End of the $400 Property Tax Rebate

Ironballs;

I didn't vote for Obama, and am highly skeptical of his pitch. Having said that, I think we should give the guy a chance. I think you do your cause harm by jumping on the guy at every chance. He's being handed a rough hand (as a poker player, I think in these terms) and I doubt he is going to do anything rash. He is politically shrewd, and he probably knows better than anyone that he received only 52% of the vote, when by conventional political wisdom it should have been a landslide against the party in power, given the rout in the stock market. That slim majority can quickly swing to a minority if he over-reaches.

On to other topics:

I would caution all those who propose a restoration of the commuter tax. I am a resident of the city, so it would not impact me. However, I think it would send out a very bad signal and cause businesses to flee. Many wealthy people today have the type of job which can be located anywhere that provides an internet connection. If this tax is imposed, some of them will choose to pick up and move their business. Moreover, NYC has come a long way in shedding its "tax and spend" image, and restoring this levy would undo some of that progress.

Posted by: benson at November 6, 2008 10:49 AM

I'm with Joist,Ironballs and Troll. $250K does not go that far in NYC, and one is certainly not "rich" to the point that any extra income one earns should now be taxed at a 44% marginal rate.

Posted by: benson at November 6, 2008 1:56 PM

Snark Slope;

Somone earning $250K is not a "Master of the Universe" hedge fund manager. Rather, he or she is probably a mid-level executive. Such a person would have the following expenses:

-401K: likely 6%, if not 10% of salary. That's probably $2K/month,right there.

-Health Insurance premiums: $500/month.

-Medical expenses not covered by insurance: easily $500/month for a family of 4.

-Education expenses for kids (such as saving for kid's college): $1-2K month

-Car expenses. Even with just one car, you're talking about $500/month, if you consider insurance, maintenance, car payments, etc.

Just adding up these costs, we're talking about $4.5-$5.5K per month, and we haven't touched home maintenance costs, commuting costs and food costs.

The lifestyle I describe above is not lavish. It is a middle-class lifestyle as known in countless suburbs. Such a lifestyle is quite expensive in NYC, however. Last time I checked, our car insurance rates are double the nation's.

Posted by: benson at November 6, 2008 2:25 PM

Miss Muffet;

I think that my estimates of the medical expenses are not atypical. MANY policies today have a high deductible of at least $500 per person, and don't cover some procedures. Have your kids ever had work by an orthodontist, which is not covered? The coverage for eyeglasses is also minimal.

As for the 401K: I don't think it is a "luxury" to be saving for my retirement. I would like to be self-sufficient when I retire, and not be a burden to anybody. I surely could use that money for other things, but I am trying to do the right thing. My point, in my response to Snark Slope, is to show that for a middle-class person trying to do right by his family in NYC, $250K doesn't make one "rich".

Finally, I can respect your choice about a car, but I think you need to be realistic. To have one car in NYC is not an outrage. I am not talking about buying a HUMMER, I'm talking about having a family car, and once again, I don;t think that makes me "rich"

Posted by: benson at November 6, 2008 2:47 PM

Boerum Hill;

Well said!! My sentiments, exactly.

Miss Muffet:

I never said that I felt "squeezed", and indeed, I am well aware that MANY folks have to get by on a whole lot less.

My point is this notion that someone earning that much in NYC is "rich" and therefore should now hand over almost half their money to government entities is nuts. I do not own a second home, I do not own a boat or some other extravagant toy. I am not "rich". Moreover, I take pride in what I've accomplished, given that I started out life in the Red Hook Projects.

I believe in the progressive tax system, but I don't believe in class resentment, which is what this borders on.

Posted by: benson at November 6, 2008 3:00 PM

Miss Muffet;

No apologies necessary! Have a nice day!

Posted by: benson at November 6, 2008 3:34 PM

Tybur6;

Your question is a very good one, and I could spend an hour on this topic.

Have you ever heard of the phenomenon called the "Dutch Disease". If not, I'll try to explain it briefly. It is an economic phenomenon wherein a country with a lucrative commodity business, in particular oil, finds that its other industries cannot compete. The reason it is called the Dutch Disease is that it actually happened in Holland. The oil industry is so lucrative that prices, exchange rates, housing, etc. adjust to it, to the detriment of its other industries.

I think something akin to that has happened in NYC, except that our sugar daddy has been Wall St. The salaries, housing prices, etc. have adjusted to the huge incomes of this once-lucrative industry. As this sector continues to implode, I think we are in for a VERY rough time.

I think you can find symptoms of this "neo-Dutch Disease" right on the commentary of Brownstoner (I am thinking of Lisa's worldview, in particular). There is unhealthy dose of non-reality in this commentary that can only be sustained when times are extremely flush.

Not too long ago, I saw it argued in Brownsotner that builders should be required to demolish buildings piece-by-piece, so as to salvage every possible material, even though it was reported that such an approach would be much more labor-intensive and would drag out the project schedule consderably.

All of the folks who argued for this approach never considered the cost of this approach, and how it would make NYC's real estate more unaffordable. You talk about "luxury"?? This is true luxury!!

I think we are in for a long, hard ride as NYC and the folks here crash back into reality.

Posted by: benson at November 6, 2008 4:32 PM

Geekspice;

Obviously I don't know how old you are, but I am wondering if you lived through the city's decline from the late 60's to the early 90's? I can't believe that you lived through it and make the statement that you do. Your statement is quite similiar to that made by the City Fathers during the City's decline of that time. They could never get themselves to believe that business would flee from NYC, even though in fact it was happening right before their eyes. Taxes upon taxes were heaped on the remaining bsuinesses, all with the thought/arroagance that they were not going anywhere. The City lost 100's of corporate HQ's at that time. A small sample: Pepsico, Texaco, GE, AT&T and General Foods.

I am not making this up. Take a look at the history of this period.

Posted by: benson at November 6, 2008 4:56 PM

Denton and Geekspice;

Really???? I am taken aback by your statements. New York's decline was very real, and not just a matter of B&W photos and/or economic cycles. Are we talking about the NY of "Taxi Driver" or "French Connection" - both movies in very living color?? The NY of the blackout riots and 2300 murders per year? The NY wherein whole neighborhoods like Bushwick were going up in flames and owners were walking away from their properties? How about that famous photo of President Carter standing agape on Charlotte Street in the South Bronx, as he stares at a scene resembling "Berlin After the War". Perhaps you were not mugged during that time, but I was, as well as 10's of thousands of other folks just going about their business.

Geekspice: you misrepresent my statements. Nowhere do I say that taxes were the sole cause of this situation, nor do I advocate for special tax breaks for any particular corporation. My point is the overall level of taxation, and the number of taxes. Any municipality that arrogantly assumes that it can raise taxes at will, without considering competing locales, will send small and large business packing for friendlier climes. Just 2 weeks ago I returned from a trip to Malaysis, where I saw block after block of factories set up by American and Japanese electronic companies, to take advantage of low taxes and labor rates. This is the brutal reality of the current economic competiton.

Posted by: benson at November 6, 2008 11:12 PM