On Friday, The Center Square reported the following:
New York City lost nearly 5,000 businesses early last year as employers closed their doors or left for other low-tax states, according to a new report.
The analysis comes as newly elected Mayor Zohran Mamdani pushes to hike business taxes to foot the bill for his agenda.
The report, released Thursday by the Economic Development Corporation, showed more than 3,500 new businesses opened their doors in New York City during the second quarter of the fiscal year but that was offset by a loss of about 8,400 employers. That’s the weakest quarter for business formation since the height of the COVID-19 pandemic, the report’s authors said.
The corporation’s report is the latest to highlight New York City’s shrinking business sector with employers looking to other low-tax states as Albany piles on new regulations and costs.
It also comes as Mamdani seeks to draw up support for higher taxes to pay for plans for universal childcare, tuition free college and free bus service in the city.
Mamdani’s plans call for increasing the state’s top corporate tax rate by about half, up to 11.5% from its current maximum of 7.25%, which has caused concerns among New York City’s business community. If approved, that would match the highest corporate rate in the nation next door in New Jersey. He’s also called for “wealth” tax and a $30 per hour minimum wage for the city.
His ideas will seriously damage the City’s economy.
The article concludes:
In 2023, New York’s effective state business tax rate was 5.9%, making it the ninth-highest in the nation, the report’s authors noted. The state also ranks poorly for individual income, sales, property and unemployment insurance taxes. It has the fourth highest percentage of housing-burdened households in the country, with 38.6% of households spending more than 30% of their income on housing.
Those factors have contributed to outmigration, with New York losing more domestic taxpayers than any other state from 2020 to 2022, according to the report, as residents fled to New Jersey, Florida, and other low-tax states.
The independent businessman is the backbone of the American economy. People who are self-employed don’t work a 40-hour week. People who are self-employed and successful work an 80-hour week. Logically, why would you stay in a state that takes a large percentage of what you work so hard for when you can move to a state with less regulation and lower taxes? That is what has happened in the past, and if Mayor Mamdani implements his policies, we will see more businesses leave New York City.