David Solomon, chief executive officer of Goldman Sachs, has warned New York City leaders that they cannot take it for granted as a global business destination and that higher taxes threaten to make it worse. less attractive to companies and their employees.
In an interview at the Financial Times Global Banking Summit, Solomon said “New York is not going away” but warned “nor is it guaranteed to any urban center that you have a permanent place in the world”.
“New York has to be aware that there are good options, and it has to make sure it retains its sublime appeal,” says Solomon. “At the end of the day, incentives matter, taxes matter, cost of living matters.”
Solomon’s comments come after the coronavirus pandemic prompted some New York residents to move to lower-tax states like Florida, amid stress about how the city taxes high earners.
New Yorkers already pay some of the highest taxes in the US, and the highest personal income tax rate for state residents will increase further to 66.2% under the latest version of the Construction law. better than that of president Joe Biden, according to a analysis of the Tax Foundation, an American consulting organization.
In March, Solomon was one of about 250 executives who signed the contract letters for Andrew Cuomo, then governor of New York, and state legislators opposed to raising corporate and individual taxes.
Goldman, which has about 43,000 employees, is headquartered in New York but has expanded in places like West Palm Beach, Florida and Dallas, Texas – the two states where the highest taxes under the changes proposed by Biden would is 51.4%.
“We believe in that flexibility, giving people choice about where they want to live,” says Solomon.
Meanwhile, he predicts that the pressure to increase wages in the US, makes Goldman get a raise Wages for younger bankers earlier this year, will eventually decline.
“We are in a place here where what you are seeing in the financial sector is similar to what you are seeing in almost any industry in general. I don’t think it’s permanent,” said Solomon.
He also reaffirmed Goldman’s plans to expand in China despite escalating geopolitical tensions between the Biden administration and Beijing.
“My own view is that there will be challenges in that relationship and that could have a short-term impact on some of the activities that we will or will not engage in in China,” he said.
“But broadly speaking, with a 10 or 20-year vision, our business in China will grow.”
