Top New York business leaders are bracing for a possible mass exodus as a government. Andrew Cuomo and state legislators are preparing to raise their taxes.
With the state budget set at increase personal income tax on the wealthiest New Yorkers as well as rising corporate taxes, some executives who temporarily fled the city for Florida due to Coronavirus pandemic the lockdowns contemplate permanent relocation, according to business leaders briefed on the matter.
Wealthy business leaders who have historically resisted transferring at least some of their resources to Florida or other lower-tax states told CNBC that they are now seriously reconsidering working from home as the norm, allowing more flexibility.
Tracy Maitland, president of investment advisory firm Advent Capital Management, said that while he still loves his home base, he’s not ruling out leaving.
“It’s a consideration,” Maitland told CNBC in an interview Wednesday. “I love New York and I was born and raised in New York. I’m going to do whatever I can to try and stabilize the ship. If I can’t, then I’m going to have to make a decision,” he added.
Florida does not tax personal income. Miami Mayor Francis Suarez told CNBC he has been in touch with some of New York’s biggest companies, including since the details of the tax hikes were announced this week.
“We have been,” Suarez said when asked if he had heard from New York-based business executives in recent days. “I can’t give names, but if you’re looking to see if we’re talking to the biggest companies in New York City, we are.”
“Clearly, the toxic climate in New York City has led companies to view Miami as an attractive location for long-term expansion and relocation,” Suarez said. He noted that he had received a “very receptive” response to his pitch to executives in New York and pointed to the movements of Blackstone and Starwood Capital in Miami. Blackstone recently signed a Miami office rental as Starwood moved its Headquarter Towards the city.
JetBlue, currently headquartered in Long Island City, New York, is considering moving some staff to Florida.
“We’ve reached a critical mass of interest and enthusiasm in Miami and with these great players coming here people are starting to understand that it’s very real,” Suarez said.
In the budget adopted by state legislators in Albany and heading to Cuomo’s office for the signing, New York City executives would likely see the combined local and state personal income tax rates higher than those of wealthy California residents.
A spokesperson for Cuomo’s office did not return a request for comment until the post.
In the state budget of more than $ 200 billion, the highest tax rate is raised to 9.65% compared to 8.82% for single filers who earn more than $ 1 million. Those earning between $ 5 million and $ 25 million would be taxed at around 10.3% and for those earning more than $ 25 million the rate would be 10.9%. Wealthy earners are expected to be hit by these new taxes in the coming tax season, with rates expiring in 2027.
As New York’s rulers contemplate their future life options, wealthy people across the country face the threat of a federal corporate tax rate hike under the president. Joe bidenadministration of. The president said he wanted to increase the corporate tax rate to 28% in order to pay for his infrastructure plan. Biden has says he’s ready to negotiate on the corporate rate. New York business leaders seeking tax relief by removing the national and local tax deduction cap (SALT) have lobbied Biden’s advisers and Majority Senator Chuck Schumer, DN.Y.
Those who declined to be named in this story did so in order to speak freely about the ongoing private conversations.
A Wall Street executive who worked for investment firm Evercore and other similar offices told CNBC that a few friends who already reside in Palm Beach, Florida, are considering making it their permanent home.
An executive at an investment firm said he “thought about it” when asked if he would leave New York entirely.
A media executive who runs a huge public relations firm in New York City said more than a dozen people he spoke to are seriously considering leaving the state for good with taxes for the rich on the rise.
“Moving to Florida is an active and serious conversation with my peers,” said this person. “If my kids weren’t here, I would move out tomorrow.”
Other places are also popping up these days.
A corporate restructuring lawyer said he was considering moving to Washington, DC, believing he could save money on property taxes there. Washington property taxes are considerably lower than they’re in New York, according to a 2019 study by USA Today.
Kathryn Wylde, president and CEO of the Partnership for New York City, with hundreds of members representing businesses in the city, told CNBC that business leaders are hearing from employees and potential hires talk about the need to create offices in states outside of New York. in order to avoid paying higher tax rates.
“What I’m hearing is that these non-resident taxpayers are now asking employers to set up an operation where they can be domiciled so they don’t have to pay taxes in New York,” Wylde told CNBC in an interview. Wylde’s group sent a letter to Cuomo and the state’s Democratic leaders last month, urging them not to raise taxes. The letter didn’t seem to have much impact.
The partnership’s executive committee includes Jamie Dimon, CEO of JPMorgan, Larry Fink, CEO of BlackRock, Jane Fraser, CEO of Citigroup, and Steve Schwarzman, CEO of Blackstone.
Wylde referred to a conversation she had with an asset manager, whom she declined to name, who told her that a potential recruit had refused to live in New York due to tax increases and that this executive now planned to open offices in Florida.
New York State law states that “if you are a non-resident, you are not liable for personal income tax in New York. “