A $7 billion tax increase heavily affecting wealthy New Yorkers and corporations proposed by the New York Assembly and Senate has many top corporations looking elsewhere to bring their business, the New York Post reports.
Tax increases on the wealthy and corporations pose issues for the recovering state because they posses the means to easily move out, critics told the New York Post. New York’s top 1% generate 44% of the state’s income tax revenue.
"It’s a hell of a lot cheaper to live and die elsewhere," Ken Pokalsky, vice president of the NYS Business Council told the Post.
Twenty top of the finance, private equity and tech firms are considering fleeing to Florida, which has no state income tax, the CEO of the New York City Partnership Kathryn Wylde said to the Post.
"Any conversations that have gone on are based on ideology and the moral issue around income inequality. But raising taxes won’t fix that. The conversation has to be, 'How do we replace 1 million jobs that have left New York State.' We’re not having these conversations. Instead we are saying ‘punish the rich.'"said Wylde
Goldman Sachs, Elliott Management, Blackstone, JP Morgan Chase, and JetBlue are amongst the companies looking to leave the state for Florida, according to the Daily Mail.
Tax increases proposed include: raising the rate on millionaires from 8.82 to 9.85% percent, with the rate capping at 11.85% for those making $25-50 million, A new capital gains tax of 1% on those earning more than $1 million a year; a tax on second homes in NYC; an increase in the estate tax from 16.5% to 20%, and corporate franchises, utilities and insurance companies will receive an 18% surcharge which may result in higher bills for their customers.
"The Legislature's proposals will move us in the opposite direction by driving away the businesses and tax base required to do that. 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," said James Whelan, the Real Estate Board of New York President.
"The results were devastating – two decades of fiscal problems along with rising crime and unacceptable quality of life." Whelan continues.
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