In a not-so-startling turn of events, financial firms have been deserting the high-tax, urban jungles of New York and California, heading south to Texas and Florida, two states renowned for their no-income-tax policies and pro-business environments. The latest analysis from Bloomberg News indicates that these financial powerhouses have drained a whopping one trillion (with a fat T) in assets from both states.
This isn’t just a tale of states losing out on major revenue. It’s about high-paying jobs vanishing, city and state finances gasping for breath, and tax revenues drying up. The list of defectors includes some heavy hitters: Elliott Management, Alliance Bernstein, and even Charles Schwab.
But can we blame them? If a firm’s employees can effectively work remotely, why not jump on the dream property at low interest rates? Why bear the brunt of high urban taxes when they can just as well set up in states with sunnier economic forecasts?
And it’s not just about finances. The promise of warmer weather, affordable housing, and a better quality of life beckons. According to Bloomberg, from 2020 to March 2023, over 370 investment companies managing around 2.7 trillion dollars in assets made their big move. With high commercial vacancy rates haunting cities like New York, LA, San Francisco, and Seattle, it’s no wonder that businesses are looking for greener pastures.
Moreover, it’s not just the businesses. The ordinary American citizen is voting with their feet too. A Bank of America analysis suggests a growing number are moving southwards to places like Florida and Texas. San Francisco’s property crime surge and New York City’s declining population by 4% over three years amplify the alarm bells ringing for these once highly coveted metropoles.
Business owners, amid the backdrop of soft-on-crime policies and skyrocketing property prices, seem to be echoing a simple sentiment: Why deal with urban chaos when you can have cheaper housing, lesser taxes, and a pro-business environment elsewhere?
By the looks of it, the southward migration trend isn’t ending anytime soon. And to those left wondering if this is some new age Doom Loop, well, who doesn’t love a good old sprinkle of doom in their morning coffee?
#FinancialExodus #SouthwardShift #StateTaxEscape
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