New York seeks richest exits as state prepares to dramatically raise taxes

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Top New York City business leaders brace for a possible mass exodus as Governor Andrew Cuomo and state lawmakers prepare to raise taxes.

While the state budget is expected to increase personal income taxes for wealthier New Yorkers as well as corporate taxes, some executives who have temporarily fled the city for Florida due to related lockdowns to a coronavirus pandemic are considering a permanent relocation, according to business leaders informed 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 TBEN 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 TBEN 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 TBEN he has been in touch with some of New York’s biggest companies, especially since 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.”

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“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 an office lease in Miami while Starwood moved its headquarters to the city.

JetBlue, which is currently headquartered in Long Island City, New York, is considering moving 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 passed by Albany state lawmakers and heading to Cuomo’s office for signature, New York rulers would likely see combined local and state personal income tax rates higher than those of the wealthy. residents of California.

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.

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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 administration of President Joe Biden. The president said he wanted to increase the corporate tax rate to 28% in order to pay for his infrastructure plan. Biden said he was ready to negotiate on the corporate rate. New York business leaders seeking tax relief through the elimination of the National and Local Tax Deduction (SALT) cap lobbied Biden 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 TBEN 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 massive 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 appearing nowadays.

A corporate restructuring lawyer said he was considering moving to Washington, DC, believing he could save money on property taxes there. Property taxes in Washington are considerably lower than in New York, according to a 2019 study by USA Today.

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Kathryn Wylde, president and CEO of the Partnership for New York City, with hundreds of members representing businesses in the city, told TBEN 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 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 TBEN 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 New York personal income tax”.

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