Friday, January 31, 2014

Crony Businessmen in NYC Support the Mayor's Plan for a Hike in Taxes

WSJ explains:

Mayor Bill de Blasio has lately been rolling out endorsements from New York City business execs for his plan to raise taxes on the wealthy to pay for universal pre-school. These putative leaders of industry cite the need to provide equal opportunity for the city's poor, but we suspect many are motivated mostly by self-interest.

Mr. de Blasio in recent weeks has extracted, er, garnered endorsements from such real estate mavens as Jed Walentas, principal of Two Trees Management; David Kramer, principal of the Hudson Companies; Mitch Draizin, owner of Longview Capital Advisers; Charlene Gayle, owner of the Macon Realty; Leonard Litwin, principal of Glenwood Management; and Don Peebles, CEO of Peebles Corp.

Few industries are at the mercy of city hall as much as real estate, whose growth depends on city zoning rules and building permits. Mr. de Blasio has made clear that he intends to expand the city's stock of affordable housing, which could be a business opportunity or killer. Any surprise that the developers are trying to make nice with the new mayor?

Also backing the tax hike is Matthew Daus, former chairman of New York's taxi and limousine commission and president of the International Association of Transportation Regulators. The association, which has a friendly relationship with local car-service companies, has proposed guidelines that would effectively regulate the start-up Uber out of business.

Then there's Jim Walden, an attorney at the white-shoe law firm Gibson Dunn & Crutcher who defends "corporate and individual in high-stakes governmental investigations, regulatory actions, and civil disputes." Mr. Walden hosted four fundraisers for Mr. de Blasio's mayoral bid, and Gibson Dunn even represented the former public advocate last year in a pro bono lawsuit to block the closures of two Brooklyn hospitals. That would seem to make Messrs. Walden and de Blasio good buds.

For Mr. Walden and the others, supporting the tax hike is an essentially free way to buy the mayor's good will and head off shakedowns. The endorsements are also unlikely to influence the political machinations in Albany, which must sign off on any tax hike.

Mr. de Blasio will point to the endorsements to suggest that his tax hike enjoys broad-based support, even among the city's well-to-do