David Lat Misses a Trick
posted by Dave Hoffman
David Lat offers this post about a Cravath partner’s recent real estate sale. David makes some hay about a supposed tax break that made the sale even more profitable. It may be therefore worth noting that John Beerbower, the partner in question, was the lead attorney at Cravath on a recently resolved pro bono suit on behalf of the City of New York that resulted in a tax refund of $280,000,000 for New York’s police, firefighters, and sanitation workers injured in the line of duty. The refund resulting from the suit was the second largest in NYC history. (Full disclosure: I worked for John for almost two years. He’s a terrific lawyer and a wonderful person.)
More importantly, how can Lat, despite his well-placed sources (but dubious use of mensch as an adjective), have missed the key detail about that apartment, well-known to a generation of CSM summer associates: the neat round room with the amazingly detailed, historic, wallpaper?
January 4, 2007 at 3:31 pm
Posted in: Architecture
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Responses (3)
Confused - January 4, 2007 at 10:57 pm
Not sure I understand the connection. It’s ok for a tax system to favor the wealthy because wealthy people sometimes choose to bestow their talents on the less wealthy?
And this is indeed a situation where the tax system favors the wealthy: the story makes clear what the “supposed” tax break is: it’s the fact that wealthy people use special pleading to have their property assessed at very low values, and thus have to pay less property tax than the law seems to require. (The tax treatment didn’t (directly) make the sale more profitable; the sale price was in the story to demonstrate how extremely low the assessment was.) Less wealthy people don’t have the connections or the hired help (”professional managers”) to engage in such successful special pleading, and so their real estate is considered to be worth market price.
Also, Beerbower wants to take this even further: he believes that his property shouldn’t be assessed at the price it’s sold for, according to the story, because, he says, people aren’t paying these high prices for mere real estate; rather, they’re paying for the intangible of joining a “private club.”
There are a lot of ways to solve this problem of arguably unequal assessments. But transferring large sums of money to the wealthy in the form of tax breaks (in the form of low assessments) and hoping that they offset these transfers by donating their time to the less fortunate doesn’t seem like the way forward. It’s great that this partner won a pro bono case that benefited the working class. But that doesn’t make an unfair tax system (unfair because it is apparently susceptible to capture by the wealthy) any more fair.
Georgie X - January 6, 2007 at 12:15 am
“It may be therefore worth noting that John Beerbower, the partner in question, was the lead attorney at Cravath on a recently resolved pro bono suit on behalf of the City of New York that resulted in a tax refund of $280,000,000 for New York’s police, firefighters, and sanitation workers injured in the line of duty.”
Wow, how irrelevant. The guy gets a good “deal” on his taxes, but his soul is cleansed by this good deed. I don’t think so. Why not do the good? and, pay his fair share too?
“I worked for John for almost two years. He’s a terrific lawyer and a wonderful person.”
It’s obvious you think so. Sounds like a great guy, but for the tax eva…
Eric - May 1, 2007 at 3:05 pm
Question:
Why does architecture not have first amendment recognition? Currently, the government appears to reserve the right to architectural expression to itself, as an administrative matter, while denying the same right of expression to individuals.
One leading (unnamed) constitional scholar recently said that that architecture “…lacks the capacity to convey ideas…” that other forms of art and entertainment – and he included pornography in this category of art and entertainment – do.
One other thought is that architecture affects property values and is therefore derived from the commerce clause. Racial property covenants also affect real estate values, but that does not mean that issues of race are commercial issues. In fact, we find the concept repugnant.
Is there anyone who posts in this category who has a more credible response? I’m posting this same question as a comment to several bloggers, and if it is slightly off topic to the post that it follows, that is because it is intended to address the larger issue.
Thanks in advance.
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