Pandemic, violent protests and now a whopping tax increase of up to 52 percent. But when the rich leave the city, the New York budget collapses.
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New York is planning a massive tax hike. If it goes as planned, the rich in the city would have to live with a tax burden of up to 52 percent, levied by the federal, state and local authorities. Or they don’t pay anything in New York anymore because they’re moving to Texas and Florida.
In countries like Germany, income tax is the same across the whole of Germany. In the USA, this only applies to federal taxes. In contrast to Germany, states and municipalities levy their own taxes on income, and New York City also has considerable taxes on housing and real estate.
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Townhouse and top tax rate
Rich with an average salary – the middle class is reckoned to be wealthy. And that has consequences
07.02.2021
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What if the rich go?
The idea of taxing the rich sounds fair, but it is dangerous. In New York, over 15 percent of all revenue comes from just 2,000 taxpayers. The richest five percent carry 60 percent of the household. An exodus of this group would create major problems for the city’s finances.
“If we lose even a few thousand of these people, tax revenues will shrink dramatically,” investment banker Euan Rellie told the Times in London. Rellie votes for the Democrats and believes the state can invest in infrastructure. But local taxes would have unintended side effects. Many people from the financial sector fled the city during the pandemic. “The question is, do some of them say, ‘Fuck it, I’m not going back.'” Analyzes of cell phone data show that the city has lost around 70,000 residents. Even if there is no reliable data, it is assumed that there are many wealthy people among them who have moved to a second residence outside the city.
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Top career
Highly paid, but deadly unhappy: the misery of the rich and successful
11.03.2019
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Home office makes it possible
Historically, there are studies that suggest that local tax rates don’t make people move, Rellie said. But today he fears that these old rules will no longer apply. If you wanted to avoid the high costs of the city in the past, you also cut yourself off from the city’s economic possibilities. It wasn’t worth it. In the financial industry that is so important to New York today, however, anyone can work from home. Even companies do not necessarily have to be located in a specific zone.
One of the fugitives is the investment banker Christopher Wheeler. Crime and pandemic have already displaced him, his wife had wanted to move for a long time, he told the newspaper. When young men started racing motorcycle races in front of his Central Park apartment during the pandemic, that was enough. The couple still keep their apartment in the city, but not much longer. He wants to sleep at night and “not have crazy people dragging 59th Street”.
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Tech-Branch
Texodus – why billionaires like Elon Musk and companies like Oracle are fleeing California
19.12.2020
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The tax hikes would make an already very expensive city even more expensive. “What Governor Cuomo and the people of Albany don’t understand is that, as is happening in California, they’re killing themselves by raising prices,” said Wheeler. In Silicon Valley, the phenomenon is called Texodus – young companies are moving to Texas to avoid the high taxes and extreme real estate prices in California.
Fear of social unrest
The individual tax rates don’t look that dramatic at first. But they just add up to 52 percent. Wednesday Martin, author of Primates of Park Avenue, affirms wealthy families are leaving town. “I see you go to Dallas, Texas,” she said. “I see you go to Palm Beach, Florida. Or Aspen.” And those who don’t go look for a second residence as a place to jump. It’s not just about the tax issue. Martin is convinced that although New York elects democratically, the rich are conservative. They see the Black Lives Matter movement in particular as a threat.
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G7 return comparison
“Stupid German Money” study confirms Wall Street prejudice against German investors
Video01:00
10.07.2019
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Now what happened in New York in the 1970s could repeat itself. Back then, the wealthy whites moved to the suburbs. “Because they wanted to escape what they perceived to be urban decay and the reality of a racially diverse city.”
This was followed by a blossoming of artistic life in New York, but also neglect and impoverishment. Crime and the disintegration of entire neighborhoods.
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