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Tax Breaks for Oligarchs – The $100 Million Manhattan Apartment with a Property Tax Rate of 0.017%

Published: March 11, 2015
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The most disingenuous and sickening type of status quo defender is the person who blames the recent expansion in wealth inequality on a “lack of skilled workers.” Such a person is either a liar or an imbecile. There’s not much wiggle room there. Either this person doesn’t know that the Federal Reserve’s quantitative easing (QE) lifts asset prices while doing very little for the economy, or he or she is choosing to ignore it. Either this person doesn’t understand that the poor and lower middle class don’t own much in the way of stocks or bonds, or he or she is choosing to ignore it.

Since QE has been far and away the most important variable impacting the economy and markets since the crisis, ignoring its impact on wealth inequality is simply unforgivable. Yet, it’s more than that. Much more. Many of the polices existing in these United States not only encourage foreign oligarch money laundering into luxury skyscrapers that remain empty, but our society seems to go out of its way to ensure they have to pay as little in property tax as possible. Indeed, tax polices don’t benefit the rich, they benefit the super rich.

Nowhere is this more apparent that in the oligarch capital of America, New York City. A recent article in the New York Post made this perfectly clear:

New York City’s method of assessing property values is so out of whack that the buyer of the most expensive apartment ever sold — a $100 million duplex overlooking Central Park — pays taxes as if the place were worth just $6.5 million.

With controversial tax breaks granted to the One57 condo tower, the total property tax bill for the spectacular penthouse is just $17,268, an effective rate of 0.017 percent of its sale price.

By contrast, the owner of a nearby condo at 224 E. 52nd St. that recently sold for $1.02 million is paying an effective rate of 2.38 percent, or $24,279, according to data compiled for The Post by the Revaluate.com real-estate information website.

Basically, everyone gets squeezed in favor of the super rich, i.e., feudalism.

The figures, which Revaluate CEO Max Galka called “unbelievable,” show that the owners of the city’s 10 most expensive apartments pay effective rates that are a mere fraction of those paid on less-pricey properties.

Beneficiaries of the discrepancy include casino magnate Steve Wynn, entertainment mogul David Geffen and Ekaterina Rybolovleva, the socialite daughter of Russian oligarch Dmitry Rybolovlev.

Galka said that while the city values apartments at about 20 percent of their actual worth, the top 10 are valued at between just 3 and 6.8 percent of their sales prices, generating just $935,000 in taxes this fiscal year.

If those apartments were taxed at the national effective rate of 1.29 percent of sale prices, the city would pocket nearly $9 million, Galka said.

In a prepared statement, de Blasio spokesman Wiley Norvell said: “These inequities have been built into the tax system over decades, and they won’t be solved easily or quickly.”

“Any solution would require tax-law changes in Albany, and the impact of those changes on the lives of New Yorkers would have to be taken into account,” Norvell added.

In other words, not only will this not change anytime soon, but it’s apparently not even on the table. So “liberal” of you Mayor de Blasio. Just another fraud politician.

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