Andrew Friedman

Taxing Coverage

Last week, Mayor Bloomberg and City Council Speaker Quinn announced New York City’s new budget to much fanfare. They received praise for finishing the budget early, and for an unusually amicable process. I was disappointed, though, that in a city where 20% of the people live in poverty the budget invested hundreds of millions of dollars in providing tax breaks for the most fortunate and well-heeled among us, property owners.

Beyond the disappointment, though, I was shocked at how the tax cuts were described in the press. The New York Times was representative in its coverage. Throughout its article on the budget, it referred to the tax cuts as an attempt to “offset soaring property assessments.” The article spoke at length about keeping property owners tax burden about the same as last year.

The article paid scant attention, though, to the fact that soaring property “assessments” actually represent soaring property value. There was no discussion about why property owners’ tax burden should stay the same as their property increases in value. I imagine we’d all be outraged if the budget proposed to keep income taxes flat for the highest earners, despite huge increases in earnings.

Nonetheless, the core issue that was discussed about the property tax cut was whether the owners of condos, coops, and different size buildings would experience a marginally higher or lower tax burden this year.

The press missed the point on this one. They did, though, do a detailed analysis of a red herring.

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Posted at 7:15 AM, Jun 18, 2007 in Economy
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