Highest tax rates in the nation come to New York City

• New York passed plans this week to increase taxes on its most affluent residents, though top business leaders say the increases could backfire by driving away top earners from the city. The $212B state budget includes more aid for schools, tenants and small business. It also allocates billions to other progressive efforts like renewable energy and nonprofit arts, as well as workers who don't qualify for federal aid because of their immigration status.
• By the numbers: While New York state income tax rates will rise and new brackets have been added, making headlines is the percentage New York City's ultra-high earners will have to pay. Marginal income tax rates could be nearly 52%, which would mean the city's wealthiest residents could end up giving more of their paychecks to federal, state and local governments than they keep for themselves. It would also push NYC past California, which currently has the highest marginal personal tax rate in the U.S. - just over 50% on income over $1M.
• Executives at major Wall Street firms and other New York employers have warned city officials of the consequences. In a letter delivered to Gov. Andrew Cuomo and Democratic leaders of the state Legislature, 250 business executives said the package of tax increases would "jeopardize New York’s recovery from the economic crisis inflicted by COVID-19." New York is already having a slow recovery, with the state's unemployment rate at 8.9% in February, the second highest among the 50 states and D.C.
• Outlook: Elliott Management, Icahn Enterprises, Silver Lake, Blackstone and Moelis are among the firms that have either moved their HQ or opened new offices in Florida over the past year. Goldman Sachs Asset Management is also considering plans to expand in the state - which has no income tax - while JetBlue is looking to relocate its headquarters there from NYC. Many companies have also discovered during the work-from-home lockdowns that they didn't need to keep employees in Manhattan or that the high cost of a NYC flagship office is no longer worth it.
• "I suspect Florida will soon rival New York as a finance hub, due in part to the 'Tax and Spend' policies of New York," said Leon Cooperman, the billionaire former hedge fund manager and CEO of Goldman Sachs Asset Management who fled to Boca Raton.