Monday, June 08, 2009

Tax and Rend-In all Five Boroughs

In Saturday's NY Post, the Manhattan Institute's Hope Cohen underscores the deleterious impact of the city's property tax on New York business: "If the city eases the burden on busi- nesses, fewer . . . will fold. New York City needs desperately to over haul its irrational property-taxation system now -- so as to stop feeding the vicious cycle of the economic downturn. To give homeowners a break, businesses have been carrying a disproportionate share of the city's real-property tax burden -- they pay 41 percent of the total collected, even though the real estate they occupy represents just 22 percent of the city's market value."

Of course, property taxes are just one of the nails in the coffin of the city's struggling small retailers-burdened as they are by an array of taxes and useless regulations. And the results are manifest: "When times are good, business suffers in silence, but when things hit the skids, the property tax can make a life-or-death difference. Just look around the city: Businesses are disappearing from every neighborhood."

So what Hope do we have? "New York must stop discouraging business investment. It needs to figure out how to restructure the property tax to treat residents and businesses fairly, in good times and bad." But, is that all? We think not. However, it would be a good first step towards making the city a bit less hostile to the entrepreneurship it desperately needs now that Wall Street is no longer the robust piñata that it once was.

And while we're at it, did you notice that in the five borough economic hoax that Mike Bloomberg is purveying in his third term coronation effort, there is no mention of lowering taxes or reducing the regulatory burden? Or anything substantive, for that matter-something that City Hall highlights: "The Bloomberg administration says the plan in its current form was developed as a response to the collapse of the financial markets and the economic downturn last year. But for all the promotion, there is no plan per se, and certainly not one as comprehensive as the graph- and chart-heavy 127-initiative PlaNYC. Instead, according to the administration, the five-borough plan is a vague, overarching system that includes all the economic development policies started or about to be started."

And, as we have also pointed out, there's a bit of Yogi Berra's déjà vu all over again here: "If New Yorkers thought the phrase rang a few bells, they were right. During the 2001 mayoral campaign, a much darker-haired Bloomberg appeared in several television ads talking about a “five-borough plan” to help New York rebuild and recover from the Sept. 11 terrorist attacks. Four years later in the 2005 campaign, there was another election and another ad touting the five-borough plan."

Freddy Ferrar captures the same old, same old quality here; and, if so, where's the resonance to keeping the same guy in office for another term? "Ferrer added that the fact that Bloomberg has been pushing his plan for the past eight years undercuts his central argument for extending term limits and running for re-election: that he is the only one who can steer the city through the worst economic crisis since the Great Depression."

City Hall also questions the middle class mantra-underscoring how taxes are hurting these folks: "But some critics say Bloomberg’s policies are hurting the middle class. They point to the fact that property taxes have gone up 18 percent since the mayor took office, and to his proposal to raise the sales tax by half a percentage point to balance the budget. These are not the policies of a mayor who understands the middle class, they say."

And who might one of these critics be? “I call it ‘The Five-Borough Bunko Plan,’” said Richard Lipsky, lobbyist for the Neighborhood Retail Association, who successfully blocked efforts to build big-box stores like Wall-Mart in New York. He added: “Purely smoke and mirrors.”

So we have a reasonable call for lowering the property tax burden on local business juxtaposed to an economic plan that pointedly ignores the way in which taxes and over regulation strangles business growth. But the acolytes and toadies continue to shill for the Indispensable One. We'll give one the last word-but make sure this is subject to a saliva test, along with the proverbial grain of salt:

"Bloomberg supporters say the “plan” should be viewed as an umbrella term for all the mayor’s efforts to spur economic growth in the city over his time in office so far, with the addition of some new proposals to respond to the current crisis.“It’s really a summary of various initiatives that the city is undertaking to continue and expand on policies that have been put in place by the Bloomberg administration to diversify our economy, to expand our focus on entrepreneurial sectors and small business growth and development,” said Kathryn Wylde, president and CEO of the Partnership for New York City."