If the Democrat-controlled state legislature passes its proposed $208 billion tax-and-spend plan, “New York State will be the most-taxed state in the country.”
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New York is already one of the highest-taxed big cities in the country, and widespread reports of residents, especially well-heeled ones, fleeing the city make steep tax increases risky and probably counterproductive.
New York faces another threat to its economic revival, one that it didn’t confront during the last two recessions—violent crime, which rose abruptly and significantly last year. Murders increased a shocking 42 percent, and shootings almost doubled to 1,531. More people were victims of shootings in the city than in any year since 2002.
Once Wall Street bolts, New York will continue to decay and disintegrate into decrepitude like all the other failed Democrat cities like Detroit, until it too, becomes a tale of once upon a time in America when it was great. It is the ultimate take down from the Marxist Democrats.
Even in late 2003, when city officials were declaring victory over budget woes thanks to Wall Street’s revival, Gotham was still shedding jobs in construction, advertising, management consulting, manufacturing, and computer services, among other industries
Wall Street is the engine of the world’s capital. Unlike in the old days, when you have many sectors (i.e., manufacturing) supporting the economy of this town, before those sectors were decimated by unions, today Wall Street and Social Services are the big employers and economic drivers of the city.
I ran this back in September 2005: by Steven Malanga in City Journal:
A big chunk of what has passed for private-sector job growth in New York has also occurred in industries that are nominally private but are actually supported by tax revenues and therefore don’t create wealth but at best merely redistribute it. These industries—health care and social services—have accounted for nearly half the city’s job growth in the past 12 months and now represent 18 percent of all “private”-sector jobs in the city. Moreover, concentrated in areas like nonprofit social-services agencies, home health-care services, and nursing homes, these are mostly low-wage jobs. The typical home health-care job in the city, for instance, pays about $25,000 a year. New York will never earn back its title as one of the country’s leading entrepreneurial centers when tax-supported low-wage jobs account for so much of its economic growth.
Anyone who has watched the long decline of New York’s economy—which today employs nearly 200,000 fewer people than 35 years ago—will understand what’s happening, because it has happened before, repeatedly. The city’s economic slide began in the mid-1960s, when city and state pols began sharply raising taxes to pay for an expanded social agenda—saddling New York with the heaviest tax burden among U.S. cities. Today, Gotham taxes residents and businesses at about 75 percent more than the average of the next ten largest American cities—and that startling percentage is growing. Over the past 35 years, those high taxes have sucked billions out of the private sector, depriving it of needed capital for expansion and ultimately driving away thousands of businesses, including around a hundred Fortune 500 firms, and leaving fewer quality jobs for New Yorkers. A 1997 City Journal study concluded that if New York’s taxes had been in line with those of other old industrial cities, Gotham would have 1 million more jobs than it actually has.
The city’s Giuliani-era economic revival should have provided a blueprint for how to address Gotham’s post-9/11 challenges, for the 1990s was the one period in last 35 years when the city’s economy outperformed the nation’s, growing by 440,000 jobs and bringing New York back to its 1969 job peak shortly before the terrorists struck. Faced with budget deficits when he took office in 1993, Mayor Giuliani refused to raise taxes but instead shrank the size of government and slowly began cutting taxes. When Wall Street boomed and poured tax dollars into the city’s coffers, Giuliani used the resultant budget surpluses to cut taxes further, reducing the overall tax rate by about 10 percent, still much higher than most major cities. Even so, the cuts sent a message that New York no longer viewed the business community as a gigantic revenue source to be shaken down at every opportunity. Spurred by Giuliani, New York went ten years without a tax increase, although rising profits and property values propelled by economic revival still boosted tax collections and helped fill the city’s coffers.
Read it all. It’s the only lesson in capitalism vs socialism you will ever need.
“While every town and hamlet probably sees itself as the “real” America, traditionally speaking there may be no city and state more American than New York. It was the first hub of the young nation and its capital from 1785-1790. Since 1790, New York City has been the most populous in the country, while Los Angeles and Chicago traded the next two spots throughout most of the 20th century.
Unfortunately, growth has given way to bloat. Starting in the 1970s, New York’s population began to stagnate and then decrease. Much of this trend can be attributed to the lax law enforcement practices and precarious financial administration policies under a string of mayors beginning with John Lindsay in the late 1960s and ending with the resurgence of the city under Rudy Giuliani after 1994.
But the current administrations of both the city under Mayor Bill de Blasio and the state under Governor Andrew Cuomo are yet another regression. Well before the COVID-19 pandemic hit, both executives were leading New York into a ditch with their ineptitude and mutual dislike for each other.”
Top finance, tech firms mulling NY exodus over proposed tax hike
Top New York firms that toughed it out through the pandemic are now considering packing their bags over $7 billion in proposed new state taxes.
By Jeffrey Wilson and Isabel Vincent, NY Post, March 20, 2021 |
At least 20 finance and tech companies are already poised to leave for sunny, low-tax Florida, said Kathyrn Wylde, CEO of the business-backed Partnership for New York City.
“The Legislature’s proposals will move us in the opposite direction by driving away the businesses and tax base required to do that,” said powerful Real Estate Board of New York President James Whelan.
If the Democrat-controlled state legislature passes its proposed $208 billion tax-and-spend plan, “New York State will be the most-taxed state in the country,” Wylde lamented.
Tech jobs — so easily toggled to “remote” in 2020 — are particularly vulnerable to relocation. “Technology is our most important job creator in New York right now, and they’re already making decisions about not staying in New York,” Wylde said, declining to name names.
Albany pols seem intent to “punish the rich,” Wylde said.
And the cold new tax climate might also mean that high-income New Yorkers who temporarily fled the city for places like Palm Beach might not come back.“We can’t take for granted that the millionaires and billionaires will return to New York,” Wylde said.
JetBlue weighs moving NYC jobs to Florida
Big names on Wall Street have already threatened to pack their bags if Albany enacts a stock-transfer tax, which is proposed in an active bill. The state would claim a percentage of the proceeds from every purchase or sale of stock, or other security, under the measure.
“While New York has remained a center of gravity for the financial industry, many employees of ‘Wall Street’ firms are migrating to Florida, Texas and other states with hospitable tax policies,” Stacey Cunningham, the president of the New York Stock Exchange, wrote last month in a Wall Street Journal op-ed.
“The New York Stock Exchange belongs in New York. If Albany lawmakers get their way, however, the center of the global financial industry may need to find a new home,” she warned.
A Nasdaq spokesman didn’t return a message on its plans.
The CEO of Manhattan-based high-frequency trader Virtu Financial, Douglas Cifu, has called a stock-transfer tax “foolish.”
“We have an office in Florida, and we would just leave the state of New York,” he said during a February earnings call. “We would never pay any of the New York state [stock-transfer] tax.”
Cifu added that the Texas legislature is considering a ban on “any type of transaction tax.
”Goldman Sachs is considering relocating its asset-management business to Florida, scoping out offices in Palm Beach and Fort Lauderdale, according to reports. A Goldman rep told The Post Friday: “We are executing on the strategy of locating more jobs in high-value locations throughout the US, but we have no specific plans to announce at this time.”
State Sen. Alexis Weik, a Long Island Republican, said, “Rather than focus on keeping New Yorkers in New York, these irresponsible tax and spend policies will continue to drive our residents out of the state.”
The exodus might not be limited to asset-light firms whose workers ply their trades by laptop.
New York’s hometown airline, JetBlue, said in a March 11 memo to employees obtained by The Post that it was “exploring” moving “a to-be-determined number of roles to existing support centers in Florida.”
Whelan, of REBNY, offered a doomsday prediction if the tax hikes go through:
“We have been down this road before. In the 1960s and 1970s, such policies ultimately discouraged investment in New York City and led to a diminished tax base and fewer resources for the delivery of government services. The results were devastating – two decades of fiscal problems along with rising crime and unacceptable quality of life.”
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