Sources told Fox Business ‘Charlie Gasparino’ that banks and lobby groups say the tax increase will lead to relocation out of the state and expansion of door-to-door policies.
The Cavid-19 epidemic is expected to end in 2021, but that doesn’t mean New York City’s largest employers – the megabytes and Wall Street companies – are rushing back to the Big Apple moment.
The Fox business has learned that even with a vaccine that would allow city employers to filter all of their workers into Manhattan office fees by the end of the population, every major Wall Street pay firm is planning to significantly reduce its presence in the city for the foreseeable future.
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The declining workforce is the work of many factors, bankers and Wall Street beasts call the Fox business. These factors include the now-proven ability to work outside of office fees – which is in low-cost states like Florida and Texas – could reduce the huge costs of Manhattan real estate.
But, these people say, the biggest factor is the lack of trust in the ruling political class in New York.
Bankers are blaming New York City Mayor Bill de Blasio and Governor Andrew Cuomo for a brutal lockdown that denies the city’s small businesses and lifestyles.
Today both Cuomo and De Blasio warned that a complete shutdown could now be ahead.
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Lobbyists also blame both men for threatening massive tax increases on bankers and banks to plug large-scale COVID-related budget deficits from key state agencies such as New York City, New York State and the Metropolitan Transportation Authority.
“There’s no question that we’ll see a significant loss of Wall Street talent outside of the epidemic – how long it lasts and how the exit is a task as the political class continues to devil success,” Katherine Walde said. Partnership for New York City, a for-profit group that advocates for the city’s elite industries.
Wilde said in Fox Business that the partnership has met with local politicians and warned that planned taxes have been raised – recently introduced by Cuomo and de Blasio, which will only accelerate the trend of moving bank workers to low-tax states. Florida and Texas, for example, do not have state income taxes.
Last week Oracle moved from California to Texas to join Hewlett Packard Enterprise. When it comes to Golden State rival New York when it comes to taxes on individuals and businesses. Tesla CEO Elon Musk chose the state for its latest factory and relocated his personal residence to Texas.
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Wilde added that banks have warned him that they will look for ways to prevent his high earnings from working full-time in the city if the new tax is implemented. Such a move could make the city and state budget deficit even more significant as New York would be deprived of higher earners ’tax dollars and consumer spending.
“Only half of the bankers will be back by July 2021 and 75% by the end of 2021 but not fulltime.” “But if there is an increase in income tax that affects those higher earnings, they are likely to continue to work remotely and when we see operations outside the city.”
Wall Street companies and similar industries – such as real estate and insurance – which will be targeted by the tax hike, employ about 500,000 people in the city where most are headquartered. In addition to representing billions of dollars in direct tax revenue for the city and state, these high earners spread wealth through their consumer spending, helping employ many other New Yorkers in a variety of service-related jobs.
Over the past decade, Wall Street companies and banks have moved their employees to Texas and Florida to take advantage of lower costs and taxes. But the epidemic is likely to accelerate the trend as companies find ways to allow employees to work from home, not in huge expensive suites in the city.
Any planned tax hike would further boost emissions, bankers say.
Fox Business has previously reported that the country’s largest bank, J.P. Morgan Chase wants to expand beyond New York, although it retains its headquarters in New York City. Once the epidemic subsides, the bank will return its employees back to the city. However, as part of the plan, workers will be asked to work from home several days a week.
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Goldman Sachs and Dutsch Bank are also planning to move out of the city; Goldman intern is having internal discussions to move the asset management department to either Florida or Texas.
Together, the possible departures could have significant implications for the city and state economy. New York City almost went bankrupt in the 1970s due to rising crime, low quality of life and company exit.
The city’s large enterprises began to revive during the stock market boom in the 1980s. It continued into the 1990s and 2000s when Mayor Rudy Giuliani and Mike Bloomberg clashed over crime and accepted the tax-taking business community.
But with the 2014 election of the progressive Bill de Blasio, crime began to rise, and the business community became the target of scandal and the goal of raising taxes. COVID seems to have widened the gap between the mayor and Wall Street as de Blasio said he wanted to target banks and their executives for tax increases amid budget shortages.
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Under New York law, any major personal tax increase must be approved by the governor’s office. Cuomo has resisted tax increases in the past, fearing they would be ousted from the city by top workers and businesses.
Now that the Cuomo New York State Legislature and most city Democrats have moved to the left on tax issues for the wealthy, they appear to be joining the mayor in calling for compensation for the loss of COVID.
“It took two decades to return to the LD0s, when half of the 500 fortune companies left the city,” Walde added. “If this continues and politics remains as it is now, it will return.”
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