This argument is used again and again and I wonder: Why do "people with money" stay where they are when there are countries, islands, even just states where there is less taxes to pay?
> This argument is used again and again and I wonder: Why do "people with money" stay where they are when there are countries, islands, even just states where there is less taxes to pay?
Like others said in the comments here: there's a balance of how much money you have to pay as tax until you move to other places. New York is taxing people on top of whatever other taxes are there just because they have money.
My issue is that if people earned the money fair and square, they shouldn't be taxed because they were successful. And this is what this tax does: oh, you afford to buy a 10M home, here's an X% annual tax just because.
I ran a company in NYC for six years before the taxes and onerous regulatory environment convinced me to bail.
The final straw was when we had to hire a fixer to clear up a state regulatory error that would’ve destroyed our business. No amount of calls or letters over months — by me — fixed the issue. The guy we hired got it cleared up in a week.
That’s how I learned firsthand that the more involved the state tries to be in protecting everyone from everything, the more opportunity there is for bad actors and gross inefficiency, and the worse things get.
It's not the "people with money" leaving. There's equal evidence of people with money staying and people with money leaving.
It's people who use their money to generate more value and employ lots of people that are, consistently, leaving. That means that thousands of jobs for the lower middle class are leaving and going to somewhere with a more favorable business environment.
And that's not good (well, it's good for the other city).
It's easy for people in tech hub cities to think that's never going to change but history shows boom towns going bust repeatedly. Sometimes they come back (Seattle). Sometimes they don't (the whole Rust Belt + Upstate NY).
And once the talent pool from a few large companies moves to another metro, whole industries relocate their offices to chase it.
Are Seattle, the Rust Belt, and upstate NY examples of higher taxes driving wealthy job-creators out? I think they were the opposite: the market moved and then the wealthy people left to follow it.
NYC has always been extremely expensive, and people have largely decided that it's worth the price. I don't see how a little wobble in either direction changes that. Everyone could have already moved to Miami, or Salt Lake City, or even cheaper places if they were actually price-sensitive.
A "little wobble" may not change it more than a "little", but enough "little wobbles" over time become a "big wobble" that may change it in a "big" way. The right question to ask is: what's the elasticity? So far the elasticity of domestic migration to tax increases has been smaller than many expected due to network effects and inertia, but nevertheless if you look at the population growth rates of high tax states like CA and NY and compare it to low tax states like FL and TX, you will definitely see a pattern. Rational people think on the margin. Perhaps only a few people will move if you increase tax rates by 0.1%, but more on average will decide to move than if you hadn't raised taxes - the question really is, how many?
In recent years many large businesses have moved out of Seattle entirely. Some just outside of the city limits to Bellevue and some out of the state completely.
Also I'm someone who did move from NY to Miami during COVID along with maybe 1/3 of my peers (work and social). Not all to Miami but mostly to either the southeast, texas or non-LA socal.
No one looks at money that way. If it were I'd find a million dollars under the seat cushions of the couch that Bill Gate's owns. No one is so flaked out they don't know that a 100 grand is a nice chunk of change or what the costs of staying vs. moving are.
I think there is a real argument here that everyone will love to yell at you. Same thing happened with California. Its always a balance -- if the tax is too much people will leave, if they get the number just right in that its a nuisance and not material they will stay.
Though when you start engaging with the bots they can't handle the nuance.
This argument is used again and again and I wonder: Why do "people with money" stay where they are when there are countries, islands, even just states where there is less taxes to pay?
Person with money and former NYC'er here. I didn't stay. I moved to a state with less taxes to pay. I haven't looked back.
> This argument is used again and again and I wonder: Why do "people with money" stay where they are when there are countries, islands, even just states where there is less taxes to pay?
Like others said in the comments here: there's a balance of how much money you have to pay as tax until you move to other places. New York is taxing people on top of whatever other taxes are there just because they have money.
My issue is that if people earned the money fair and square, they shouldn't be taxed because they were successful. And this is what this tax does: oh, you afford to buy a 10M home, here's an X% annual tax just because.
I ran a company in NYC for six years before the taxes and onerous regulatory environment convinced me to bail.
The final straw was when we had to hire a fixer to clear up a state regulatory error that would’ve destroyed our business. No amount of calls or letters over months — by me — fixed the issue. The guy we hired got it cleared up in a week.
That’s how I learned firsthand that the more involved the state tries to be in protecting everyone from everything, the more opportunity there is for bad actors and gross inefficiency, and the worse things get.
It's not the "people with money" leaving. There's equal evidence of people with money staying and people with money leaving.
It's people who use their money to generate more value and employ lots of people that are, consistently, leaving. That means that thousands of jobs for the lower middle class are leaving and going to somewhere with a more favorable business environment.
And that's not good (well, it's good for the other city).
It's easy for people in tech hub cities to think that's never going to change but history shows boom towns going bust repeatedly. Sometimes they come back (Seattle). Sometimes they don't (the whole Rust Belt + Upstate NY).
And once the talent pool from a few large companies moves to another metro, whole industries relocate their offices to chase it.
Are Seattle, the Rust Belt, and upstate NY examples of higher taxes driving wealthy job-creators out? I think they were the opposite: the market moved and then the wealthy people left to follow it.
NYC has always been extremely expensive, and people have largely decided that it's worth the price. I don't see how a little wobble in either direction changes that. Everyone could have already moved to Miami, or Salt Lake City, or even cheaper places if they were actually price-sensitive.
A "little wobble" may not change it more than a "little", but enough "little wobbles" over time become a "big wobble" that may change it in a "big" way. The right question to ask is: what's the elasticity? So far the elasticity of domestic migration to tax increases has been smaller than many expected due to network effects and inertia, but nevertheless if you look at the population growth rates of high tax states like CA and NY and compare it to low tax states like FL and TX, you will definitely see a pattern. Rational people think on the margin. Perhaps only a few people will move if you increase tax rates by 0.1%, but more on average will decide to move than if you hadn't raised taxes - the question really is, how many?
In recent years many large businesses have moved out of Seattle entirely. Some just outside of the city limits to Bellevue and some out of the state completely.
Also I'm someone who did move from NY to Miami during COVID along with maybe 1/3 of my peers (work and social). Not all to Miami but mostly to either the southeast, texas or non-LA socal.
This specifically targets people who don't live in New York though (and thus don't pay income tax).
Wealth follows an extreme power law. This tax is pennies to those who will pay it.
If I tax you one cent would you budge? This is what this tax amounts to the ultra wealthy.
No one looks at money that way. If it were I'd find a million dollars under the seat cushions of the couch that Bill Gate's owns. No one is so flaked out they don't know that a 100 grand is a nice chunk of change or what the costs of staying vs. moving are.
> This is what this tax amounts to the ultra wealthy.
Because you would know what the ultra wealthy think ?
Bots can't think.
Real Estate can't move out of New York. Someone else would have to buy it.
Sounds like a great way to lower housing costs.
I think there is a real argument here that everyone will love to yell at you. Same thing happened with California. Its always a balance -- if the tax is too much people will leave, if they get the number just right in that its a nuisance and not material they will stay.
Though when you start engaging with the bots they can't handle the nuance.