To borrow a line from Austin Powers: Wall Street has lost its mojo.
Yes, Wall Street is still the financial capital of the world, but for how much longer? Right now, Wall Street has the look of a falling stock.
In years past, there was a worry that London or Tokyo or even Beijing would knock Manhattan off its exalted pedestal as the financial center of the universe.
Fortunately, that never happened. But now the latest threat is clear and present. And it’s coming from … South Florida!
You don’t have to believe me. Listen to billionaire Ken Griffin, who moved the headquarters of his multibillion-dollar hedge fund Citadel from Chicago to Miami last year. Last week, he made a highly publicized prediction that Florida could become the world’s new financial mecca. Why? Because “Miami represents the future of America.”
Then, he adds, Florida “has a political environment that encourages growth.” What a concept.
Griffin has followed in the footsteps of Wall Street icons including Carl Icahn and Paul Singer, both of whom have moved their financial operations from Wall Street to South Florida.
These Americans on the move have taken their money and businesses with them. IRS tax return data tells us that some $50 billion have matriculated out of New York in 2020 and 2021. Meanwhile, Florida has gained that much net income. The skylines in Miami and even Palm Beach and Fort Lauderdale are showing more towering high rises every week. South Floridians are referring to Miami as Wall Street South.
It isn’t just Florida’s bright sunshine and the balmy weather that’s shrinking Wall Street’s footprint. Much bigger factors are the taxes and the anti-capitalism ethic of the bluest of blue states — New York.
It’s always been astonishing to me that the city that wants to retain its financial market supremacy has some of the most punitive taxes on financial capital. New York shares with California the highest tax rates on capital gains, dividends and business income. Those taxes can reach more than 13% (on top of federal taxes) for residents of Manhattan. But in Florida, the state taxes are zero. Nada.
New York’s tax strategy makes as much sense as Iowa imposing high taxes on corn production or the Idaho legislature driving its potato farmers out of business.
— Stephen Moore (in NEWSMAX)