Saturday, December 19, 2020

New York's Lost Tax Revenue

We have been paying close attention to New York City's sometime finances. They offer some insight into America’s future, while being a test case in the failure of leftist governance.

We have already noted, as everyone else has, that the richest 1% of New Yorkers pay nearly half the city’s taxes. Naturally, our political leaders want to increase their taxes, the better to drive them out of the city and to destroy the city’s tax base.

Better yet, considering that restaurants and bars have been closing down in unprecedented numbers, the city is thinking of destroying more small businesses by increasing the minimum wage.

The idiots who run the city government do not seem to understand that an increased minimum wage will cause more businesses to shut down. It’s not about extorting higher wages, but about how much value each employee adds to the enterprise. If an employee only adds $10 per hour in value, paying him $15 will translate quickly into bankruptcy.

New York City is being run by certifiable imbeciles. And it is being run into the ground.

Anyway, the latest canary in the coal mine is this report about New York City’s tax revenue shortfall. Apparently, there have been fewer and fewer real estate sales, both residential and commercial, and this has led to a veritable crash in tax revenues.

Zero Hedge reports:

According to Blomberg, citing a new report from the Real Estate Board of New York, sales of commercial and residential properties have plunged 49% this year through November, equating to a $1.2 billion loss in tax revenue for the city. 

The real estate group said a plunge in sales this year has resulted in a 42% decline in city tax revenue compared to 2019. This means Mayor Bill de Blasio will soon have to tighten the city's fiscal belt as turbulence in commercial and residential markets will produce lower tax revenue through 2021.

The buckling of the real estate market could soon send a crippling blow to the city's government to reign in expenditures. Shockingly, the city relied on the real estate industry for 53% of its annual tax revenue last year. 

James Whelan, the group's president, said New York City's economic crisis continues to worsen. 

Between the very rich and the real estate industry, that seems to comprise most of New York City’s tax revenues.

To those who are responsible, the solution is obvious-- a federal bailout:

"From rental assistance and unemployment benefits to state and local aid, New York needs federal relief," Whelan said. 

Let’s hope they do not get it. It might lead to fiscal sanity, but then again, it probably will not.


trigger warning said...

Realistically, I believe we will see a massive Federal bailout of Blue cities. Whether Republicans win the Georgia runoff or not.

whitney said...

The good news about the imbeciles running New York is they are closely related to the imbeciles running the country who are trying to turn the entire country into technological prison. Stupidity is the sand in the gears. When you entrust the operations of your evil plans to the stupid you never know what's going to happen

370H55V said...

I see a growing business in tax cert appeals--at least one sector of the NY legal profession thriving.

Sam L. said...

I am soooooooooooooooooooooooooooooooooooooooooooooooooooooooooo not bummed about this. Rats, returning to the sinking ship...