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New York’s golden geese are flying south, and not just for the winter.
The analytics firm Unacast reports that more than 3 million have fled the city during the pandemic — replaced by slightly fewer who earn a lot less, for a net reduction in income of some $34 billion. Its estimates, based on cellphone data, may be off a bit, but signs that higher earners have left town are everywhere.
And top businesses are eyeing the exits, too. Deutsche Bank AG is the most recent in a long line of major companies looking to escape the tax-heavy, high-cost city to set up headquarters in friendlier business climates such as Florida and Texas.
The German investment bank is considering moving nearly half of its 4,600 Manhattan staffers to smaller hub cities around the country over the next five years, exploiting the newly discovered convenience of remote work.
Just last week, Goldman Sachs announced it’s looking to move its asset-management arm, which generates $8 billion a year of revenue for the city.
And billionaire Paul Singer is already moving the headquarters of his $41 billion hedge fund Elliott Management from Manhattan to Florida.
These are repeated blows to the tax base. The securities and trading industry accounted for 18 percent of state and 6 percent of city tax receipts last year — while its workers spend to the benefit of other businesses.
The reasoning behind the exodus is obvious. Top earners are already taxed out the wazoo, with lawmakers now looking to add to that burden.
Meanwhile, the pandemic has proven that being in the office isn’t all that important. A greater share of Manhattan office space is fully vacant than any time since right after 9/11, Bloomberg News reports.
If the political class doesn’t rethink its “milk the cash cows” model of governance, the exodus will only grow — and the state and city budget crises deepen.
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