The Other McCain

"One should either write ruthlessly what one believes to be the truth, or else shut up." — Arthur Koestler

Panic in the Hamptons: Tax-Hike Talk Inspires ‘Fire Sale’ on Mansions

Posted on | December 5, 2012 | 18 Comments

Static calculation meets dynamic reaction:

Hamptons homeowners have launched a selling spree, offering fire sale prices to get rid of their properties before higher capital gains tax rates are expected to kick in Jan. 1.
Top brokers expect more than 30 closings on big-ticket properties priced from $1 million to $25 million.
“There is a frenzy here right now,” said Enzo Morabito, a long-time Hamptons-based broker with Douglas Elliman. “People know they save money if they sell now. I have very willing sellers and hot buyers who want to take advantage of the low interest rates that might go away next year as well.”Morabito reported eight closings on transactions involving his team before New Year’s Day, including a $14.9 million estate in Water Mill and a $6.9 million mega-mansion in Bridgehampton.
“They know they lose money if they wait till next year,” he said.
Capital gains taxes are expected to rise during negotiations over the so-called “fiscal cliff” as lawmakers close a yawning budget gap. The rate may rise as high as 39% on short-term investments, but is expected to jump about 5% on long-term gains.

Some people are so stupid (we call them “Democrats”) as to think that their soak-the-rich tax plans are aiming at fixed targets. However, tax policy provides incentives for action, and the desire of the rich to protect their assets and income against exorbitant taxation will inevitably result in action that falsifies any “rosy scenario” projection of how much revenue could be gained by such measures. There are always unintended consequences to liberal policies that counteract (and often completely negate) whatever positive results are achieved.

Democrats like to talk about the need for government “investments” in infrastructure. Too often, this consists of paving a road with good intentions, without regard for the proverbial destination.

 

Category: Economics, Taxes

Comments

18 Responses to “Panic in the Hamptons: Tax-Hike Talk Inspires ‘Fire Sale’ on Mansions”

  1. smitty
    December 5th, 2012 @ 11:21 am

    The economic beatings will continue until voter wisdom improves.

  2. Red
    December 5th, 2012 @ 11:26 am

    I say let America enjoy it’s swan dive from the fiscal cliff. I won’t be sitting back and listening to the cries of shock and awe at all this phony buyers remorse. I will point and laugh while taking care of my own family’s needs by any means necessary. Let Dems eat cake.

  3. Evi L. Bloggerlady
    December 5th, 2012 @ 11:52 am

    But it is good to be King!

  4. rjacobse
    December 5th, 2012 @ 12:38 pm

    “Static calculation meets dynamic reaction”
    OR
    “Stupid is as stupd does.”

  5. New York Senators Will Sell Out Constituents To Please Obama | The Lonely Conservative
    December 5th, 2012 @ 1:33 pm

    […] to jump about 5% on long-term gains. (Read More)Will those millionaires move to another state? (Via The Other McCain) What will that do to New York’s budget?The New York Post highlighted some of the dire […]

  6. JeffS
    December 5th, 2012 @ 1:49 pm

    Hell, let the ‘Rats eat Twinkies. Imported from Canada.

  7. Christopher Blake Carlton
    December 5th, 2012 @ 2:01 pm

    The first rule of economics is scarcity. The first rule of poltics is to ignore the first rule of economics. T Sowell.

  8. Adobe_Walls
    December 5th, 2012 @ 2:13 pm

    Let’em eat shit and die would be the preferred outcome.

  9. Christopher Blake Carlton
    December 5th, 2012 @ 3:01 pm

    The problem is, they won’t let us eat cake. Might make us fat. The new mantra from Michelle is “Let them eat kale”

  10. Cube
    December 5th, 2012 @ 3:39 pm

    People change their behavior in reaction to price changes. This is as true of the price of government as of anything else. Politicians ALWAYS assume the public will not react to their changing of incentives and the public NEVER cooperates with the rosy assumptions. That’s why tax increases never bring in the expected revenue. But the politicians are “Smarter than you ™” so they’re never wrong. Until they are. Again. But they never learn.

  11. WJJ Hoge
    December 5th, 2012 @ 5:09 pm

    One wonders when/if some of these folks will notice that their beneficent masters are carrying them down that road in a hand basket.

  12. McGehee
    December 5th, 2012 @ 5:45 pm

    Reminds me of this one:

    Scientific Method: Change one thing and observe the result.

    Political Method: Change everything and blame your predecessor.

  13. Bob Belvedere
    December 5th, 2012 @ 5:51 pm

    Indeed.

  14. Bob Belvedere
    December 5th, 2012 @ 5:53 pm

    Sorry, Evi: I won’t read or consider anything that Dhimmi Norquist produces.

  15. Bob Belvedere
    December 5th, 2012 @ 5:54 pm

    The Beautiful People will make out just fine as long as they support the Left.

  16. Adjoran
    December 5th, 2012 @ 10:41 pm

    Any tax on capital gains is counter-productive and costs growth, jobs, and ultimately tax revenue.

    When an investor might realize their gain and put their money into a new and more productive investment, they have to factor in the tax burden of getting out of the original purchase. This distorts the decision-making process arbitrarily.

    Since economic growth and wealth creation are directly tied to longevity, health, and environmental stewardship, stunting growth costs lives.

    Bloody Obama.

  17. Bob Belvedere
    December 6th, 2012 @ 8:07 am

    If a some have to die in order for the Eschaton to Immanentized, well then, so be it, comrade.

  18. Red
    December 9th, 2012 @ 10:54 am

    They are fodder for Morlocks.