New York's wealthiest residents are considering fleeing to Florida ahead of income-tax hikes in the state, according to a report
AP
- Some businesses and executives are considering leaving New York to avoid tax hikes, CNBC reported.
- On Thursday, Cuomo unveiled proposals to hike up income taxes in the state.
- Miami's mayor said he'd already spoken to some of New York's biggest firms about moving to Florida.
- See more stories on Insider's business page.
New York's mega-millionaires are set to start paying the nation's highest income-tax rates, and some are already considering moving to states with lower taxes, CNBC reported Thursday.
This includes Florida, which doesn't have a personal-income tax.
New York Gov. Andrew Cuomo revealed plans on Thursday to hike personal-income tax for those earning more than $1 million, with the wealthiest New York City residents set to pay 14.8%, the highest rate in the country.
Francis Suarez, the mayor of Miami, told CNBC that he'd already spoken to some of New York's biggest firms about possible reallocations to the city.
"I can't give names but if you're looking to know if we're talking to the biggest firms in New York, we are," he said.
"Clearly, the toxic climate in New York has led businesses to look to Miami as an attractive place for long-term expansion and relocation," Suarez added.
A media executive at a large New York public relations firm told CNBC that he had spoken to more than a dozen people who are considering fleeing the state as taxes rise.
"Moving to Florida is an active and serious conversation with my peers," he told the publication. "If my kids weren't here I would move tomorrow."
Kathryn Wylde, CEO of the Partnership for New York City, which works with top business leaders, told CNBC that CEOs were being urged to open offices outside of the state so that staff can avoid the higher tax rates.
Wylde added that an asset manager had told her a potential recruit had refused to live in New York City due to the tax increases, and that the asset manager was now planning to open offices in Florida.
Businesses and CEOs are flocking to Florida
It isn't just wealthy New Yorkers who are considering a move to Florida. In February, Insider's Daniel Geiger and Alex Nicoll reported that Microsoft, Citadel, Elliott Management, and Baker McKenzie were nearing deals for prime office spaces in South Florida.
Subway is also shifting some business units to Miami, where its CEO lives, and hedge fund billionaire David Tepper is reportedly planning to buy a $73 million mansion in Palm Beach.
"Low taxes, year-round warm and sunny weather, and an influx of wealthy corporate and financial industry executives have made it a rare bright spot of activity in an otherwise moribund office leasing market nationally," Geiger and Nicoll wrote.
The rise of remote working has also made it easier for workers to relocate. Alongside Wall Street's exodus to Florida, there's a Silicon Valley exodus to Texas, headlined by Elon Musk's and Oracle's moves to the Lone Star State, Insider's Hillary Hoffower reported.
New York's millionaire tax
In Thursday's $212 billion budget proposal, Gov. Andrew Cuomo included personal-income tax hikes to fund, among other things, improved infrastructure, affordable internet for low-income families, and small business relief.
The tax hikes would affect about 123,000 New Yorkers earning more than $1 million a year, MarketWatch reported.
Under the proposals, individuals earning more than $1 million and couples bringing in more than $2 million would be taxed 9.65%, up from 8.82%. Those earning between $5 million and $25 million would be taxed 10.3% of their income, rising to 10.9% for those earning more than $25 million.
The surcharge would bring in around $2.8 billion in new tax revenue, rising to $3.3 billion in the 2023 financial year, Cuomo's office said - alongside roughly an additional $1 billion from corporate tax hikes.
New York City already has its own 3.88% income-tax rate in addition to state taxes, meaning that the 529 wealthiest residents are set to pay nearly 14.8% total income tax under the new proposal, according to calculations by MarketWatch.
This would be the highest income-tax rate in the US, beating California's current rate of 13.3%
Cuomo said in January he planned on raising taxes if the White House didn't help the state recover from its $15 billion deficit, the highest deficit in its history. He added that COVID-19 had caused the state's revenues to fall by $5.1 billion.
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