MANHATTAN – In what can only be described as piss poor fiscal management, Upper East Side City Council Member Keith Powers is hyping a new bill that would give away billions of dollars in city tax revenue, only to large businesses, at a time when the city slashes services and and Mayor Adams demands budget cuts of city agencies.
However, New Yorkers wouldn’t have a clue about the true nature of the cash grab and it’s potential for a dramatic impact if you listened to Council Member Powers and his cronies, who champion themselves as saviors of small businesses, when all they really are is a puppet for a special interests, introducing legislation that will line pockets of big business owners— not save mom and pop shops.
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The commercial rent tax has been around since 1938. Decades after its implementation, in 1963, then-Mayor Robert Wagner pushed to raise the tax, while facing fierce opposition from special interests, like the Real Estate Board of New York.
The lobbying group, now known as REBNY, predicted a sky-is-falling scenario, as noted in New York Times report, that “would discourage big companies from making their headquarters here and will eventually drive [businesses] already established here to the suburbs or other states.”
Fast forward sixty years and only things that have changed is the special interest group and local lawmakers’ willingness to put corporate greed above the needs of New York City residents.
This is the second tax money giveaway from Council Member Powers, who represents western parts of the Upper East Side as well as half of Midtown, has introduced in city council, and it comes at a staggering cost.
Businesses located below 96th Street in Manhattan are currently taxed at 3.9% of their annual rent, a move the NYC Hospitality Alliance— a restaurant industry lobbying group— calls it “unjust and discriminatory” to charge a premium for premium real estate.
At this point, you may be asking, what’s wrong with eliminating the tax?
Well, for starters, a REBNY report from 2020 found that the commercial rent tax generates $900 million in revenue for the city.
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That means a three year suspension of the tax— which under the bill touted by Powers and UWS Council Member Gale Brewer would only effect retail and restaurants — would cost billions of dollars in tax revenue that should have been going into city coffers.
Beyond that, small businesses are already exempt from the tax.
“The pandemic devastated our city’s small businesses,” Council Member Powers said in a statement released Thursday.
“Relieving the commercial rent tax puts money back into the pockets of struggling business owners,” the Council Majority Leader added.
Let us say that again:
SMALL BUSINESSES ARE ALREADY EXEMPT FROM THE TAX.
A 2018 law made it so that companies with under five million dollars in income and less than $500,000 in annual rent would be exempt. In fact, there’s already even a tax break for businesses with up to ten million in revenue, who receive a tax credit on a sliding scale.
Since small businesses are already exempt from the tax, Council Member Powers tax giveaway would only help large companies— but you wouldn’t know it if you listened to the council member, who has bent over backwards to give away money to special interests.
Last month, Powers said he took ‘immediate action’ with a tax cut for restaurants that came three days after an Op-Ed from the NYC Hospitality Alliance was published, demanding tax cuts for its members, who blame taxes for what they call New York’s “lagging recovery.”
Powers, champion of tax money giveaways to the restaurant industry, even promotes the accolades he receives from industry lobbyists to do their bidding in city council.
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“Thanks to the NYS Latino Restaurant Bar & Lounge Association for honoring me tonight as a champion of small businesses and nightlife,” Powers tweeted on May 18th along with photos of the gala and the award he was given for ‘excellence in leadership.’
Thanks to the @nysrbla for honoring me tonight as a champion of small businesses and nightlife.— Keith Powers (@KeithPowersNYC) May 19, 2022
New York City is world class for our restaurants, nightlife, and culinary diversity. These small businesses bring life to our amazing city. 🗽 pic.twitter.com/mLz1SFlJYT
Upper East Site pressed Council Member Powers for comment on this story and after numerous inquires with specific questions relating to how large businesses would benefit from the tax money giveaway– which would have no effect on small businesses– we received this throwaway response:
“There is no rationale for our neighborhood retail businesses to be unfairly punished based on which block in New York City they reside on,” said Powers’ Chief of Staff Kate Theobald, but did not explain the rationale for a tax break on large businesses– such as luxury global retailers on Madison Avenue.
“Council Member Powers has carried [commercial rent tax] legislation dating back to 2018, and is the proud son of a restaurant owner,” she added.
Council Members Gale Brewer and Julie Menin, who co-sponsored the bill, did not respond to our inquiries by time of publication.
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