Business

Business leaders warn $7B in proposed tax hikes could wreck NY

Socking New York’s businesses and wealthy residents with $7 billion in new taxes will likely trigger the worst exodus since the Big Apple flirted with bankruptcy in the 1970s, a huge group of major employers and small business owners warned Tuesday.

In a letter to Gov. Andrew Cuomo and the state’s legislative leaders, the 250 job creators also said a plan to impose the largest tax hikes in state history “will jeopardize New York’s recovery from the economic crisis inflicted by COVID-19.”

“For better or worse, the pandemic has demonstrated that our workforce is more mobile than we ever imagined,” they wrote.

“Our businesses are committed to maintaining a strong presence in New York, but currently only about 10 percent of our colleagues are in the office and prospects for the future of a dense urban workplace are uncertain.”

The executives and entrepreneurs — who together employ about 1.5 million New Yorkers — said many workers “have resettled their families in other locations, generally with far lower taxes than New York, and the proposed tax increases will make it harder to get them to return.”

“This is not about companies threatening to leave the state; this is simply about our people voting with their feet,” they wrote.

“Ultimately, these new taxes may trigger a major loss of economic activity and revenues as companies are pressured to relocate operations to where the talent wants to live and work.”

The employers also pointed to history for a dire and dramatic illustration of the potential consequences.

Morgan Stanley CEO and chairman James Gorman speaks during the Institute of International Finance (IIF) annual membership meeting in Washington DC on Oct. 18, 2019.
Morgan Stanley CEO and Chairman James Gorman seen in October 2019.
Bloomberg via Getty Images

“This is what happened to New York during the 1970s, when we lost half our Fortune 500 companies, and it took thirty years to recover,” they wrote.

The letter noted that President Biden’s recently enacted $1.9 trillion American Rescue Plan — “for which most of us advocated” — will provide New York with enough cash to “eliminate the need for new state and local taxes this year.”

It also said that “significant corporate and individual tax increases will make it far more difficult to restart the economic engine and reassemble the deep and diverse talent pool that makes New York the greatest city in the world.”

“We are not alone in this view; among others, the nonpartisan Citizens Budget Commission has said these tax increases are ‘both unnecessary and economically risky,’ thanks to federal aid and higher than expected tax receipts in 2020,” it added.

The high-powered CEOs who signed the letter include Albert Bourla of COVID-19 vaccine maker Pfizer, Jamie Dimon of JP Morgan Chase, Jeff Blau of the Related Companies, Robert Bakish of ViacomCBS and John Catsimatidis of the Red Apple Group.

BlackRock Inc. CEO Larry Fink speaks at the Handelsblatt Banking Summit in Frankfurt, Germany on Sept. 4, 2019.
BlackRock Inc. CEO Larry Fink speaks at an event in September 2019.
Bloomberg via Getty Images

Real-estate moguls Douglas Durst and Richard LeFrak, Robin Hayes of JetBlue Airways, Sandeep Mathrani of WeWork, Howard Lutnick of Cantor Fitzgerald, Debbie Pearlman of Revlon, Stephen Schwarzman of Blackstone, Rob Speyer of Tishman Speyer, James Tisch of the Loews Corp. and Robert Thomson of News Corp., which owns The Post, were also among the signatories.  

The letter was organized by the pro-business group Partnership for New York City, whose CEO, Kathryn Wylde, said, “The New York state budget for this year should be focused on how to best invest the federal funds coming our way in 2021.”

“They should hold off on new spending and taxes until we have time to develop a plan for educating and training New Yorkers for the jobs of the future, and to determine where those jobs are going to come from,” Wylde said.

“They are legislating a budget without a plan, and that is a terrible mistake.”

On Monday, Cuomo said that federal relief, coupled with better than expected tax revenues, meant the state budget due April 1 can be balanced without the need to cut spending or raise taxes.

JP Morgan Chase CEO and chairman Jamie Dimon is among those who signed a letter warning about the effects of $7 billion in new taxes for New York’s wealthy.
JP Morgan Chase CEO and Chairman Jamie Dimon is among those who signed a letter warning about the effects of $7 billion in new taxes for New York’s wealthy.
The Washington Post via Getty Images

“We agree that our attention must be on getting New York’s economy growing again with a focus on putting out the welcome mat for the New Yorkers who left during the pandemic,” Cuomo budget spokesman Freeman Klopott said Tuesday.

But the Democratic-led state Senate and Assembly have proposed massive spending on education, health care, COVID-19 relief, unemployment insurance for illegal immigrants and other social and cultural programs.

“We are asking those who have a little more to do a little more, so that we’re not looking at the same inequities year after year, day after day, the same austerity — and not really giving the kind of future that we want every New York to have,” Senate Majority Leader Andrea Stewart-Cousins (D-Yonkers) said during a virtual press briefing Tuesday.

“So, I will continue to have conversations with the business community, and we continue to be in partnership and sometimes we agree, sometimes we don’t. But I think that we are all trying to get to the same end — a recovery that lifts everyone in an equitable way.”

Jane Fraser, CEO for Latin American at Citigroup Inc., speaks during an interview at the company's headquarters in Sao Paulo, Brazil on Dec. 3, 2018.
Jane Fraser, CEO for Latin American at Citigroup Inc., speaks during an interview at the company’s headquarters in Sao Paulo on Dec. 3, 2018.
Bloomberg via Getty Images


Source link

About the author

admin

Add Comment

Click here to post a comment