"421a should go away" say housing advocates; Nobetary Reform news in Canada
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Scott Baker
Feb 8, 2015, 2:44:26 PM2/8/15
to Scott Baker, Andy Mazzone, Billy Fitzgerald
Hello Common Groundlings (and friends):
(I'm expanding the BCC list beyond the usual list for this edition of "Common Ground News," as emails like this are becoming. These updates generally go out once or twice a month now because of the rapid pace of news on our issues. Please let me know if you wish to be dropped from the list. I will still continue to update full members of Common Ground-NYC on matters relating to the chapter as needed).
The ongoing corruption of our culture through Real Estate purchases was highlighted in a recent front page NY Times article, which is even better viewed in the interactive online version:
The takeaway is that over half of the $5 million or more condos purchased are sold to obscure shell companies whose owners are unknown. It took the NY Times over a year, multiple reporters, sifting through hundreds of property records in over 20 countries etc. to uncover who actually owns these land-based money laundering vehicles (my term, not theirs). Of course, my presentations over the last year or more have highlighted the Big Five 94% tax-exempted properties including the rapidly becoming infamous One57, but still the yearly tax of just $17,268 on the just sold $100 million duplex in that building should shock us.
That amount is just 0.017268% of 100 million. A more typical $1 million condo paying $1,700 is paying 0.17% (itself still too low in a fully realized site valued rent).
As the Times article points out however, these extremely mispriced condos with almost no property tax are driving up the prices of relatively cheaper condos all over the city, from the decamillionaire class to the "mere" millionaire condos. If a condo goes for $100 million, why shouldn't a condo that would otherwise go for $10 million go for $20 million instead? And why shouldn't a condo for $1 million, go for $2 million? And perhaps more importantly for the struggling middle and working class, who would even bother building apartments, even for rent, for non-millionaires at all when there is so much money to be made through tax avoiding super-properties? Just do the math: it's a drastically regressive property tax. It's driving oligarchs - many if not most of them involved in corruption and criminal investigations in their home countries - to tax havens like NYC (though the same can be said for San Francisco and Los Angeles, and even "second tier" hot spots like Miami), while making it impossible for middle or even upper middle class New Yorkers to find affordable housing, let alone the working class and poor.
What is to be done?
Mayor DeBasio rightly made affordable housing the centerpiece of his recent annual State of the City speech. Mayor de Blasio Delivers State of the City Address
The reviews are generally positive, though wary of the program's great cost for 200,000 new or rehabilitated housing units (a bit less than it would take to house the homeless 4X over). In response to a followup NYT editorial, I left this comment:
The solution to NYC's - or any expensive city's - housing affordability problem has been known for over a hundred years. It was even tried partially in NYC in the 1920s and early 1930s and is the reason there are still so may pre-war apartments today.
It is the Land Value Tax (LVT). If you really want to encourage new home construction and other improvements, untax those, and make up the difference with just the Single Tax on location. This will reward people for building, punish people for hoarding and speculating, and return the fair share of the property tax to those whose demand created it, instead of the land-owner, who did nothing to increase the value of the land, but to be in the right place at the right time. If you still can't see how this works, take a look at this 8-minute video: http://www.youtube.com/watch?v=itO7OoKtNUc&feature=player_embedded made by some Single Tax graduate students. Read Professor Mason Gaffney's: "The Taxable Capacity of Land: Enough and to Spare" economics.ucr.edu/papers/papers08/ 08-12old.pdf
Or, see my presentation to the Henry George School, here: http://www.opednews.com/Diary/Case-Studies-in-New-York-C-by-Scott-Baker-Georgism_Henry-George_Land-Value-Taxation-141024-865.html
- Scott Baker, president of Common Ground-NYC
Yet, as the Mayor has said many times, we have the Tale of Two Cities. One that is barely affordable and shrinking. And another that is truly another world, for only the rich and unimaginably wealthy. The last results in ridiculous oxymoronic record-setting like this: In Program to Spur Affordable Housing, $100 Million Penthouse Gets 95% Tax Cut
Our colleague, Josh Vincent - CEO of the Center for the Study of Economics, has posted an update on the great LVT initiatives his organization is coordinating, as well as an appeal for a small amount of funding (a lunch for one of the oligarchs and their friends living at One57 might cost more than he is asking for): Will Connecticut Cities Regain their Balance?
But for $5,000, Connecticut can have more LVT. It is almost ridiculous what small amounts history can be made upon.
Monetary Reform News in Canada
As long-time members and supporters of Common Ground-NYC know, the local chapter voted three years ago to support Monetary Reform along the lines of Henry George's Greenbacking philosophy.
There is now news north of the U.S. border supporting these kinds of reforms.
Monetary Reformer Bill Still's report on Canadian decision allowing lawsuit against bank
of Canada for not continuing to create debt-free money after 1974 is a good summary of progress in the north.
Virtually all Canadian debt and inflation occurred after 1974 and is
completely unnecessary and illegal. Still Report #357 -- Correction on the Canadian Decision
Still also summarizes his plan for restructuring the Canadian monetary system, which could equally apply here in the U.S.
1.
No more government borrowing - phased in at 10% a year over 10 years by
allowing the banks to create 90% of the money the first year, then 80%
if everythign works out, then 70% etc.
2. "Forbid banks from creating the national money out of thin air."
3. Spend the new debt-free money on infrastructure projects. The projects are different in Canada, but not the principle. "(Infrastructure) projects put the most number of people to work. IT puts the greatest amount of money into the hands of the People."
Also, Greek Finance Minister Yanis Varoufakis, whom I and Andy interviewed (me and Andy once, and Andy alone again once: both are available on the HGS site and the first one here: OpEdNews Diary: From the Henry George School: Debating Economics),
explains his plans for Greece to Channel 4 news in Greece and why the
EU will be gone in 2 years if reforms are not carried out to eliminate
country-shrinking debt like Greece is experiencing.
Greece has shrunk
by 25% in just 5 years and the so-called 1.9% growth in 2014 is really
an illusion because the debt burden has only increased too. "We are going to destroy the Greek oligarchy system" | Channel 4 News says Varoufakis, but it remains to be seen who will destroy whom.
I wrote about the Greek situation, including a transcript clip from the Varoufakis interview above, an outline of a joint Mazonne/Baker economic plan for Greece, and more about sources of revenues, here: http://www.opednews.com/articles/Will-Greece-or-the-EU-Blin-by-Scott-Baker-Assets_Austerity_Debt_Finance-150208-883.html
Monetary Reform News in Canada
As long-time members and supporters of Common Ground-NYC know, the local chapter voted three years ago to support Monetary Reform along the lines of Henry George's Greenbacking philosophy. There is now news north of the U.S. border supporting these efforts.
Monetary Reformer Bill Still's report on Canadian decision allowing lawsuit against bank
of Canada for not continuing to create debt-free money after 1974 is a good summary of progress in the north.
Virtually all Canadian debt and inflation occurred after 1974 and is
completely unnecessary and illegal. Still Report #357 -- Correction on the Canadian Decision
Still also summarizes his plan for restructuring the Canadian monetary system, which could equally apply here in the U.S.
1.
No more government borrowing - phased in at 10% a year over 10 years by
allowing the banks to create 90% of the money the first year, then 80%
if everything works out, then 70% etc.
2. "Forbid banks from creating the national money out of thin air."
3. Spend the new debt-free money on infrastructure projects. The projects are different in Canada, but not the principle. "(Infrastructure) projects put the most number of people to work. It puts the greatest amount of money into the hands of the People."
Until next time, Happy Landings...
Scott Baker - President: Common Ground - NYC; NY State Coordinator, Public Banking Institute; Opednews Blogger/Managing Editor; Huffington Post Blogger; Author
Video Appearances & Slideshows here:
http://newthinking.blogspot.com/
Petitions:
-- Commemorate President Lincoln's Assassination with 1 Billion Debt-Free Lincoln $5 Bills
-- Replace Property Tax with Ground Rent in New York State
-- Assess NYC buildings using comparative properties
-- California Dreaming: Set up a State Bank with abundant CAFR funds
-- Complete the East Side Manhattan Greenway from 38-61 Streets and save bikers, help the environment, and clear up traffic
-- Tax Vacant & Unused Land to Return its value to the Community
-- Close New York State's budget Gap with money from its own agencies by setting up a State Bank
-- Defend the Clean Air Act
-- Produce debt-free United States Notes
-- Reclassify the FED's account, from private to public
Video Appearances & Slideshows here:
http://newthinking.blogspot.com/
Petitions:
-- Commemorate President Lincoln's Assassination with 1 Billion Debt-Free Lincoln $5 Bills
-- Replace Property Tax with Ground Rent in New York State
-- Assess NYC buildings using comparative properties
-- California Dreaming: Set up a State Bank with abundant CAFR funds
-- Complete the East Side Manhattan Greenway from 38-61 Streets and save bikers, help the environment, and clear up traffic
-- Tax Vacant & Unused Land to Return its value to the Community
-- Close New York State's budget Gap with money from its own agencies by setting up a State Bank
-- Defend the Clean Air Act
-- Produce debt-free United States Notes
-- Reclassify the FED's account, from private to public
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