2 million in net revenue. OK at 50 percent tax rate Leroy/Lebron would have to sell 4 million individual cigarettes just to pay 2 million in taxes. God damned darkies...always looking for a handout I tell yeah. 

Fuck you, Leroy/Lebron, me maths no so good...how about I just wack you and call it a day. 

Mr. Bigshot buying his whore nest...late paying his taxes...or not paying at all. No fucking problem. 

Thu, 03/12/2015 - 23:24 | 5884141 usednabused
usednabused's picture

Didn't you know it was a fucking AMBUSH, I'm telling you, when that nigga shot those pigs! But well when the Pig shot the nigga, noooo, that couldn't a been no ambush! Justified homicide lets call it.

Thu, 03/12/2015 - 22:46 | 5884069 willwork4food
willwork4food's picture

Big deal. So they tip the door openers $20, the whores $200 and the town council $20,000. It gets around. True rising the boats.

Whats not to like?

Fri, 03/13/2015 - 08:12 | 5884581 Peanut Butter E...
Peanut Butter Engineer's picture

Big deal. So they tip the door openers $20, the whores $200 and the town 'fucker' $20,000. It gets around. True rising the boats

There, I edited for you.

I prefer the language to be consistant, therefore if there is whore in the sentence then there must be a fucker in the sentence.

Thu, 03/12/2015 - 22:47 | 5884073 NOZZLE
NOZZLE's picture

This could be fixed by the assessor in 10 seconds.  Next up, property tax checks that never get presented for payment and spend the rest of their days in a desk drawer. 

Thu, 03/12/2015 - 22:57 | 5884094 booboo
booboo's picture

The rate is Just high enough to keep the little people out and low enough to keep the oligarchs in. The Porridge is juust right in Jew York City.

Thu, 03/12/2015 - 23:28 | 5884148 willwork4food
willwork4food's picture

U guys do no this was a /sarc...right?

Thu, 03/12/2015 - 22:48 | 5884075 joego1
joego1's picture

It takes a really long time to adjust the taxes on the wealthy. No so for the plebs.

Thu, 03/12/2015 - 23:02 | 5884104 Arrowflinger
Arrowflinger's picture

Down in Georgia, they have conservation use and timber tax preferential taxation, so that land worth $500,000 an acre is taxed at $300 per acre.

Thu, 03/12/2015 - 23:27 | 5884145 usednabused
usednabused's picture

Who could have downed you for saying the simple truth? Must be some sorta ass

Fri, 03/13/2015 - 08:45 | 5884672 Arrowflinger
Arrowflinger's picture

Oh, there are many suspects, some greater than others. There is a suburban county where the ruling oligarchs get to shift $5 million in taxes onto the other residents.

They don't want the riff-raff to find out.

Fri, 03/13/2015 - 08:49 | 5884687 Arrowflinger
Arrowflinger's picture

Get this - the latest expansion of the goodies was to extend them to corporate owners and it went on the ballot as "KEEP GEORGIA GREEN!"

Patriot Act ain't for patriots, the Affordable Care Act ain't affordable  and keeping Georgia green means $billion tax preferences for clear cutters of forrests.

 

Thu, 03/12/2015 - 23:17 | 5884131 Niall Of The Ni...
Niall Of The Nine Hostages's picture

Just to add to the fun, many of these tax-exempt apartments are the NYC bug-out joints in which European banksters plan to wait for the outcpme of the Third World War. All, no doubt, with breathtaking views to help inspire their doorstoppers on how they saw the undoing of Europe coming long ago---and how the simultaneous catastrophic meltdown of every nuclear reactor in France was somehow the work of Putin.

Thu, 03/12/2015 - 23:23 | 5884140 dexter_morgan
dexter_morgan's picture

Laws are not for oligarchs, but for those the oligarchs control. Take Hitlery and her email crap for example.

Thu, 03/12/2015 - 23:29 | 5884151 usednabused
usednabused's picture

And neither are taxes apparantly.

Fri, 03/13/2015 - 01:00 | 5884251 Harbanger
Harbanger's picture

They never said anything about taxing oligarchs.  You're the rich.

Fri, 03/13/2015 - 09:05 | 5884750 Lostinfortwalton
Lostinfortwalton's picture

Well, the Clinton Foundation is tax free. Taxes are for the 'little people'.

Thu, 03/12/2015 - 23:28 | 5884149 Freedumb
Freedumb's picture

An effective rate of 0.017 percent of its sale price.

 

0.017 percent? Outrageous! Surely they could have structured the anonymous, directorless orphan offshore LLC they used to purchase that place as a not-for-profit entity and be completely tax exempt.

Thu, 03/12/2015 - 23:48 | 5884160 UniqueSnowFlake
UniqueSnowFlake's picture

It would make more sense if AFTER spending $100M they were forced to add MORE money to these stacks? http://demonocracy.info/infographics/usa/us_debt/images/usd-us-debt_ceil...

 

The argument is that the State is now unable to waste or literally "pocket" $9Million extra? because of 10 apartments?

http://www.thrillist.com/eat/nation/the-best-fast-food-items-for-1-or-le...

Thu, 03/12/2015 - 23:54 | 5884184 Yes_Questions
Yes_Questions's picture

its ok.

the city will make up for it in volume.

Fri, 03/13/2015 - 00:14 | 5884200 Bunga Bunga
Bunga Bunga's picture

If the effective taxes weren't so low, they would not come. Then they went to Miami or whatever place, where they have to pay literally no taxes. So the cities compete against each other for lowest tax rates. It's called race to the bottom.

Fri, 03/13/2015 - 07:12 | 5884479 GoldSilverBitcoinBug
GoldSilverBitcoinBug's picture

That's principle of free markets: competition !

Funny when it comes to Gubernement and taxes, competition among cities, states and nations become instantly evil.

Fri, 03/13/2015 - 00:18 | 5884204 jomama
jomama's picture

this.

a paradigm shift is inevitable.

I'm amazed they've kept the music playing for this long.

ain't gonna be pretty.

Fri, 03/13/2015 - 06:23 | 5884440 PeeramidIdeologies
PeeramidIdeologies's picture

There will be a shift all right...but not in our favour

Fri, 03/13/2015 - 00:22 | 5884211 q99x2
q99x2's picture

After the revolution when they are sitting in a prison cell in Somalia or bits of radioactive dust they can think back to their tax breaks and pat themselves on the backs. We're mad as hell and not going to take it anymore.

Fri, 03/13/2015 - 02:24 | 5884325 WTF_247
WTF_247's picture

Haha

"the impact of those changes on the lives of New Yorkers would have to be taken into account,"

yea, right.

Those who buy those places DO NOT LIVE there most of the time - they are not New Yorkers.  There would be no change except positive - either lower priced properties get relief OR the higher priced pay more.There would be no impact to the people of NY.

If you have 100M to pay for an apt, you can afford to pay 1-2M a year in taxes (I will leave out the fairness of property taxes in the first place).

If not, perhaps the apt is not worth 100M. What happened to the Democrat ideals - those who have more "pay their fair share?????"

Why isn't Obama on this?  If the mayor of NY was an R and cut deals like this, there would be screaming and hollering - front page of HuffPo etc.

I would say to all NY who own property to ONLY pay what these guys pay - everyone pay 0.017%.  Its fair, right?

Fri, 03/13/2015 - 02:45 | 5884331 dunderduck
dunderduck's picture

Are the rich using more government services, that's why they ought to pay more in taxes?  I don't see the link here

Fri, 03/13/2015 - 05:06 | 5884402 spinone
spinone's picture

They should pay the same percentage as everyone else.  Its called progressive taxation.  When poorer people a larger proportion of their income or property value in taxes than the rich its called regressive taxation.  Regressive taxation causes a transfer of wealth from the poor to the rich and is the basis of the feudal system.  

I'll save the arguement about the validity of income or property taxes for another day.  Except to say if the government can print all the money it wants, why do they need to tax the people?

Fri, 03/13/2015 - 04:08 | 5884368 pcrs
pcrs's picture

Why is it not negative? I though all small percentages flipped a sign lately.

Fri, 03/13/2015 - 04:52 | 5884392 Youri Carma
Youri Carma's picture

I hear yoy bro, they're insane! We live the law of the jungle with too much fraud creating too much debt by too many banksters who have access to too much money with too much leverage … and little by little they went insane …


Fri, 03/13/2015 - 06:04 | 5884427 Old Poor Richard
Old Poor Richard's picture

Bill and other critics, why do you hate America?  Those tax breaks are creating jobs, man!  Every dollar not collected from the hyperrich employs 13 workers each at McDonalds and Walmart, the WSJ told me so.

 

 

Fri, 03/13/2015 - 08:03 | 5884569 overmedicatedun...
overmedicatedundersexed's picture

lets be clear, taxes are not a solution, as they benefit .gov and fatten it and bloat it, until it consumes everything of value, most importantly freedom. - the super rich own the .gov and the courts so of course they get deals no other breathing common human gets.

It's the game (.gov and policy) they own, do you think obuma and .gov came up with ACA, all 3 thousand single space typed pages by dem selves ??

who wrote the thousands of pages of the setting up of the patriot act, and the gestapo er homeland security dept--

Fri, 03/13/2015 - 06:22 | 5884437 Comte d'herblay
Comte d'herblay's picture

Here's why things will never change for the benefit of the human beans:

"yada.... ignoring its impact on wealth inequality is simply unforgivable"

 

THAT's IT!!!???    simply unforgivable????

Jesus h Christ!  If that's all there is to the protest about what the Jews of Wall Street have done to us for decades well, then...........harumpnh!!  And OMg, and isn't that a shame.

Until the blood of those blood suckers is careening down Wall Street in buckets, well, then, isn't that unforgivable.

No wonder these bastards can get away with murder.

Fri, 03/13/2015 - 06:57 | 5884466 Grimaldus
Grimaldus's picture

Property tax is theft.

Grimaldus

Fri, 03/13/2015 - 07:07 | 5884474 GoldSilverBitcoinBug
GoldSilverBitcoinBug's picture

Tax are theft, so why the FUD on ZH ?

I'm reading ZH, the Guardian or Huffpost ?

Fri, 03/13/2015 - 07:40 | 5884526 mrdenis
mrdenis's picture

If you like your roperty taxes ...you get to keep em' 

Fri, 03/13/2015 - 07:48 | 5884535 yogibear
yogibear's picture

The 99.1% have to pay the majority of the taxes. After all the .1% contribute to the politically powerful.

They think they deserve trillions more. Having everything is not enough.

Fri, 03/13/2015 - 08:41 | 5884618 brushhog
brushhog's picture

There shouldnt be a property tax at all. What the author apparently doesnt realize is that apartments in NYC all carry lower property tax by percentage. Consider that on one 1/8 of an acre there can be 50 apartments. The city is raking it in even at these lower rates.

The government doesn't need more money, it has to be forced to make due on less.

Fri, 03/13/2015 - 10:36 | 5885069 mastersnark
mastersnark's picture

A system built on the financial backs of the middle class is the best kind of system.

Fri, 03/13/2015 - 10:49 | 5885135 Savyindallas
Savyindallas's picture

But the rich make up for it by hefty charitable contributions to Harvard, Yale, ADL, AIPAC, Planned Parenthood,Democrat and Rpublican parties, the Netanyahu Presidential Campaign, etc. These institutions would have to cut salaries if we taxed the rich. 

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