Some New York bankers, managers watching the outflows, have a tax threat on millionaires

BOSTON (Reuters) – For decades, New York bankers and fund managers have accepted the city’s high tax rates as part of working in the world’s largest financial capital.

But with plans to raise rates as part of a New York state budget deal, some financiers are exploring the exits, fueled by a pandemic that has illustrated how working on Wall Street can no longer mean working from of Wall Street.

“I’m already looking for an apartment in Florida,” said a very well-paid person at a top-tier bank who asked that they not identify themselves because their employer still doesn’t know their moving plans.

Others earning more than $ 1 million consider even bolder measures, such as relocating not only themselves but also all of their investment firms, arguing a tax cut for their ability to pay staff. .

A proposal that makes its way through the New York state legislature would make New York City’s top winners pay up to 15.73% in combined state and city taxes.

Currently, New York State income tax rates range from 4% to 8.82%, and New York City taxes range from 3.08% to 3. 88%, leaving higher earnings paying more than 12.7%.

Nicknamed the “Millionaire Tax,” the proposal would add surcharges to people who earn more than $ 1 million a year and surpass California localities to claim the country’s highest combined tax rate.

Some of those who earn a million dollars or more, placing them in the highest tax bracket, say the city’s cultural offerings, which have long been no more than the benefits of lower-tax locations like Florida , Utah or Texas, especially considering remote work success during the pandemic.

THE PASSAGE SEEMS PROBABLY

The fiscal proposal, which looks set to happen, is the culmination of a battle between progressive and moderate Democrats. Until recently, New York Governor Andrew Cuomo resisted the millionaire tax.

Political dynamics have made the intense pressures of companies and rich people almost debatable.

Major financial companies, such as Goldman Sachs Group Inc., Virtu Financial Inc. and hedge fund Elliott Management, have already said they will relocate staff from New York.

Large companies will probably not leave their New York headquarters for tax reasons, but they could be some of their smaller staff and companies, such as hedge funds that only employ dozens of people. “That’s real,” said one of the smaller fund managers. “This creates an overwhelming incentive to move.”

Last month, a group of business leaders, including JPMorgan Chase & Co., Citigroup Inc. and BlackRock Inc., took the unusual step of publishing a public letter warning that wealthy people would leave New York if there was a significant increase in taxes.

He said companies may have to move staff out of New York because their top talent doesn’t want to be recorded at high levels. Some companies have already initiated moves for the purposes of expenses and corporate taxes, according to people who were familiar with the moves.

“When the rich don’t like something, they don’t protest, they just leave,” said Geoffrey Weinstein, Cole Schotz’s tax attorney.

“The rich are under attack and see if there is a way to get rid of 15%. Looking for options “.