On Occupy – Taxes – and Commecial Real Estate

Posted on 10/16/11 in Business, Politics, Taxes, No Comments

Reading the sunday papers about a  Dem frustrated with Obama (written by a bright ex Canadian) got me thinking.  If  I could pass on one thing to big wall street execs (like him) what would I say?  I’m not the only person asking questions of Wall Street but I read the Sunday Papers.

Three things caught my eye in the article:
a) Why occupy wall street is protesting in exactly the right place.
b) What the USA (and Canada) really needs in the tax reform.
c) One route to success in commercial real estate.

So with regard to Occupy, here is the quote that really caught my eye, “… business leaders are pleading for some kind of adult supervision in Washington…”  How patronizing is that!  Lets face it, any demographic is gong to have it’s flaws.  To point at someone elses flaws without acknowledging and solving your own is a disgrace.  Yes, politicians in Washington hold their power by acquiessing to anyone willing to ‘donate’ so they can hold their power.  But how about Wall Street, how far do they reach and stretch society so they can put a few extra dollar bills in their pockets… not letting anyone off the hook, I’m sure you’ll find the Olympic sailing community is over leaveraged in terms of exersize and sun intake, and the snowmobile community may be a tad less environmentally friendly that ideal…  so there, we all have flaws… don’t argue yours are less viscious than someone elses without first trying to clean things up a bit.

Big banking and ‘Wall Street’ don’t understand that the benefit of their contributions to the economy (capital rasing, liquidity) aren’t necessarily of so much value to the economy that it justifies the gambling risks they create and cut they take.  Business as usual is what they are looking for, so occupy should stay on Wall Street until there is a genuine rethink of the space banking should fill in a market economy.

And now on to the highlight of the article, a clear articulation of the true goal of tax reform.  With Cains 9-9-9 plan making waves this news cycle, everyone is chiming in.  I’ve been attracted to ‘flat taxes’ but Zuckermans comment and an article on 9-9-9 have cleared things up.  The benefit of a flat tax is only really becuase it is flat.  The greatest benefit is that it is “a reform that closes loopholes and reduces compliance costs will stimulate both business and consumer spending”  The NYtimes blogger, Holley Ulbrich, chimes in with, “Progressive rates don’t make it any harder to file. That’s why the I.R.S. provides tax tables.”   

What is difficult(costly) and a huge drag on the economy is working out all the deductions, special cases, favored programs… so it is easily psosbile to have a simple tax code without resorting to the regressive effects of a flat tax.  The real savings for the economy on taxes is to remove all of the incentives/loopholes so that the economy isnt’ distorted and people don’t have to spend their hard earned money on lawyers and accountants to pay taxes or start businesses.

The final piece I noticed was his business dicypline of Zuckerman.  “We’ve had a strategy in our business of trying to have ‘A’ assets in ‘A’ locations. I think we had 126 buildings at that point and we came to the conclusion that 16 of them were either A assets in B locations or B assets in A locations, like 280 Park [Avenue in New York]—it was a great address but not a good building. So we sold. We got through 15 of the 16 and we raised in the range of four and a half billion dollars,” he says.

Does Port Tack Charter have ‘A’ properties in ‘A’ locations? Should we?   I don’t know, will have to think about it.


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