A-Rod's Big, Fat, Upper West Side Condo Tax Break

You know what rich people like? Staying rich! While it's unclear why exactly super-rich Yankees slugger and serial house hunter Alex Rodriguez finally decided to buy a $6 million place at the Rushmore condo, here's one factor that probably didn't hurt: The 421a tax break that will turn what could have been an annual $60,000+ tax bill into one that's just $1200 a year.

Daily News columnist Juan Gonzalez blasts the tax abatement program, "It grants as much as a 98% percent tax abatement for up to 25 years to condo owners in newly built housing. The bulk of the 421A benefit has gone to luxury housing in Manhattan, though a few reforms by City Hall and the Legislature in 2007 at least required developers to build 20% affordable housing to qualify for the tax abatement. This year alone, the 421A program will cost our city more than $900 million in lost revenues, the Independent Budget Office says. That's money that could prevent layoffs of firefighters and teachers. That could fund senior citizen centers and pay for after-school programs."

The 421a program was created in 1971, to spur real estate development at a low point in the city's real estate market (the NYU student website, PlaNYC.org, has a thorough history of the program), but it ended last December. Naturally, the real estate industry wants it reinstated (PDF).

In the meantime, it's unclear when the baseball fields, slated for public use, will be turned over by the Rushmore's developer.

Eliminating the income tax would mean that the prices on everything would go down. Substantially. So their money would go further.

So, I should not mind having been taxed at up to a 40% tax rate when I earned the money that I saved and then being taxed AGAIN at a 23% tax rate when I spend those same dollars that I saved because prices will drop like a rock.

Yeah, right. I'll buy that.

Here's the bottom line:

If you lived from paycheck to paycheck, spending like a drunken sailor, not saving a dime and being up to your eyeballs in debt, you will make out like a bandit as you will keep the stuff you bought on credit and then pay off the resulting debt with income tax-free dollars.

If you were frugal, lived debt-free and saved serious money, you will be royally screwed by being TAXED TWICE on your savings: Once when you earned it (at up to a 40% rate) and then taxed AGAIN when you spend your savings (at a 23% rate).

“So, I should not mind having been taxed at up to a 40% tax rate when I earned the money that I saved and then being taxed AGAIN at a 23% tax rate when I spend those same dollars that I saved because prices will drop like a rock.”

I don’t see how your math works when you eliminate income taxes. It costs money to hire and pay workers and when the workers take home all of their pay you don’t have to pay them and the government at the same time.

This means that the labour costs to produce goods go down, rather than up. Even with a flat tax, you’ll be paying less than you would to buy what you buy.

How do you explain your taxes going up 15 percent with a flat tax? I want to see your math.

How my math works ..... "when".....?

The way "my math" HAS worked is that, since the days when Richard Nixon was President, I earned money and the Government had a math equation that determined how much of my earned money the Government would take away from me AND ALREADY HAS taken away from me.

After busting my butt for four decades, my savings are substantial and that money has ALREADY been taxed.

There is no longer any "math" involved in the cold, hard fact that "That money has ALREADY been taxed."

It is not Rocket Science to understand "That money has ALREADY been taxed."

Doing away with the Income Tax this very minute does not change the fact that "That money has ALREADY been taxed."

Do you understand now? My entire life's savings, well into the seven figures, "has ALREADY been taxed."

Now, you want me to be taxed AGAIN when I spend my life's savings at a rate of 23% so that I can subsidize the Government AGAIN so that you can live your life at a much lower tax rate than I lived mine.

You want ME to be taxed TWICE on the same money (up to 40% when I earned it and then 23% when I spend it) so that the Government can afford to give YOU a much better deal (only 23% when you spend the money that was Income Tax-free).

Sorry, I am not playing that game.

That's just a game of "Robbing Peter to pay Paul" with you starring in the role of Paul.

As far as all the smoke and mirrors about "It costs money to hire and pay workers and when the workers take home all of their pay you don’t have to pay them and the government at the same time" .....

Fine. So you don't have to cut checks for the worker plus the U.S. Government plus the State (excise taxes) plus the City (B & O taxes). You get to skip writing one check and, instead you put that money into the worker's check.

That is not an earth-shaking economic savings.

The cheapest $400 computer with a 2.3GHz processor that you can now buy at Dell can, with blinding speed, do all those calculations for the entire company faster than you can pour yourself a cup of coffee and the have the computer printer print out the checks or make an electronic deposit.

In labor costs, the changes "saves" nothing.

But what about all the savings from not having Income Tax avccounting?

If you think that Income Taxes were an accounting pain in the butt for businessmen, wait until they have to collect a 23% surcharge on all their sales on behalf of the U.S. Government and then be responsible for the accounting of and the handling of all that money as well as dealing with the Government agents who will be asking them to prove that they did not steal any of it.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.