New York’s economy is doing so well that Mayor Michael Bloomberg has reportedly decided to cut some taxes. Namely, he will eliminate the city’s portion of the sales tax (resulting in 4.375% tax instead of 8.375%) on all clothing purchases. He has also decided to provide (at least for this year) a 5% decrease in property taxes that will amount to about $322 per year for a condo owner and $160 per year for owner’s of single family homes.
After his painful property tax increase of 18.5% in his first term, this seems like small beans to me.
Now I understand that a $750 million influx of cash from property owners will further stimulate our economy but for most individual property owners, this “rebate” isn’t going to affect anyone’s bottom line. It just seems like $750 million would be better invested in schools or our stressed transportation system.
Nevertheless, the reason for this tax cut is because the perception of the local economy is that it is doing exceedingly well. No argument here, but heck, according to this article, city officials are suggesting that the city’s property values increased by 19% last year. From where in the world did this number come? Perhaps one of my economist readers could elucidate because I just don’t see that. Jonathan Miller, where are you?