Who would have even imagined it? After New York‘s tax regime resurrected the tax on stock transactions, yet another company is considering moving one of its key activities from New York to Florida. This is Goldman Sachs Group Inc., the American multinational investment bank based in the city that never sleeps, which is considering moving its Asset Management operations to the Sunshine State.
Because of course, there seems to be nothing more coherent and intelligent than, in the midst of the global economic crisis, increasing the tax burden on your banks and finance companies, which were, by the way, already rather stifled. New York rules.
According to a report by Blomberg, “executives (at Goldman Sachs) have been searching for office locations in South Florida, talking to local authorities and exploring tax advantages while considering creating a base there for their asset management arm.”
The article notes that, in light of Goldman Sachs’ success with remote working during the pandemic, members of the management team were convinced of being able to “pull more jobs out of the New York area to reduce costs” and also avoid that tax regime that is stifling to New York businesses so badly.
Still, New York City can “breathe a sigh of relief” as Goldman Sachs has not yet decided where to take its Asset Management business. Perhaps they will not go to Florida, the destination might very well be Dallas, where the company has already begun to accelerate its expansion, informed Blomberg.
But New York may fall even lower: they may lose financial centralization
Beyond the derision on this sensitive issue, the reality is that the situation is tragic, as New York City is in a state of great uncertainty. The New York state maelstrom is annihilating not only the economy, but also individual freedom, and with it, economic freedom.
That’s why New York restaurants today are struggling to stay afloat. The state tells them that they can only open up to a certain schedule, and this affects their logistical and revenue capabilities, hurting the owners and also the night employees, who see their working hours reduced.
The same goes for the financial sector, tired of (and burdened by) the tax system. But if there’s a long face on one side, there’s a smile on the other: Florida. If the partial move of Goldman Sachs’ operations to Miami, Florida were confirmed, the city would have advanced in its aspirations to become the financial center of the southern United States of America, decentralizing the New York financial structure.
This is not only a triumph for those who defend economic freedom, but also great news for the United States. Free competition between states may force New York City to look back and notice that its rules of the game are failing.
In that sense, there’s a hard fact from Blomberg: “Manhattan now has the highest level of office space available since the September 11 attacks,” and this happens basically because companies are evaluating and accelerating moves. It’s also the effect of the unmitigated economic crisis.
Furthermore, when it comes to staying in the market and increasing productivity, sentimentality matters little. Companies (including Goldman Sachs which became famous in New York) will have no qualms about leaving their original cities in search of benefits for their owners and employees.
The American dream for Goldman must still stand, especially when the idea, set for this year, was to reduce costs by some $1,3 billion. Miami may be the key to this.
Florida -and Miami- are awaiting Goldman Sachs with open arms
As stated on Infobae, “Miami has diversified its job offerings over the last few years. There is no doubt that tourism and real estate development continue to be the financial engine of the city, but recently a technological hub, a biomedical hub and the financial industry have begun to grow.” In addition, much of the money that moves between the United States and Latin America passes through Miami.
Yet, there is a great ambition for this city that seems closer: to become the main financial center of the south of the country. And if Goldman Sachs chooses Miami, the city will be much closer to becoming the Wall Street of the South.
This is something that will undoubtedly benefit the state, the city and all its inhabitants. However, great economic ambitions also require a lot of work on quality of life and services. Miami, and Florida in general, must continue to work to become an even more attractive place than they are already is.
Somewhat desperate statements
Without a doubt, the leaks of Goldman Sachs’ possible exit to another state have had a strong impact. Already in 2018 the Alliance Bernstein Holding LP had shocked everyone with its plans to move its headquarters to Nashville. So, while the pandemic is an item that speeds up the move assessment process, it is not new.
That’s why the somewhat desperate statements by Bill Neidhardt, press secretary to the Mayor of New York, are not surprising: “With all due respect to Florida, no place can compare to the concentration of talent, education, innovation and state-of-the-art technology in New York City… The city continues to see new expansion and investment from leading industries, and we expect more to come.”
It is logical that the mayor’s press secretary defends New York, but the reality is that today Miami and the state of Florida are much more attractive for investment than the state and city of New York. Not only because of the differences in the tax regime -in Florida there is no state-level tax- nor because of the infrastructure capacity -Miami is the third largest corporate office center in the country, only behind New York and Chicago- but because of low restrictions.
The “Sunshine State” and Miami today not only represent economic incentive and legal security, but it also has something important on its side: freedom. Its authorities, unlike those in New York, are not interested in attacking individual and economic freedoms. And, gentlemen, it must be said: capital is like people, it goes where they treat it well, and nothing treats you better than freedom. Well, New York’s tax system and Miami’s freedom can make that possible.