Opinion

New York can’t afford to lose many more tax refugees

New York’s politicians refuse to face the way the state’s tax burden is prompting a growing rush of refugees.

Bloomberg reports that ex-Morgan Stanley dealmakers Sadek Wahba and Adil Rahmathulla are moving their $12 billion private-equity firm to Miami — following other funds led by big names like David Tepper, Paul Tudor Jones and Eddie Lampert to what Florida touts as “Wall Street South.”

And the Sunshine State is just one destination for fleeing New Yorkers, albeit an attractive one, with no state income tax and property taxes far lower than in New York.

As a result of the new federal tax law, with its cap on state and local tax deductions at $10,000, top earners are finally feeling the full impact of New York’s high rates.





So the only question is how big the ensuing exodus will be. Even a small one means bad news for a state that gets 18 percent of its revenues from the financial sector.

State lawmakers ought to respond to the federal change by slashing New York’s rates to reduce the new competitive disadvantage. Yet Assembly Speaker Carl Heastie is still calling for higher taxes on the rich — and if Democrats win control of the state Senate, he’s likely to get his wish.

Gov. Andrew Cuomo knows higher taxes on the rich will tank state revenue in the long run. “You are kidding yourself if you think you can be one of the highest-taxed states in the nation, have a reputation for being anti-business — and have a rosy economic future,” he said in 2011 of the “temporary” millionaire’s tax imposed in 2009. But he hasn’t followed his own advice: Cuomo keeps extending the tax.





Meanwhile, his gimmicks (such as a bogus “charitable fund”) to try to soften the SALT-cap hit are clearly hopeless.

How much of New York’s tax base will have already fled before its leaders admit things have to change?





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