The rising chant of “Soak the rich!” has begun to seep through the walls of luxury condos in New York City. Since hedge fund multi-billionaire Kenneth Griffin shattered records by paying $238 million for an apartment at 220 Central Park South – and since Democrats wrested control of the State Legislature from tax-averse Republicans – plans to impose a long-shelved pied-a-terre tax on the super-rich are showing new signs of life, the New York Times reports.
Testifying before a joint committee of the State Legislature on Monday, City Council Speaker Corey Johnson said, “New York City is in need of a luxury pied-à-terre tax.” He added, “There are few better examples of the burgeoning inequality in our city than $238 million homes that will most likely sit empty.”
Mayor Bill de Blasio chimed in: “I believe that millionaires and billionaires are not being taxed at a high enough level.”
Under a proposal first introduced in 2014, a pied-à-terre tax would institute a yearly tax on homes that are worth $5 million or more and do not serve as the buyer’s primary residence. For properties valued between $5 million and $6 million, a 0.5 percent surcharge would be added on the value over $5 million. Fees and a higher surcharge would apply to homes that sold for more than $6 million, topping out at a $370,000 fee and a 4 percent surcharge for homes valued at more than $25 million.
The office of the city comptroller, Scott Stringer, estimates that a pied-à-terre tax would bring in a minimum of $650 million annually if enacted today. “For us, $650 million a year is a lot of money to deal with things such as our subway crisis,” Stringer says, adding that he people most likely to be affected by such a tax can afford it. He calls them the “international elite.”
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