The New York Post:

Thanks a lot, Hillary!

In a surprise turnaround that will cost the city $260 million in back taxes and untold millions in future lost revenue, Hillary Rodham Clinton’s State Department has quietly reversed a longstanding policy requiring foreign governments to pay taxes on some diplomatic residences.

It’s a shocking about-face by Secretary of State Clinton — who repeatedly spoke in favor of the city’s right to collect the taxes when she was New York’s junior senator…

The Big Apple, which recently won a federal court ruling requiring India and Mongolia to fork over some $46 million in back taxes, is expected to lose about $7 million a year in current tax revenues.

That number could dramatically increase in the future if property taxes rise…

The $260 million figure represents the amount owed by all foreign countries in back taxes.

The new rule will exempt the quarters of all the diplomatic employees living in their government-owned housing, and wipe out any old tax bills or liens on those buildings.

Frankly, I’m not sure what to think about this. New York State isn’t happy, and from their perspective rightly so, but I understand Hillary’s decision all too well. She believes America should improve its relationships with foreign governments. What’s better way to do so than to tell them they can keep their money?

Also consider the following:

Patrick Kennedy, undersecretary of state for management, said the rules change comes because other countries do not apply similar taxes on US properties overseas, which include Army bases, FBI offices and State Department housing.

“Those countries have come to us and said, ‘Wait a minute. Why is New York taxing us when we don’t tax you?’ ” he said.

“This has become a diplomatic irritant. They’ve held up activity at those locations, not given us building permits.”

It’s not often that I side with the Obama administration, but I’m afraid I’ll have to do so on this one. It’s smart politics and just, considering the fact that foreign governments don’t force the US to pay taxes either.

Good call from Hillary, then.