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Wealth Tax

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  • White.Beard.Doc White.Beard.Doc 
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    Status: Physician
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    Joined: 02/06/2016

    New York City is in the process of legislating a wealth tax on all of the empty uber luxury apartments in Manhattan (for the folks who live elsewhere but own pied-a-terre empty apartments for occasional use in NYC).  This is in the form of a supplemental property tax on all dwellings with an appraised value of over 5MM.  The tax starts out at 0.5% of value payable each year for apartments worth over 5MM.  It goes up stepwise to 4% on apartments worth over 25MM.

    Ken Griffen just bought a penthouse in Manhattan for $238,000,000.  If the proposed tax goes through, he will owe an extra 9.5MM in property taxes every year.  The bottom is going to drop out on the market value of these expensive apartments if this tax bill goes through.  I am so happy that I did not just buy a 50MM apartment (hahah), because after the tax bill passes, it will loose half of its market value in an instant.  This tax law, if it passes, is going to lead to some very unhappy developers of these condo buildings on billionaire’s row in midtown.  It might mean bankruptcy for their LLCs, as the loans they take out to build these buildings are massive and the selling prices of their unsold units are going to plummet.

    #197976 Reply
    Liked by RosieQ
    Avatar G 
    Participant
    Status: Physician, Small Business Owner
    Posts: 1316
    Joined: 01/08/2016

    New York City is in the process of legislating a wealth tax on all of the empty uber luxury apartments in Manhattan (for the folks who live elsewhere but own pied-a-terre empty apartments for occasional use in NYC).  This is in the form of a supplemental property tax on all dwellings with an appraised value of over 5MM.  The tax starts out at 0.5% of value payable each year for apartments worth over 5MM.  It goes up stepwise to 4% on apartments worth over 25MM.

    Ken Griffen just bought a penthouse in Manhattan for $238,000,000.  If the proposed tax goes through, he will owe an extra 9.5MM in property taxes every year.  The bottom is going to drop out on the market value of these expensive apartments if this tax bill goes through.  I am so happy that I did not just buy a 50MM apartment (hahah), because after the tax bill passes, it will loose half of its market value in an instant.  This tax law, if it passes, is going to lead to some very unhappy developers of these condo buildings on billionaire’s row in midtown.  It might mean bankruptcy for their LLCs, as the loans they take out to build these buildings are massive and the selling prices of their unsold units are going to plummet.

    Click to expand…

    This kind of thing just makes me so mad.  I will never own a $5MM property in Manhattan (or anywhere for that matter), but I think it is so unfair that something like this can happen.

    Tax everybody’s condo at the same rate, a la flat tax.

    Whatever: this doctor voted with his feet and will never again live in NY.

    #197991 Reply
    Avatar GasFIRE 
    Participant
    Status: Physician
    Posts: 151
    Joined: 01/08/2018

    New York City is in the process of legislating a wealth tax on all of the empty uber luxury apartments in Manhattan (for the folks who live elsewhere but own pied-a-terre empty apartments for occasional use in NYC).  This is in the form of a supplemental property tax on all dwellings with an appraised value of over 5MM.  The tax starts out at 0.5% of value payable each year for apartments worth over 5MM.  It goes up stepwise to 4% on apartments worth over 25MM.

    Click to expand…

    This kind of thing just makes me so mad.  I will never own a $5MM property in Manhattan (or anywhere for that matter), but I think it is so unfair that something like this can happen.

    Tax everybody’s condo at the same rate, a la flat tax.

    Whatever: this doctor voted with his feet and will never again live in NY.

    Click to expand…

    It seems they will also chase you down if you try to flee:

    https://www.cnbc.com/2019/03/08/tax-collectors-chase-rich-new-yorkers-moving-to-low-tax-states.html

    Congratulations on a successful escape.

    #198000 Reply
    White.Beard.Doc White.Beard.Doc 
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    Status: Physician
    Posts: 679
    Joined: 02/06/2016

    These new tax laws should serve as a warning for the well off in our country.  The change in deductibility of SALT from income taxes carved about 500k off the market value of the more expensive homes in our local community.  And this new NYC property tax law will carve millions off the market value of expensive NYC apartments if passed.

    The bottom line is that I see higher taxes on the more successful households in our country likely coming in the near future, directed at both wealth and income.  In my opinion it would be wise to factor some of these trends into future financial planning.

    #198015 Reply
    Avatar HandFellow 
    Participant
    Status: Physician
    Posts: 150
    Joined: 01/18/2016

    I find it interesting timing to broach the subject.  Obviously there are presidential candidates that are campaigning on this topic right now, so the topic is current.  However, it was just 16 months ago that the new tax plan was enacted giving this same wealthy population was given a tax code that was largely in their favor.

    As mentioned prior, a major issue is the definition of wealth.  Physicians definitely have money, but nowhere near the wealth of the most wealthy in this country.  When I hear about AOC or other politicians proposing a special tax bracket for those earning over 10 million a year, I tend to agree with them or at the very least, not really bristle.

    #198018 Reply
    Liked by RosieQ, Zaphod
    Zaphod Zaphod 
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    He could have saved a 100M and bought the whole Chrysler building.

    I’m not sure I really care about this holiday apartment tax if that’s how its instituted. This is effectively a consumption tax, and might even have the opposite effect they are looking for. 4% seems insane mind you, 0.5 I think one could live with.

    #198030 Reply
    Avatar G 
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    special tax bracket for those earning over 10 million a year, I tend to agree with them or at the very least, not really bristle.

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    Why?  How is that ok?

    I think hand surgeons earn plenty of money; let’s put them in a special tax bracket.

    Perhaps you’re smarter than most, we should redistribute some of your brain cells.  Perhaps you have more hair, you have plenty to spare for the folks who are bald.

    Pretty arbitrary.

    When I hear about AOC or other politicians proposing

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    All I hear is the promise of another general election with abysmal choices for moderate Americans, but I digress….

    #198033 Reply
    Liked by ENT Doc
    Avatar HandFellow 
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    Status: Physician
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    Actually, I do have quite the full head of hair, so if you need some, let me know.  And I think the tax system taxes based on income rather occupation, so i’m not in danger of being put in my own special bracket.

    I think the tax code is currently progressive, so adding another tier about 9,500,000 above the highest current level doesn’t seem inconsistent.  In fact, I think you could call the current tiers arbitrary.

    I don’t really understand why I should feel bad about someone earning 10 million a year being able to buy one fewer Maybach while my patients work 40 hours per week and can’t afford their high deductible.

     

     

    #198034 Reply
    Avatar Tim 
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    Status: Accountant
    Posts: 1419
    Joined: 09/18/2018

    “The complexity is simply mind blowing and frankly impossible.”

    At some point, impossibility gives way to reality. Like, why screw around with the hard stuff?
    Checking account ? Tax it.
    Bank account ? Tax it.
    401k ? Tax it.
    IRA ? Tax it.
    New Year’s Eve? That sucking sound is piece of cash being sucked outta yo wallet.
    No reason to wait for a return, it’s not net wealth it’s a cash grab. Why bother with exemptions? It’s all for a good cause. Can’t wait for January 2, forced liquidation.
    Geez really simple, take the money.

    Cool part is even tax churches and hospitals and charities. Eliminates lobbyists! Gone!

    #198036 Reply
    Liked by Zaphod
    Jaqen Haghar, MD Jaqen Haghar, MD 
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    Status: Physician
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    Joined: 07/27/2017
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    The important thing about being successful in politics is knowing how to create a credible villain.  Illegal immigrants, the NRA, the wealthy…   AOC, Obama, Bush, Trump….  The average person needs someone to hate and to blame their problems on.

    The wealthy are always a good, clean target though, that deserves a hearty rogering.  As long as, by definition, they are more wealthy than us.

    I however, for one, believe sea turtles are actually to blame for most of our problems.

    Think about it…  they float around lazily in the ocean all day, arrogantly eating sushi and caviar, pooping in the beautiful turquoise water, breathing up all the precious air we need, with their flappy-flappy paddle legs flapping about….

    but then again, I was never very good at politics.

    Still, F- those shelly bastards!

    #198037 Reply
    Avatar G 
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    Status: Physician, Small Business Owner
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    Joined: 01/08/2016
    if you need some

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    I don’t, but thanks.

    the tax system taxes based on income rather occupation

    Click to expand…

    usually.  however, I gave up trying to get the 199a to work for me.  how about you?

    so i’m not in danger of being put in my own special bracket.

    Click to expand…

    you’re missing my tongue-in-cheek point.  how about windfall profit taxes?  congress has done that before.

    you could call the current tiers arbitrary

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    I absolutely do.

    I don’t really understand why I should feel bad about someone earning 10 million a year

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    I don’t feel bad about them.  However, I do think it is unfair to take 70% from one person, 35% from another, 15% from another when each is a guy or gal working a job.

    I’m a terrible debater, that’s all I got, other than saying take a look at the Fair Tax Book.

    #198039 Reply
    Liked by Tim
    ENT Doc ENT Doc 
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    Status: Physician
    Posts: 2675
    Joined: 01/14/2017
    I don’t really understand why I should feel bad about someone earning 10 million a year being able to buy one fewer Maybach while my patients work 40 hours per week and can’t afford their high deductible.

    Click to expand…

    Can they not afford their deductible because of other spending choices?  Unless you are going to look at the entire spending picture you can’t paint a doom and gloom picture of high deductibles (or premiums), especially when Medicaid covers middle class families and subsidies cover even more.

    I don’t really understand why the marginal dollar that someone earns is judged to be more evil or worth taxing than the previous dollar.  I also don’t understand why it seems reasonable to tax someone such that half of their marginal income is going to the government, especially when their use of government services pales in comparison to those paying nothing or next to nothing in income tax.  Nothing “fair” about that.

    #198048 Reply
    Liked by Lordosis
    Avatar Panscan 
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    Higher tax rates do nothing because people will just structure their assets in a way to avoid them. Do you think it’s by coincidence that buffett pays like 15% tax?

    If you want to increase tax revenue you do it by removing deductions, not changing rates. Rates don’t mean anything because if you can claim a trillion deductions those rates are never realized. Eliminate all deductions, tax all income the same. Get rid of the irs and simplify it all.

    There is 0 evidence that increasing tax rates will do anything productive. It will lead to increased rates of tax evasion, more complexity to the accounting and if anything will hurt the “low upper class (relatively, like doctors) way more than it will hurt the mega rich, who can employ 20 accountants to structure their stuff in most tax efficient way possible.

    #198049 Reply
    Avatar Panscan 
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    If you say Buffett could afford one less Maybach then the way you do that is by removing his plethora of deductions. Not increasing the marginal rate that he doesn’t even pay.

    #198050 Reply
    Lordosis Lordosis 
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    Status: Physician
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    Joined: 02/11/2019

    The biggest deductions that the super rich have are the lower long term cap gains rate and being able to deduct losses.  This is how they keep their effective tax down.

    I would not like to lose those deductions since when I retire those will be the deductions that I need to keep my rates down.

    “Never let your sense of morals prevent you from doing what is right.”

    #198053 Reply
    Liked by Kamban, Tim

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