10 Ways close the Coronavirus budget gap in New York

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1) Legalize all the vices. Quarantine brought us some relief on alcohol takeout in order to give local restaurants something else to sell—but that doesn’t nearly go far enough. Not every attempt to fill the city’s budget needs to come from increasing the taxes on things we already tax. The easiest new source of revenue for the city would be areas where there’s already lots of illegal economic activity that doesn’t get taxed at all, but where legalization would actually bring regulation and improvements—namely, vices.

Marijuana is an easy one. It’s already being mass-consumed tax-free. It’s been decriminalized in several ways. Now it’s time to run this thing into the end zone—and while we’re at it, throw away all of the previous convictions and records that go with it. That would save us money on incarceration on top of a windfall tax on sales.

Sports gambling is another easy one. New Jersey already allows it. Let’s stop PATH train riders hopping over to Jersey City to place their bets and let them keep their money and their taxes on our side of the river.

Sex work is one that fewer people might support—but over and above the tax potential, there’s a moral argument to be made here as well. Regardless of your opinion of it, sex work is a source of income for many people in NYC, especially immigrant populations. By keeping it illegal, it prevents those in the industry from coming forward when they are victims of abuse. Regulating it and giving these people proper worker protections would improve their working conditions and make it easier for those who desire to leave the industry to escape cycles of abuse.

Outside of that, if two consenting adults free of any coercion want to engage in a financial transaction, and taking a cut means less of a tax increase for you personally—how hard do you really want to argue against it?

I mean, if two boxers can make a living beating each other to a bloody pulp in front of an audience and we don’t mind collecting those tax revenues, we’re being a bit hypocritical to be so high horse about this being a sanctioned part of the economic system.

2) Cut the police budget. The NYC Council is calling for a $1 billion budget cut—asking the force not to respond to every last cat up a tree with two armed officers making, on average, $90,000 each. We all have to make due with less—and this is basically the increase in budget during the Mayor’s administration. Let’s not replace the retiring cops leaving via attrition and instead take that money to invest in social services and housing stability that have been shown to prevent crime.

3) End the stock transfer tax rebate. You may not realize this, but Wall St. firms are on the hook a sales tax when they sell you a stock—only it gets 100% refunded to them. Due to some archaic bond offering rules, the tax actually gets collected, but then it gets sent right back to brokers. The state began rebating the tax in 1979 (at 30%), 1980 (at 60%) and in 1981 (at 100%). It is estimated that eliminating this tax would erase the entire budget deficit, and also cut down on high frequency trading, which can impact volatility in the market.

4) We need to push the Federal Government to close the carried-interest tax loophole—but we should do it in such a way where the localities where it gets collected get a share of the income from it. There’s no reason for private equity managers, hedge fund investors or VCs to pay less taxes as a percentage than teachers. Fred Wilson agrees. Closing the carried interest tax loophole is something Trump said he was going to do when he campaigned. It will mostly piss off people in states he doesn’t win anyway—NY, CA, and MA. Plus, he could say that he went after the rich in other ways as a defense of his tax plan and general bent towards grifting for his friends.

If New York politicians push for it, perhaps we could see some of the benefit disproportionally accrue back to us.

5) Tax the empty luxury residences that are just used as stores of money and high-end pied-a-tierres. If you’re not paying NYC taxes b/c you’re a resident less than half the year, but you own property here that you’re not renting, then you should have to pay at least something extra rather than able to fully avoid taxes by being domiciled in another state. There should be an extra penalty for taking up a lot of extra space and not being here those days to economically and socially contribute.

6) Charge for parking—everywhere. Cars get a ton of NYC real estate for free—why? Give hospital workers free parking passes and people below a certain income who can show they need a car for work, but if you’ve got a weekend car for Vermont skiing, then you can chip in for a permit. It could still be less than a garage and it would help monetize all that space.

7) Promote the filling of empty storefronts. When local stores close, and people shop online, money drains out of the city into the hands of non-local companies. We should find more ways to allow small local businesses get started and thrive. For example, anyone should be able to get a lease on a storefront that has been vacant for more than a year for a set percentage of sales without a costly down payment—with a right of first refusal if the landlord can find a higher paying tenant after that. If you’re holding on to empty space and someone makes a qualified offer to start a local business in the space, cutting you in for a reasonable percent of the revenue, you shouldn’t be allowed to turn them down.

It would be incremental earnings for the landlord, more sales tax and payroll tax for a new business—and less people out of work.

8) Bank the underbanked. There shouldn’t be any Checks Cashed places in NYC. They’re one of many ways that it’s expensive to be poor. You should be able to cash a check at any ATM in the city and deposit it in a no fee, no minimum account. If banks don’t want to offer it, the city could get into that business. The city doesn’t have to deal with customer acquisition costs in the same way—all of its press conferences come free. Why not have a City Government run bank or financial institution that could bring financial services to everyone?

The city might be in a position to do this profitably—no marketing costs and no additional real estate overhead given how many local city offices there are. It’s a dream advantage for a startup.

9) Open the streets and vacant lots to business. We’re letting restaurants create outdoor cafes. Let’s go a step further and start closing off streets, replacing them with more open air businesses that generate sales tax—especially in the summertime.

10) Tax the noise. Unnecessary honking, and cars and motorcycles tuned to purposely create loud exhaust are a blight on the city. Cops never ticket for them, so why not let acoustic cameras do the work the same way speed cameras do? Getting a speeding ticket with a camera is super annoying—the first time. After that, when you know where the camera is, you slow down. It works and the tech is out there to do the same with unnecessary noise.