Wealthy business leaders are considering moving at least some of their resources out of New York and into less-taxed states after Gov. Andrew Cuomo and Democratic legislative leaders agreed to hike taxes on New Yorkers worth more than $1 million, reports CNBC.
The city’s high-income earners could pay between 13.5% to 14.8% in state and city taxes, the highest in the nation. Cuomo’s budget deal includes an increase in the top marginal rate on the state’s income tax to 10.9% from today’s 8.82%. Add New York City’s top local tax of 3.88% and the total is 14.78%.
The business franchise tax will also be raised to 7.25%, from 6.5%.
Only nine states have no income tax, including Florida, Texas, Nevada, Washington and Wyoming.
“It’s a consideration, (moving),” Tracy Maitland, president of investment advisory firm Advent Capital Management, 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 to steady the ship. If I can’t, then I’m going to have to make a decision,” he added.
Miami Mayor Francis Suarez told CNBC he’s been fielding calls from some of New York’s biggest firms about moving down South.
“I can’t give names but if you’re looking to know if we’re talking to the biggest firms in New York, we are,” he said.
“Clearly, the toxic climate in New York has led businesses to look to Miami as an attractive place for long-term expansion and relocation,” Suarez added.
He also said he’s received a “very receptive” response to his pitch to New York executives and noted recent moves by Blackstone and Starwood Capital into Miami.
New-York private equity firm Blackstone in March purchased two towers for $230 million in downtown Miami. Starwood Capital moved its headquarters from Connecticut to South Florida in 2018. Elliott Management, a hedge fund, last year announced it was following in Starwood’s footsteps.
Three top executives at Elliott have listed homes in Manhattan.
“If you think of New York City as a ballet, right now the city is at intermission,” real-estate agent Jason Haber at Warburg Realty recently told the Wall Street Journal. “During intermission, some people get restless and don’t come back for the next act. That’s what’s happening now.”
JetBlue Airlines is considering shifting some of its operations to Florida.
“We’ve hit a critical mass of interest and excitement in Miami and with these big players coming here, people are beginning to understand that this is very real,” Suarez said.
Wall Street has slowly been moving to Florida for several reasons: sunnier climes, COVID-19, and more favorable tax policies.
But Cuomo’s budget deal has pushed some over the edge.
“Moving to Florida is an active and serious conversation with my peers,” a media executive who runs a massive public relations firm in New York told CNBC. “If my kids weren’t here, I would move tomorrow.”
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