Mamdani heading towards raising property taxes

>> So it is reasonable to complain about increasing entitlement costs

Sure, complain away. But complainers could start with a semblance of sense on who’s paying for whom, where the inefficiencies lie, etc. Or not. Just vibe-complain based on whatever is frustrating you. It’s the American way.

Medical costs are higher because 1) doctors make too much money (for example in Europe doctors are not struggling but are not super high earners either) 2) the multi-payer system is so complex, we have too many people in administration to make it work.
Sure, drug prices are really high as we subsidize R&D for the entire world's benefit, but drugs are only a small fraction of overall healthcare costs, so don't affect the total as much as costs of services.

Some of the medicaid fraud is related to too many people on the program who don't qualify. A crazy number of people in NYC have "cash" jobs plus illegally collect govt benefits. Even agencies struggle finding candidates willing to work for a w-2. I've had success with college students on parent's insurance. Seems like inonada had success with someone who has insurance through husband. But these are exceptions as 99% of nannies in the city are on medicaid and work for cash which they don't report, and they earn significantly above medicaid cutoff, sometimes 6 figures.

So based on math above, my partner and I are supporting a few random poor people via taxes, plus our child (who is not in school yet, so all of the costs are on us, parents).

We submitted our DOE 3K application by the Friday deadline and I just found out our awful lottery number... it starts with an F and is 96.5th percentile number (so in the 3.5% percent of the worst possible numbers). Last year few people I spoke with in our district (District 2) who had 70th percentile numbers did not get in anywhere within the district. They got an offer in the Bronx (so DOE could claim that everyone got an offer).

We are paying so much into the system and looks like won't be able to get for our son even something that gov't claims is "universal" and available to all.

Fraud and inefficiency are two separate things. I was just pointing out that structural inefficiency in the US, relative to other countries, is what drives up the per-capita costs. The fraud you describe is, somewhat perversely, making it more efficient assuming the 65+ Medicare efficiency situation equally applies to Medicaid!

Another piece of amusement to note here. The people who employ cash nannies & housekeepers & whatnot are implicit accomplices in situation. They are not paying their share of the payroll taxes funding SS and Medicare / Medicaid for their employee, to say nothing of paying a lesser amount because it’s cash, nor providing healthcare coverage, etc. So it’s poetic justice that they collectively have to foot the bill anyways through their own higher taxes. The 99% of them, according to you, anyway.

I say this as an above-the-table payer who nevertheless pays for the Medicaid of a whole lot of random strangers. Not to mention the Obama-care subsidies of random strangers (~$500/mo per person on average according to Google), most amusingly those going to millionaire FIRE types scheming how to game ACA income thresholds for the next 25 years or whatever until Medicare kicks in.

If you employ cash workers and/or are a wealthy beneficiary of ACA subsidies, how broken is all that?

I don’t have much of a horse in this race, but if there are 19 countries all doing X to deliver equal healthcare at half the cost as 1 country doing Y…. Uh, maybe you should do X too?

It’s somewhere between entertaining and embarrassing that the country is wasting 7.5% of GDP on the obviously inefficient system Y because of bickering of various sorts, including considering of X a nonstarter.

>> We are paying so much into the system and looks like won't be able to get for our son even something that gov't claims is "universal" and available to all

Meh, you’re taking care of all those random strangers, right? What’s a few more nickels for your actual loved ones?

It’s not nickels, it is at least 40k of aftertax money a year just for the school day (but to cover my working hours need a nanny on top of that), and the promise was, we get the kid to 3K and then gov’t will help afterwards. Now I am looking up the stories from last year with a similar lottery number, and people did jot get in anywhere in the same borough! And I live next to a 3K center.

Some of these nannies make 150k cash (if watching multiple kids, working overtime, etc) and pay no taxes while collecting benefits. The real losers are people like me actually paying via w-2. From what I see enforcement of any rules is extremely limited.

In support of the point that boomers are squeezing younger people, here is a video that talks about relative spending. This is similar to manhattan rapidly graying fact I brought up earlier. So who has all the money? https://youtu.be/YJGR7p5gLDA?si=GKHp01KzYkMQRaHT

Old people have all the money. Always been, always will be. Wealth is wasted on the old, and youth is wasted on the young.

On the topic of how tough the highly upwardly mobile young Manhattanite has it these days, I think of the prototypical Big Law worker in their early 30’s who has saved just enough for their first apartment—where they’re going to sink essentially their entire net worth to get a toehold on a home that’ll be right-sized the next 10 or 20 years. Compared to 20 years ago, their income has doubled. But Manhattan RE is only up 16%. Is it all really that bad, is this the worst it’s ever been?

SS payments estimated to be reduced by 7% in 2032 followed by a further 28% reduction the following year.

Our economy is premised on the idea that the next generation will have more wealth (and, thereby, more tax and related revenues) than the prior generation, and disproportionately more so than the population growth, which funds the direct and indirect debts of the current generations. That model may well be broken with successive generations that do not have a fascination with wealth generation, and folks should brace for the idea that medicare and social security will be not be there when it is needed.

I feel like I'm missing something. For increased revenue, don't we need more immigrants? Regulated, prefereably, not the illegal variety.

Immigrants making more than $100-150k for enough number of years so that they can contribute enough to the tax base.

OK but they still contribute through payroll taxes (FICA), sales and excise taxes (consumption), state and local taxes (if they earn enough), property taxes (directly if they own, indirectly if they rent), business-related tax contributions if they work for a company or start their own. And their labor drives GDP and demand.

>>>Old people have all the money. Always been, always will be. Wealth is wasted on the old, and youth is wasted on the young.

That is actually not true. Majority of old people historically were very poor, mostly too poor to even afford retirement. Obviously, this has changed with the introduction of entitlements and pensions. Historically, working people that were the ones that were driving spending. The video I linked above shows that this trend flipped and consumption is now driven by retirees who are becoming the prime target for marketers.

Young people are now crushed by 1) out of control student loans 2) out of control housing costs 3) high childcare costs 4) it is really hard to get an entry level job right now

This has been a trend for a while:
https://business.time.com/2011/11/09/talk-about-old-money-old-folks-got-richer-young-people-much-poorer-over-the-years/

>>>Compared to 20 years ago, their income has doubled. But Manhattan RE is only up 16%. Is it all really that bad, is this the worst it’s ever been?

1) Big Law compensation famously increased more than other professions since then (there was a WSJ article comparing to bankers for example)
2) Brooklyn was a much cheaper option then, and people not working in Big Law (or working in Big Law), could opt for that. Now everything is overpriced
3) Property taxes and maintenance costs have increased a lot faster than incomes or inflation since them; student loans increased; childcare costs increased
4) Funny to be making a comparison to near peak housing bubble

>>> So it’s poetic justice that they collectively have to foot the bill anyways through their own higher taxes. The 99% of them, according to you, anyway.

The injustice is that I also foot this bill even though I am paying payroll taxes, etc

>> The video I linked above shows that this trend flipped and consumption is now driven by retirees who are becoming the prime target for marketers.

The video you linked was some guy blathering for 30 minutes. There was a single chart shown 5 minutes in, and he failed to even recognize demographic changes as a potential factor.

It’s not that I don’t believe this could be a thing. It’s just that you have not actually provided relevant stats from credible sources. You said the same thing about wealth, and my cursory look at data aseembled by the Fed’s countless economists showed that per-capita wealth, as a fraction of GDP per capita, has remained unchanged across 2 generations. You then made a claim about the value of entitlements, which a cursory look at SS payments as a fraction of GDP per capita debunks (not to mention what even a cursory understanding of COLA adjustments would imply.)

Then this from a journalist who lacks basic economic sense:

>> Using government data, the study notes that the median net worth for individuals ages 65 and up stood at $170,494 in 2009, compared to $120,457 in 1984 (all figures are in 2010 dollars to account for inflation).

So a 42% increase when GDP grew 56%? That’s (slightly) behind on the relevant metric, not a sign of abnormal increase.

>> Funny to be making a comparison to near peak housing bubble

My point was that there is always something in the economy that one can point at to say “This is so unfair!” So yeah, I kinda needed to pick a particularly extreme point where the item was occupying a top spot in the public narrative.

In my experience, spending all your mental energy on such things not only makes you crabby, but it also makes you miss the opportunities hiding in plain sight because you’ve let X suck up all the oxygen in the room.

Just my opinion, might not match your experience.

>>>The Spending Gap: The U.S. spends roughly 2.0 times more per capita on adults 65+ than the average of other high-income countries ($24,665 vs. $12,309). In contrast, the gap for working-age adults (20–64) is wider, with the U.S. spending 2.3 times more than peer nations.

Do the working age adults consume more or pay more? Because I saw a lot of studies saying private insurance pays 2x to 2.5x for the exact same thing than Medicare. Hospitals and doctors overcharge private insurance to subsidize Medicaid and Medicare patients.

I think when looking at conventional measurements in dollars, one needs to be careful not to always equate dollars with value or fair entitlement.

Doctors doing the same thing are compensated very differently here and in Europe. Same value to society, different outcome for their bank accounts. New York teachers that were hired few decades ago got much sweeter pension deal than the teachers from current generation who need to contribute more and work longer. Same job, same place, different deal.

I live in the same building as other families with little ones. Our 3K lottery number is so bad, theirs is almost definitely better. They will get into the nearby 3K center and we will not. And nothing I can do about it. (Excuse my grieving about this situation right now. I walk by this center almost daily and see it from my window. It is closer to me than the zoned elementary school. I do not think lottery is a reasonable way to distribute basic school seats for 2-3 year olds and their parents as it is fundamentally unfair AND makes it very hard to plan).

You should be frustrated. Not because you pay for it in taxes, nor because your neighbors didn’t get unlucky. But rather because of the ineptitude of the program. It takes a certain level of incompetence in leadership to put together a 3K program where the schools ain’t where the kids are, and to have that continue for years.

This is what happens when people vibe-elect their leadership based on “I like what he has to say”. Never would have happened with Bloomberg. But look what happened with Bloomberg when he tried running for president. Sign of the times.

(With all due respect to American Samoa, where Bloomberg won the primary in 2020.)

>>>You should be frustrated. Not because you pay for it in taxes, nor because your neighbors didn’t get unlucky. But rather because of the ineptitude of the program

I agree with that. And the whole set up of lotteries and uncertainties and submitting applications in January and then waiting for months and not knowing which school if any you got into until the last moment seems to be a really nerve-wrecking feature of NYC DOE. And could definitely be improved.

>>>Sign of the times.

what do you think is different between current times and previous times?

People are more cynical. Politically, financially, medically. Why now? I’m not sure. These things go in decades-long waves, I think, and shift back (I hope!).

nyc_sport>> That model may well be broken with successive generations that do not have a fascination with wealth

Are you saying the current younger generations don’t have a fascination with wealth? I don’t really see it that way and would say the opposite, if anything.

Nada, Without having the concrete data to back it up, politics seems to be driven by wealth concentration, manufacturing type job losses in many areas and grievances. Wealth concentation and grievances driving Mamdani's spending and tax proposals.

To add to that, are we really a rich country with so much national debt and deficits. Just try to wipe out the national debt by taking top x% of total wealth more than $10mm. That iwill point to spending out of control. But no one wants to cut spending as that is political suicide.

>>>Never would have happened with Bloomberg.

I really liked mayor Bloomberg. But he hiked New York City property taxes. And his city did not provide a free 3k program.

There were a few 3K centers in popular areas that were built (money spent!) during prior administrations but never became operational due to budget constraints. Mamdani just opened at least one such center on E65th street. I have it on my list (won't get it since my lottery number is so, so bad, but maybe off the waitlist).

>> Nada, Without having the concrete data to back it up, politics seems to be driven by wealth concentration, manufacturing type job losses in many areas and grievances.

Yeah, I’ve heard that before from various talking heads. It goes beyond politics. Just senseless ignorance of various sorts, usually not to one’s benefit. I ran across this article this morning:

https://www.wsj.com/finance/investing/the-tax-nerd-who-bet-his-life-savings-against-doge-6b59eda2?st=pvGUmN&reflink=desktopwebshare_permalink

The people on the other side of that bet had the magic combination of incompetence in assessing an obvious situation yet were confident enough in their complete misassessment to lay odds.

Thanks. Good article.

What is your take on this? What top percentile do we need to wipe out?
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To add to that, are we really a rich country with so much national debt and deficits. Just try to wipe out the national debt by taking top x% of total wealth more than $10mm. That will point to spending out of control. But no one wants to cut spending as that is political suicide.

>> I really liked mayor Bloomberg. But he hiked New York City property taxes. And his city did not provide a free 3k program.

The point I was making was that when Bloomberg set out to get something done, he’d get it done and done right. He wasn’t big on blabbing on about it.

Since then, I’ve heard a lot of hoopla about 3K. I heard it a few years ago, I still hear it touted now. So successful that it is time to move onto 2K! Bloomberg didn’t have a 2K, tsk tk.

Now I’m not sure if you’re aware, but you don’t actually have a free 3K program. We’ll see if you actually have a free pre-K program next year, I suppose.

Sorry to pile onto your anxiety, but this pisses me off. If you want to take money from me to deliver X for the benefit of 3 year olds, go for it. But for fuck’s sake, actually deliver. Take more if you need, but actually deliver. It’s called “ 3-K for All”, not “ 3-K for All Except Those Unfortunate Toddlers Whose Deadbeat Parents Are Unwilling to Commute an Extra 2 Hours Each Day To Make Use of This Wonderful Program That Allows Them to Have Time to Work”.

It’s like the Dept of Sanitation picking up garbage from two out of every three buildings on each block. The rest can drop off their garbage on available blocks in the Bronx. Sanitation solved!

>> What is your take on this? What top percentile do we need to wipe out?

What do you mean? Zero-ing the national debt (ignoring the further deficits) by taking all-ish of the wealth from the top X% of richest people?

National debt is $38T. The same website I linked earlier has the answer:

https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/table/

$54T of wealth in the hands of the top 1%. I’m guessing you can get to $38T by dropping them to $10M each. It’s a bit cruel, though, as $10M is the new $5M. And as everyone knows, that’s a nightmare:

https://m.youtube.com/watch?v=m0sRrsara9c

Politicians get votes for promising it. A big chunk of voters don't pay much taxes so they vote for more benefits which are 2x the cost due to inefficiency and they don't work well. Yes many European countries have free day-care but they don't make $300-$500k either in a banking job.

Even Bloomberg couldn't run DOE as efficiently as he wanted to due to teacher's union bosses and administrators but he was very good.

The rest of the country does fine without 3k. What is so special about NYC? Couples balance how much their jobs pays vs cost of childcare and time spent with their family. Two busy jobs means 70 hours a week nanny. Cost of doing business and choice of jobs.

I don't think any politician or DOE cares about bankers / private practice lawyers. In my opinion, whole goal of 3k is to provide parenting to kids whose parents aren't educated or incompetent - essentially give poor kids a little more opportunity (at some ridiculous cost).

Yes many European countries have free day-care but they don't make $300-$500k either in a banking job.

------
Since then, I’ve heard a lot of hoopla about 3K. I heard it a few years ago, I still hear it touted now. So successful that it is time to move onto 2K! Bloomberg didn’t have a 2K, tsk tk.

BTW, it is the same DOE and set of parents where many high-schoolers can't perform at 6th grade level. So keep throwing good money at an organization and set of parents who don't have enough to show for existing resources.

People can draw different conclusions depending on their political views. https://www.ibo.nyc.gov/content/publications/achievement-grades-3-8-tps

>> Politicians get votes for promising it.

Promising is fine if you can deliver. People are voting for politicians that promise what they know cannot be delivered. This is the cynicism I’m talking about. When a politician promises something they cannot possibly achieve, people don’t care—even if they know it and/or are told repeatedly. I am reminded of the cab driver Mamdani voter who told my wife he understood that Mamdani can’t do most of the stuff he was promising. But instead of considering that a disqualifying characteristic despite a slate of other candidates, he went with Mamdani.

Same thing at the national level. Trump promised 4-6% GDP growth in 2016 and an elimination of the national debt in 8 years. With fealty from both houses of Congress, he achieve 2.2% GDP growth and a 50% increase to the national debt. When he was running in 2024, he spewed similar nonsense.

I recall my housekeeper saying that some people she knew were voting for him because of the economy. She was like “WTF are you talking about? No one in Washington is going to do anything meaningful to you while you sit around. You’ve gotta make your own economy.”

So it’s a cycle of BS spewed to cynics, a failure to deliver said BS, and then the cynics blame the world when BS doesn’t happen.

There is something amusing about the topic of this thread. Mamdani promises some BA he has now power over (increase income taxes on the rich) to voters who are predominantly non-rich and then turns the tax guns towards the non-rich.

I don’t own, so I don’t actually pay any property tax. The tax on my home is pretty ridiculously high as it is. Nevertheless, if there is a 10% increase and market forces make it somehow 100% passable to me (which I am skeptical of), the amount is a drop in the bucket relative to the originally proposed income taxes increase.

And FWIW, I don’t particularly care about the proposed income tax increase either. I’ve long understood the trajectory of profligacy that comes alongside the cynicism and have planned accordingly.

>> Politicians get votes for promising it.
>>Promising is fine if you can deliver.

I don't think he was elected for promising any specific thing. I think he was approachable and charismatic, represented change, and focused on the right pain points. People felt seen and heard on affordability issues.

>>The rest of the country does fine without 3k.

Really?

>>What is so special about NYC?

One of the highest costs of living in the country and a city with a lot of inequality (which means a good chunk of people are not well off). Childcare / early education is a temporary issue for parents, but serious enough to push people out of the city or moms out of jobs. Not everyone works in finance or Big Law.

As % of income childcare costs are highest in NY vs other states, based on numerous data sources. Here is one:
https://wallethub.com/edu/child-care-costs-by-state/151929

New Mexico is second on that list and they just introduced universal childcare.
https://sourcenm.com/briefs/nm-senate-passes-bill-to-pay-for-universal-child-care/

>>> Take more if you need, but actually deliver.

They have enough seats, but not in the right locations, and that's dumb and infuriating in itself

However, I separately am infuriated about this lottery system for 3K. I get the complex school choice system at middle school and high school level. There are vocational high schools, arts high schools, language focused, high school for the deaf. etc and its great to have all these choices. But 3Ks are actually all almost exactly the same. Same curriculum and set up in every single place. The only variable is the location, and that is the most important variable for a toddler. Elementary schools are in similar boat and are zoned to an address. But 3Ks are not zoned, and the admission process is unnecessarily complicated; 97% of people from downtown or UES or anywhere in District 2 have a priority over us for our neighborhood 3K center just because they have a better lottery number. I will wait months for a placement and then have to play the waitlist game all summer to maybe get in somewhere. The entire time I won't know what the plan is and possibly will need to put in a non-refundable deposit into a private school/daycare just to have a spot come September if nothing works out in public 3K. (I think it was 300 mercer who predicted years ago that the system will try hard to push us into private)

Separately, the system is so complex its like you need a PhD to decipher and navigate. For example, according to myschools website, at our neighborhood center (which we ranked #1), 147 people applied last year and 90 were admitted, based on a lottery number. The 147 applicants allegedly represents only people that ranked this center AND did not get into any school that was higher on their list. Statistically speaking, we will be ranked somewhere 140-147 in the list of applicants given our 97th percentile number and likely have no shot, but we don't know the lottery number distribution among 147 applicants, which could be different form the general population since the list of 147 represents people not admitted higher on their list. What could be more predictive is the cutoff lottery number. DOE repeatedly has refused to provide this information.

One PhD wrote a paper on it, where she documented DOE ridiculous refusals to provide relevant information to the public. Leading me to believe they are hiding something. Probably incompetence.
https://par.nsf.gov/servlets/purl/10437955

Sorry Krolik. DOE administration is massively incompetent and union and ideological driven. Efficienty is not their priority. No one can break it. Charters are little bit of a relief valve. On top of that include parents who don't have their act together. So you gotta suck it up, pay your taxes and expect less in return.

For anyone with both parents working more than 55 hours per week, choices are limited to nannies. Schools close too many days a year and the school day is short. What the f is 2.5 months long summer vacation? It doesn't work with both parents working but no one is going to change this nationwide custom. Most private schools do have a choice for 8-6pm if you pay extra. But they are also closed many days a year. In fact, they follow DOE schedule more or less.

>> 97% of people from downtown or UES or anywhere in District 2 have a priority over us for our neighborhood 3K center just because they have a better lottery number

And I bet you are conveniently nearby their office commute for a good number of them, making yours a nice backup choice. Or #1, if you want to maximize the time between dropping of little Johnny and getting to work.

What a nice, well-conceived design!

https://open.substack.com/pub/matthewyglesias/p/is-a-new-teacher-better-off-in-mississippi?utm_campaign=post-expanded-share&utm_medium=web

Yglesias’s basic argument is that spending more on schools — especially on teacher salaries — doesn’t automatically mean better results. New York spends more per pupil than any other state and pays some of the highest average teacher salaries in the country. But when you look at adjusted NAEP scores, the results are good, not bad — just not dramatically better than places like Mississippi or Louisiana, which spend a lot less and have recently improved a lot.

He also points out that once you factor in New York’s housing costs and tax burden, the pay advantage for new teachers isn’t that impressive. Entry-level salaries are only a bit higher than in lower-cost states, and most of the big money in New York is backloaded into later career pay and pensions. That’s great for veterans, but it doesn’t necessarily help recruit new talent.

On top of that, teachers don’t move between states much anyway. Pension rules make mid-career moves costly, and certification rules don’t help. New York is actually one of only three states that hasn’t signed the interstate teacher certification agreement, which makes it harder for out-of-state teachers to transfer in. So even though New York pays more on paper, it’s not especially easy to attract outside talent.

He also brings up the politics of this. Zohran Mamdani voted in the state legislature for a class-size reduction mandate that will end up costing NYC hundreds of millions per year — over a billion annually once fully phased in. Now as mayor, he’s dealing with the budget squeeze that comes with that. It’s a good example of how it’s often easier to vote for higher spending than to manage the fiscal consequences later.

The bigger theme is tax skepticism. In a high-tax state like New York, people are understandably asking: if we’re already spending more than anyone else, why aren’t the outcomes clearly better? Yglesias isn’t saying “spend less” across the board — he’s saying that if you want to justify high (or higher) taxes, you have to show that the money is being used in ways that actually move the needle.