Tag Archives: political economy

Dodging NYC’s Pied-à-Terre Tax

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Folks subject to New York City Democratic Socialist of America Mayor Zohran Mamdani’s pied-à-terre tax, and folks who aren’t subject but got the threatening letter from Mamdani anyway, are looking for ways to duck the tax.

offshore corporation in the Cayman Islands to hold their New York City pied-à-terre

Nope. Still a pied-à-terre subject to the tax. The owner’s corporation would still have to pay the tax.

pay a stranger to pretend to live in their second home as a full-time resident

Nope. That has other tax implications—income tax, for instance, as well as making the owner now subject to NYC’s landlord laws. And that’s apart from whether the owner can dodge the outright tax fraud aspect of the move.

There’s another way, guaranteed legal and guaranteed to get the owner out from under the socialist’s thumb. This consists of those owners selling those pied-à-terres to folks who want to live in the city, and for the now ex-owner stopping living there altogether. The city, anymore, as very little left to recommend it—even the finance industry is on the move out of the city, some out of the State—so there’s little loss here.

This Needs to be Rejected

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There is an “agreement” regarding the Strait of Hormuz that’s nearing completion. The trouble is, though, is that it’s between Iran and Oman, and it grants “oversight” of the Strait to…Oman and Iran. The arrangement would set up an inbound lane near Iran and an outbound lane near Oman.

While the deal would exclude charging ships tolls or fees, Iran might not be prevented from collecting voluntary payments to cover costs like security and search and rescue….

Oh, yeah….

This arrangement must be scotched from the start.

Neither Oman nor Iran can be allowed any sort of oversight, no matter how seemingly benign, of an international water like the Strait of Hormuz. The international water needs no oversight, only protection from nations trying to seize control of it.

Wrong Solution

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New York City’s Socialist (officially Progressive-Democrat) Mayor Zohran Mamdani published an extensive list of residences which he claimed were secondary residences—pieds-à-terre—owned by the Evil Rich, together with his intention of taxing them heavily for their existence. It turns out his minions didn’t trouble themselves to proofread the list, and it contains massive errors.

In his magnanimity, Zohran’s administration granted a reprieve, of sorts.

Homeowners across New York City now have an extra month to prove their primary residency and avoid Mayor Zohran Mamdani’s new pied-à-terre tax, an extension triggered by mass confusion over a publicly posted tax roll.

This is Leftist government being Leftist. It shouldn’t matter how much time a city resident has in which to prove the home in which he lives is his primary residence and not the part-time secondary abode that the city claims it to be. This is a reversal of our national tradition—and legal requirement—that it’s the government’s task to prove its charge is correct and not the accused’s task to prove it incorrect.

Mamdani’s administration should be required to prove—in court and city expense—that the home in question is, indeed, the pied-à-terre that the city clams it to be. There is no excuse for shifting that most basic requirement of government off onto the citizen. That’s the attitude of Ruler regarding his Subjects.

Go to Trial

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In the “legal” battle between Larry Ellison’s Paramount on the one hand and California, et al,, on the other over whether Paramount’s acquisition of Warner Brothers amounts to an anticompetitive monopoly, as California AG Rob Bonta claims, Ellison is pushing for a 4 November trial start date while Bonta and his fellow attorneys general in this case are holding out for a 5 April of next year start date.

Consider, though: Paramount, as part of the acquisition deal, agreed to pay Warner Brothers $650 million per quarter for every quarter the deal stays unclosed after 7 September this year, and a final payment of $7 billion, if the deal collapses or remains unclosed by June of next year. That’s what put the quote marks around the legal part just above.

If the defendant is ready to go to trial in early November, then that’s when the trial should start. That the defendant shall enjoy the right to a speedy and public trial, by an impartial jury is explicit in our Constitution for criminal cases, but the principle holds just as firmly in civil cases. California, et al., don’t get to delay the trial at government’s convenience.

Aside from that, they were ready to go to trial, tautologically, when they filed their suit. Delaying five months is nothing but an unethical effort to delay, delay, delay for the sole purpose of running up the costs to the defendant—hoping, perhaps to spend the defendant into giving up—for its impertinence in insisting on defending itself.

Markets and Refs

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Greg Ip has a problem with Kevin Warsh’s so-far performance as the new Fed Chair.

Warsh’s analogy of the Fed simply calling balls and strikes, borrowed from future Supreme Court Chief Justice John Roberts, doesn’t work. The Fed isn’t a neutral umpire, it is the most important player in the game.

I have a problem with Ip’s problem. He went on.

Markets respond not just to data but how they think the Fed will respond to data. Investors plug each new bit of information into the Fed’s assumed “reaction function,” which then spits out the appropriate interest rate.

That’s part of what needs to change: “markets”—which is to say investors and business management teams—need to respond to the actual economy, not what one or another arm of government (however independent or not that arm might be) is doing. They need to stop playing the ref so much and work from the economy a whole lot more. It’ll take a bit for them to learn that and then how to do that.

The Fed doesn’t have a role refereeing the markets, in any event. The Fed’s job is to maintain price stability and employment stability, which it does by setting its benchmarks at levels consistent with its long term inflation goal. Its role does not include manipulating the market’s response to those benchmark rate moves.