Tax Cuts in NYC; Expect Tax Rev Boost

OK, here's another test of our favorite Supply Side concept, the Laffer Curve. NYC's mayor just announced a 5% cut in property taxes, and elimination of a special sales tax on cloths and shoes. This NYT article of course portrays this move as something that the city can afford because it has earned a surplus due to a very strong NYC economy. Will this writer be surprised when these moves result in INCREASED tax revs from real estate and clothing sales?

But isn't NYC real estate having some problems? The decrease in property taxe rates will... increase the value of NYC real estate! And what happens property values increase? Only supply siders seem to know (or, perhaps, the only people who know become supply siders). I wonder if NYC clothing sales are having a problem. Reducing sales tax should boost sales, no?

No comments: