Friday, September 13, 2019

New York City's 1% Solution

It is a fact not often enough noted, but in New York City 1% of the people pay 40% of the taxes. I do not know the percentage for New York State, but obviously, losing a few high profile billionaires will seriously impact both the city and state budget. In truth, it already has. And things are getting worse.

Keep this in mind when politicians promise to tax the rich, as though the rich were dummies who simply do what Bill de Blasio tells them. And keep it in mind when Democratic presidential candidates promise to make the rich pay. Weren’t they paying attention to the debate around the Trump tax cut, where we learned that major American companies were refusing to repatriate profits because the tax code would punish them accordingly? And don’t forget the American companies that are relocating to friendlier foreign climes, the better to avoid confiscatory taxation. 

So, New York City just took a hit. Billionaire investor Carl Icahn is moving his business and his home to Miami, Florida. And he is offering an opportunity for his employees to follow him to the Sunshine State.

Zero Hedge has the story:

Billionaire investor Carl Icahn is reportedly planning to move his business - and his home - to Florida, one of seven US states with no personal income tax, to avoid New York taxes, according to Bloomberg.

The 83-year-old, who was born in the Far Rockaway neighborhood of Queens, has been a major figure on Wall Street for decades, and back in the 1990s, he bought a mansion on the Indian Creek island enclave in Biscayne Bay in Miami. Icahn expects all of his employees to make the move with him: Those who don't "won't have a job", according to several sources from within his firm.

Other billionaires have already made the move, some from New York, some from New Jersey, some from Connecticut. The Trump tax cuts helped their thinking, especially, by limiting deductions for state and local taxes… not to mention for mortgage interest.

Icahn is hardly the first to move to Florida for the sunshine and lower tax rates: Hedge fund billionaires David Tepper, Paul Tudor Jones and Eddie Lampert are some of the more prominent examples. But the state has been aggressively pushing Miami as a hotspot for the asset-management industry since President Trump signed his tax overhaul into law. It notable featured a $10,000 cap for state and local deductions.

Anyway, it’s a point worth noting. New York City cannot afford to lose too many billionaires. Before you know it, it might become like its sister cities on the West Coast. Especially when Democrats continue to promise that higher taxes on the rich will fund their grandiose and wasteful schemes.


Sam L. said...

States and cities that encourage the rich to move out of state by raising their taxes will find out that does indeed work. States and cities will eventually realize their error. The old saying that "Too Late" is one of the worst realizations will be realized again.

Ignatius Acton Chesterton OCD said...

De Blasio doesn’t even go to work these days, and New Yorkers are paying his salary, benefits and perquisites. He has never worked in the private sector. No one knows why he is running for president after being NYC mayor for five years. NYC is falling apart, yet he is off doing his own thing — telling the Democrat base how racist and selfish everyone else is.

One can only wonder why Icahn is not willing to pay his fair share.

Icahn has choices. The “pro-choice” party doesn’t seem to understand this.

“The problem with socialism is that you eventually run out of other peoples’ money.” — Margaret Thatcher

UbuMaccabee said...

Whatever is bad for NYC is good for America. Whatever is bad for San Francisco is good for America. The less money and power both of those cities have the more power the normals have in the rest of the country.