With the exception of a this slice of the retail economy, the uber-wealthy don't really contribute that much to the general economy. Yes, they buy luxury cars, yachts, vacation and homes which may look like a pile of money, but they consist of relatively few transactions and don't move the overall needle much.

An anecdote:

I had a heated "discussion" with a friend involved in NYC real estate. He contended that the new real estate tax laws would drive valuable big spenders out of the City. My contention is that, if they wanted to contribute to the City, they simply had to become residents of "somewhere" in NY Sate and pay local taxes. Otherwise, their contribution was possibly a few restaurant visits and a couple of purchases at Bergdorf Goodman or Printemps a year and they had the ability to visit NYC's museums without renting a hotel room. (Of course, if they were, say, Russian or Chinese oligarchs hiding money in the largest tax haven in the world, probably even that pittance was missing). The only part of the City's economics which was benefiting was the real estate industry, but the drain of available apartment stock was driving the prices to the point that even the local well-heled couldn't afford the properties.

At the suggestion of its new mayor, New York City now imposes an annual "pied-à-terre" tax on non-primary residences.

Targeted at high-value luxury properties, the surcharge is implemented in two phases based on market value, creating significant new tax obligations and compliance processes for co-op and condo boards.

Phase 1: Temporary Framework (July 2026 – June 2028)During the initial rollout, the Department of Finance (DOF) uses existing valuation methods.
Threshold: Co-ops and condos with a DOF-assessed market value of $1 million or more.
4.0% for values between $1 million and $3 million
5.25% for values between $3 million and $5 million
6.5% for values over $5 million

Phase 2: Market-Value Based (July 2028 – June 2031)
Beginning in mid-2028, the city will transition to a new valuation method using arm's length sales of comparable units.
The threshold for co-ops, condos, and 1-3 family homes will rise to $5 million or more, with the following rates:
0.8% for properties valued between $5 million and $15 million
1.05% for properties valued between $15 million and $25 million
1.3% for properties valued over $25 million

Key Operational Impacts
Co-op/Condo Burdens: The tax is typically assessed on the property as a whole and billed to the co-op or condo entity, shifting the collection burden to the board. If tenant-shareholders default, the entire building can be at risk of a lien.

Determining Exemptions: The DOF uses the address listed on the owner's New York State tax return to determine primary residency. Exemptions exist for full-time tenants, homes occupied by the owner's immediate family, and city properties owned by full-time New York State residents.

So, people ask me how the new mayor is doing, and I currently answer "so far, so good"

Jeff