Today’s Headlines

  • Schaller: Skyrocketing Uber and Lyft Trips Are Clogging NYC’s Most Congested Streets (News)
  • Nicole Gelinas Not Sold on Port Authority Airport Taxi Fee (Post)
  • Kabak: Cuomo’s AirTrain Will Kill Any Chance of Building Useful Rail to LGA (2nd Ave Sagas)
  • Dolan and Wilpons Want to Move the Islanders From Barclays Center to Belmont (Bloomberg)
  • Contra NYPD, Turnstile Jumping Can Lead to Deportation (Gothamist)
  • Motorcyclist Dies in Crash in East Williamsburg (Post)
  • Brownsville Residents Still Waiting for MTA to Reopen Pennsylvania Ave 3 Station (NY1)
  • Bioswale Haters in Flushing Have a Friend in Tony Avella (TL)
  • The Guardian Rated Bike-Shares Around the World and NYC Came Out on Top — For Highest Fees
  • Damned Bike Lanes (BxTimes)

More headlines at Streetsblog USA

  • Larry Littlefield

    I know that many here consider Governor Cuomo to be an anti-tax neo-Republican. When I looked at the data, however, I found that New York’s state and local tax revenues increased as a percent of the income of state residents from FY 2004 to FY 2014, two economically similar years. So we don’t have “the lowest taxes in decades.” We have the highest taxes anywhere.

    https://larrylittlefield.wordpress.com/2017/02/26/state-and-local-taxes-in-fy-2004-and-2014-census-bureau-data/

    So when you consider all the unmet needs, inadequate taxation does not appear to be the cause. The cause is revenues sucked back into the past and costs advanced to the present by Generation Greed. And the fact that those working for the government, as employees or contractors, continue to get richer relative to those paying the bills. Not so much in cash but in pension and other benefits that younger public employees don’t even get. No one wants to face that.

    At the same time, in low tax states taxes were cut further, leading to service cuts there. People in those states need to understand that they aren’t going to get what they don’t pay for. People in this state need to understand that they aren’t going to get what they do pay for.

  • bolwerk

    He’s only a neoliberal, not a neo-Republican. He is much less authoritarian than Republicans on social policies, afterall! The usual effect of neoliberal policies is higher tax rates for anyone who can’t threaten capital flight, so none of that is unusual. With federal tax policy favoring this sort of thing, every U.S. state (and most European countries too, BTW) are engaged in something of a race to the bottom regarding public services. This is why discussions about the means to pay for infrastructure by nature need to include the feds, even as we have to push the delicate line of demanding more local autonomy to decide what projects we want.

  • Larry Littlefield

    “The usual effect of neoliberal policies is higher tax rates for anyone who can’t threaten capital flight.”

    New York State corporate income taxes are also up relative to the personal income of state residents, though I don’t have readily available data on “business income.” And well above the U.S. average. And higher still for NYC, which has a separate corporate (and unincorporated business) tax.

    Retired public employees are exempted from New York’s state and local income taxes, however. So the interests that control the federal government, with its double taxation of wages and freelance income and preferential rates for capital income, are not the same as the interests that control the State of New York.

  • bolwerk

    I believe it. New York seems unusual in that it has a massive captive tax base: property incomes, small businesses that can’t just up and leave because of the siting of their retail frontage, entertainment industry, finance people wanting to go out and do lines of coke at clubs after work, etc.. It was the manufacturers who could leave, and did. Probably the only state with an analogous or maybe larger collection of captive industries is California,* and Silicon Valley is probably more poachable than Manhattan real estate.

    Just curious, do you know the answer to this question?

    * I’m counting at least Silicon Valley, the related Sand Hill Road private equity business, Hollywood, and porn.

  • Larry Littlefield

    “Are building owners taxed by the city on rental income if they reside outside of the city?”

    I’m not sure, but I believe the unincorporated business tax applies to those working in the city even if they live outside, and thus to non-residents, but I’m not sure. It was designed to tax income from partnerships in law, finance, accounting and other professions, and a friend who is an accounted at a law firm told me all the partners pay the UBT.

    The rental income (net of expenses) would not be taxed under the city’s personal income tax. But building prices are so inflated today that even at high rents I’m note sure anyone buying would actually have net income.

  • bolwerk

    I assume there are different ways a building’s incomes could be taxed, but outright escaping income taxes for an out-of-city (could be out-of-state) entity seems a little too easy. I can’t find a definitive answer at the city level though.

  • In my opinion, a properly run building should generate a small loss on taxes each year in order to offset the owners’ wage income. Remember, depreciation is a paper loss, so there should be a little money from that left over to distribute to the owners.

  • Larry Littlefield

    More relevant to the MTA and the fix Generation Greed has left it in, the New York State Department of Taxation and Finance has strict rules about what can qualify as a “capital expenditures” for tax purposes. Painting an rental building doesn’t qualify. Operating a rental building doesn’t qualify.

    But painting qualifies as a capital expenditure for the MTA, so it can be borrowed for instead of funded out of current revenues. So does operating service anywhere near a capital project (see “reimbursable expenditures).

  • Larry Littlefield

    Here’s something to send a shiver down your spine.

    http://www.dallasobserver.com/news/reducing-dart-to-fix-pension-fund-is-better-than-having-no-cops-or-firefighters-9221172

    “Taking money out of mass transit to save the city’s dying police and fire pension fund is not a fun idea. It’s nothing to look forward to. But we have to do something, and whatever we do probably won’t taste sweet.”

    “As far as I can tell, Griggs is completely agnostic on fault for the current pension crisis. He doesn’t like the DART option, calling it “an unfair choice.” But he likes it better than what the mayor is proposing.”

    “It took us decades to get here, and there is plenty of blame to go around. There is blame to go around to (former pension fund director) Richard Tettamant. There is blame to go around on previous boards of trustees. The members there were terrible.”

    “There’s blame to go around on previous city councils and mayors — council members for not attending meetings, previous mayors for not exercising the right of audit. There is so much blame to go around, but we are where we are. Right now, we have to fix this.”

    There was a massive retroactive pension increase for police officers in the early 1990s, right when most of the officers were moving to the suburbs. Imposed on the city of Dallas by the state, probably by suburban legislators and their city sympathizers. And lots of risky investments to make up for it that went south. New officers and firefighters, as always, got screwed.

    “When I got on the council in 2011, we had 2.94 officers for every thousand residents,” Griggs continues. “Our stated goal was three per thousand. We’re now down to 2.5 officers per thousand. We have 600 fewer officers than we should. “The pay is low. They don’t have social security. And now it looks like they don’t have a pension. And you’re asking them to do one of the hardest jobs and put their lives on the line.”

    Now the city of Dallas is going bankrupt, and they want to destroy transit to pay for the hole in the Dallas police and fire pension fund, because that’s “better than no police or firefighters.”

  • bolwerk

    Yeah, true. I guess many small-time owners could effectively pay no income taxes on real estate investments.

    Though, that conversation was about high-end apartments, which I guess is why the question came up.

  • Well, even on a luxury 500-unit building, the owner is building equity through payments of principal on the mortgage and (usually) capital gains through appreciation of market value. You want an annual dividend as well?

  • bolwerk

    I know many real estate investors have different philosophies (some just target capital gains), but I personally would certainly prefer a dividend on an income-producing project. Under many scenarios a dividend might escape income taxation entirely too, at least early in the depreciation cycle – though I guess this is not possible with a larger C-corp because there is no pass-through taxation?

  • bolwerk

    Isn’t that good for the rental property? It probably reduces paperwork, allowing the paint costs can be deducted in the year they were incurred rather than having to wait. AIUI, frequent painting is a right of NYC apartment dwellers too. It’s not always exercised, but it could be.

    Near as I can tell, painting for the MTA is properly a capital project. The paint job is meant to last for years or even decades, and probably involves a lot of multi-year planning.

  • Vooch

    the MTA has proof that once something is painted, the paint outlives the underlying structure, hence never needs paint ever again

  • Joe R.

    This could well be a glimpse at the future of NYC. It’s also one of the big reasons for the nationwide obsession with cutting taxes. Nobody likes taxes, but people are more amenable to taxes when they at least see they’re getting something useful to them for that money, whether it be schools, health care, mass transit, roads, even police. However, when you start cutting some of the things of value to pay for things of no value to most of the population, like retroactive pension increases or bloated staffing levels (i.e. the NYPD and NYCDOE), then you foment a movement to cut taxes. I’ll admit I’m even personally onboard for it. Since I’m not getting much of value for the taxes I’m paying, I’ll vote for anyone willing to cut them. For example, if someone came along who eliminated the NYC and NYS personal income tax, they would get my vote in a heartbeat. My attitude on this is it seems when push comes to shove, those in charge plan to starve essential services to pay for perks for the union class and political class. Given that, I figure lowering taxes will finally force them to starve the union and political classes as well. No skin on my back since it seems the essential services are being cut regardless of whether or not we cut taxes. If we’re going to do stuff which screws over the average person, like starve the subway, we might as well screw over those who screwed us over in the process as well.

  • HamTech87

    Can’t believe the Islanders want to move. I bet that a better team would attract more fans.
    Does anyone know how easy it is to take the LIRR to Belmont coming from points east? Do you have to go to Jamaica and then change trains?

  • Larry Littlefield

    Maybe as part of the deal they’ll redo the switch so that trains can come in from both directions.

    And please learn from Giants Stadium and make it a loop terminal.

  • Larry Littlefield

    As I said, taxes are going up where they were already high, and going down where they were already low, based on who has the most power in a particular place. It makes no sense to me.
    Look at the numbers.

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