Cities Should Tax Fixed Assets Like Second Homes Rather Than Mobile Wealth
Source: Richard Florida. "The One Tax the Rich Can’t Escape - The Atlantic." May 4, 2026. www.theatlantic.com
The Gist
Rich people can now easily move to avoid state taxes because of remote work, but they still want to keep their fancy homes in places like New York. Cities should tax those homes instead of trying to tax income or wealth, because the rich won't give up their properties but will move away to avoid other taxes.
Conclusion
Cities should implement pied-à-terre taxes on luxury second homes because they target assets the wealthy cannot easily relocate, unlike income or wealth taxes that drive rich residents away
Premises
- Digital technology and remote work have severed the bond between where businesses are located and where wealthy owners live, making the rich more mobile
- Wealthy individuals can easily avoid state income and wealth taxes by changing their tax residence to low-tax states like Florida
- A pied-à-terre tax applies to fixed assets (homes) that wealthy people don't want to give up, especially in culturally and economically important cities
- The amounts involved in property taxes are smaller than income or wealth taxes, making them more tolerable to the wealthy
- Many wealthy people maintain strong social, professional, and philanthropic ties to cities like New York that make them reluctant to sell their properties
- Income and wealth taxes must be implemented at the national level to be effective, since there's no state line to cross at that level
Assumptions
- Wealthy individuals make tax decisions based primarily on financial optimization rather than other factors
- The wealthy value their lifestyle and social connections in major cities enough to pay moderate property taxes
- Cities need additional revenue and cannot rely solely on cost-cutting measures
- The current level of wealth inequality is problematic and requires policy intervention