Former House Speaker Paul Ryan is on the speaker’s circuit. Ryan was a guest at the George W. Bush Presidential Center’s Leadership forum on April 15. He predicted “a big migration” from cities like New York that do not appreciate job creators. “So you’re going to see a big migration based on cost, quality of government [and] entrepreneurship,” said Ryan.
The migration is already underway, and it was accelerated by the Trump Administration’s capping the amount of state taxes that high earners can deduct from their federal tax burden. High-income earners are pulling up stakes and heading for the tax- and business-friendly states of Texas and Florida.
It is not coincidence that on the day the GOP passed the tax reform, Apple’s CEO Tim Cook told Ryan that Apple was repatriating about $40 billion in money Apple had stashed oversees. Cook said he intended to hire 20,000 people in America somewhere.
That somewhere would be Austin, Texas. Said Ryan, “I don’t think he was going to put that up in California.”
The New York Post weighed in on the how companies were getting set to vote with their feet and leave New York City. About 20 finance and tech companies are pulling up stakes, with JetBlue the latest big player to think about relocating its head office to Florida when its lease ends in 2023.
As New York has suffered under deficits and lower tax revenue because of COVID-19, Governor Andrew Cuomo wants to raise taxes on its wealthiest residents. Legislative leaders have come to a tentative agreement and are set to make New York millionaires pay the highest state income tax rate in the nation.
New York’s goal is to generate an additional $3.4 billion in revenue. What they may generate, however, is a sustained exodus of the very rich.
Likewise, House Democrats appear to be moving towards repealing the SALT cap. The inescapable irony is that the repeal will disproportionately benefit rich Americans living in blue states like California and New York. Removing the cap would take Democrats off their traditional message that Republicans want to only help the rich.
Even more disquieting to Democrats is the possibility that the New York Stock Exchange may leave the Big Apple if stock trading is taxed. According to an Economic Times article, last February exchange President Stacey Cunningham warned “that the unthinkable was possible. Wall Street, he said, could flee if New York State imposes a state tax on the thousands of stock trades each day.
Cunningham wrote in a Wall Street Journal column, “While New York has remained a center of gravity for the financial industry, many employees of ‘Wall Street’ firms are migrating to Florida, Texas and other states with hospitable tax policies” Cunningham wrote in a column published in The Wall Street Journal.
In what could be an epic attack of common sense, New York’s budget director, Robert Mujica suggested that a tax on stock transactions would drive New York’s most famous organization out of the state.