Cities like NYC are flipping from a 'race to the bottom' on taxes to attract business to a 'race to the top.' They are imposing higher taxes, like the 'pied-à-terre' fee, on wealthy out-of-towners and tourists who lack local voting power to oppose the new levies.

To combat social stratification, a progressive VAT could be levied on exclusive, private services like elite clubs, private schools, and private jets. The revenue would then be reinvested into public infrastructure like parks, libraries, and schools for the broader community.

Policies intended to curb luxury development, such as a construction freeze, have a counterintuitive effect. They transform the existing luxury housing stock into a limited, finite resource. This artificial scarcity dramatically drives up prices for those assets, making them 'gold' and potentially worsening inequality.

High-net-worth individuals are not abandoning major cities entirely. Instead, they are using technology to relocate their personal residency to low-tax states like Florida while their companies and teams remain in hubs like New York. This decouples their tax obligations from their economic activity, threatening the financial foundation of major cities.

To address the housing supply crisis, policymakers should index the capital gains tax exclusion for home sales to inflation. The current thresholds, unchanged since 1997, create a disincentive for long-term homeowners to sell. Adjusting the exclusion would incentivize downsizing, releasing existing housing stock onto the market for new buyers.

Billionaire wealth taxes are easily dodged by relocating. A more robust policy would tax capital gains based on the jurisdiction where the value was created, preventing billionaires from moving to a zero-tax state just before selling stock to avoid taxes.

A single high-end buyer like Ken Griffin, willing to overpay for a penthouse, can make an entire development project financially viable. Tax policies that deter these buyers risk halting new construction and reducing overall housing supply for everyone.

The proposed tax on non-primary residences targets buyers who can easily purchase elsewhere. This could trigger a massive drop in demand for high-end properties, negatively impacting the entire New York real estate market, not just the wealthy.

Unlike broad tax cuts, targeted fiscal policy can be revenue-neutral. Increasing the capital gains tax exemption for home sales could incentivize more transactions, unlocking housing inventory. The resulting economic activity could generate enough new tax revenue to offset the initial cost of the tax cut.