NY's wealth tax battle is turning into a state vs. city showdown: Partnership for NYC's Steven Fulop

Summary

• Steven Fulop warns that proposed wealth taxes in New York could trigger an exodus of businesses and high-net-worth individuals to lower-tax states, citing Apollo's recent pivot away from expansion as a direct example.
• He identifies the FEPS rental assistance program—a unique New York entitlement growing at 4% per month—as a core driver of budget deficits despite tax revenues running $3 billion ahead of projections.
• Tax rates in New York are already high, with marginal rates approaching 60% for some, and the top 1% paying over 40% of state taxes.
• Companies like American Express and Bank of America are still committing to New York with new buildings or leases, but the mayor's rhetoric focusing on labor over corporate gratitude is perceived as anti-business.
• JP Morgan now has more employees in Texas than in New York, illustrating a trend of gradual corporate relocation that may accelerate.
• Fulop disputes Bernie Sanders' wealth tax calculations, calling them "fabricated" for using unrealized gains as a tax base, while acknowledging the political appeal amid wealth inequality concerns.
• The battle is framing up as a state vs. city showdown, with Governor Hochul pressured by progressive rallies and business voices, risking policy instability.
• If tax increases are enacted, they could exacerbate affordability crises and reduce long-term revenue by driving away wealth and employers.
• The disconnect between progressive politics and economic reality risks harming New York's competitiveness, with firms increasingly considering relocation options.
• Market implication: Uncertainty around New York tax policies may disadvantage locally concentrated businesses and benefit regions with lower taxes and operational costs.