New York is reportedly shedding thousands of jobs to Texas, which is seen as a more business-friendly environment. According to a recent report from the New York City Partnership, Mayor Zoran Mamdani’s initiative to raise corporate taxes may only speed up this trend.
The analysis indicates that Texas’s low-tax approach has effectively attracted businesses, pulling jobs away from financial institutions unhappy with New York’s high taxes and unfriendly business climate.
“New York State already ranks last in tax competitiveness and is among the least favorable states for small business growth,” the report stated.
Mamdani’s proposal would raise the state’s corporate tax rate from 7.25% to 11.5%. Should it gain approval from Governor Kathy Hochul and the Legislature, New York City’s overall corporate rate—which includes various additional taxes—would jump from 17.44% to 22.48%.
In contrast, Texas boasts no corporate or personal income tax, maintaining only a minimal franchise tax of 0.75%. The report also mentions that compared to New York, Texas’s legal environment is less adversarial for businesses, making it simpler to start and manage a company.
The partnership emphasizes that, as a result of these factors, Texas is gradually eroding New York’s status as the hub of American business.
Key findings from the report include:
- By 2024, Texas is expected to have more employees in financial services than New York, excluding insurance and real estate.
- In the last ten years, 23 companies have moved their headquarters from New York to Texas, trailing only California.
- JPMorgan Chase now has more staff in Texas than in New York and plans to double its Fort Worth office capacity by 2027.
- Wells Fargo is set to open a new campus in Dallas in 2025, adding 1,500 office jobs.
- Texas’s financial services sector is projected to grow by 9% in 2025, surpassing New York’s performance.
- Despite its productivity, New York’s financial sector, generating $330 billion in 2024, is growing at a slower rate than Texas’s sector, which has seen a 121% increase in gross regional product over the last decade, compared to New York’s 72%.
- Texas has received approval for a new stock exchange, anticipated to launch by the end of 2026, which will be positioned as a more issuer-friendly and affordable alternative to the traditional exchanges in New York.
“Texas’s success isn’t just about a single tax change; it’s about a comprehensive strategy to attract talent and investment, and New York seems to be missing that,” noted Partnership CEO Steve Fulop. “Our report highlights the reality of the situation and underscores why we are losing ground.”
During the discussion, Mamdani stated that if Governor Hochul and Congress do not raise taxes on wealthy individuals and corporations, property taxes will likely increase.
Hochul, who is aiming for re-election this fall, has expressed her opposition to the tax increase.
Fulop further remarked, “At a time when decisions about growth are becoming more variable, tax policies shouldn’t be viewed in isolation. By focusing solely on taxes, New York is overlooking what other states are proactively doing.”
He added, “You can’t just impose taxes for the sake of it. This pressure on the governor to raise taxes is misguided. While we understand the fiscal challenges, this tactic overlooks larger competitive realities and may have greater costs down the road.”
