Tax Guru-Ker$tetter Letter

Monday, October 21, 2002

What Will the Results Be?

The administration of liberal RINO New York City Mayor Michael Bloomberg has plans to raise property tax rates by either 10% or 25%. Their goal is to squeeze a few billion dollars more per year out of property owners. Doing something that politicians never do, I wonder about the long term consequences of this action. What do you think this will do for property values, as people sell off their real estate and move their investments elsewhere?

Property values only stay high or increase if there are willing buyers. On a purely economic scale, raising the taxes on a business or commercial property decreases its capitalized value right off the bat. The cycle will then continue as the lower market values cause reduced assessed valuations, causing lesser tax assessments, and so on. Of course, this is too much forward thinking for the likes of politicians intent on the short-term feeding of their pet bureaucratic projects.

KMK
- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 10/21/2002 10:00:00 PM Send this post: