New York raises its taxes, the super rich are targeted

UNITED STATES

The state approved an increase for those who earn more than a million dollars a year and has also introduced two new tariffs to target the wealthy who live in the Big Apple.

New York raises its taxes, the super rich are targeted
© AP/Bebeto Matthews

New York raises its taxes, the super rich are targeted

© AP/Bebeto Matthews

A hard knock for the big names who live in the Big Apple: in addition to state taxes, those to be paid to the City will be faced with a tax rate between 13.5% and 14.8%, the highest in America.

If federal taxes are also included, the marginal rate, according to the estimates of some experts, rises to 51.8%, higher than that of European countries with higher taxation. A hefty bill that risks to trigger a breakaway from the city that for years has prided itself on being the capital of world wealth, ambition and success.

In fact, New York is no longer the world capital of billionaires: over the last year - according to Forbes - it was overtaken by Beijing, which boasts 100 super rich individuals thanks to 33 billionaires ‘earned’ in 2020. The Big Apple instead has added only seven, for a total of 99.

The great Chinese takeover, some observers believe, could be just the beginning. The raising of the tax burden could, in fact, trigger a 1970s-style flight from the city, when many high rollers chose Florida and its low taxes.

The temptation for millionaires is undeniably strong: the wounds of Covid are evident in a New York devoid of the lights of Broadway, fashion and its bars. Without counting the closed offices and the huge issue of whether they will reopen.

While Florida is watching from afar, behind the scenes it has launched its offensive: in addition to low tax rates and better weather conditions, the state is courting banks, companies and multinationals to convince them to relocate or at least relocate part of their offices.

Miami’s mayor aims to turn the city into a tech and cryptocurrency hub, trying to replicate the success of Silicon Valley. According to many New Yorkers, Florida’s flaw is the absence of cultural life and above all the fact of being a Republican state, where one of the ‘most disliked New Yorkers’, former President Donald Trump, resides.

And so the prices of Texas have recently risen: the liberal Austin, a university city chosen also by Elon Musk, the patron of Tesla, has favored it over California.

At the moment it is not easy to foresee a return to normality in New York, or at least a new normal to be defined, also for political reasons. If on the one hand the elections to replace Bill de Blasio as mayor of the city are approaching, on the other hand there is the criticism of Andrew Cuomo.

The governor is the creator of the tax increase as part of a 212 billion dollar budget package that also includes the legalization of online betting.An increase that he has opposed for years but now, weakened by the sexual abuse scandal, he has been forced to accept ignoring the appeals of the financial community which is concerned about its impact on the state and the city, who without action risk - as outlined by the front page of the New York Post - a «devastating future».

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