“He’s planning to pay for these proposals with various tax hikes, including a large jump in the city’s corporate tax rate from 7.5 percent to 11.5 percent.
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Unfortunately, raising the corporate tax rate could also hinder the job market, cause corporations to relocate, and decrease long-term government revenue, potentially damaging New York’s status as the financial capital of the world.
Corporations hit with higher tax rates would seek ways to cut costs, possibly harming workers through either layoffs or lower wages.
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In the United Kingdom, for example, around one in six British companies cut hiring in the fourth quarter of 2024 in anticipation of tax hikes that took place in April 2025. If New York employees aren’t directly laid off, they could face lower wages in the long run.
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Already, the exodus of banks from Wall Street to corporate tax havens, such as Elliot Management’s relocation to Florida, has cost the city millions in managed assets. New York City simply cannot afford to watch other businesses follow.
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“”Businesses have only three options to pay for higher taxes: raise prices; reduce costs; or lower returns to investors,” as the authors of the U.S. Chamber of Commerce report wrote. “In reality, they do all three.” The fourth option, one even more feasible if a tax hike only hits New York City, is that businesses will flee.”