4 ms·

The wealth is not spread. The same few companies still control that $2T, they just moved their offices. All that happened is that now NY&CA lost some jobs/tax r

The wealth is not spread. The same few companies still control that $2T, they just moved their offices. All that happened is that now NY&CA lost some jobs/tax revenue.

lotsofpulp 3y ago
Did they even lose tax revenue other than income tax from some admin jobs? Most states have moved to market based sourcing rules for corporate taxes, so revenue is taxed where the services are received. If the clients are still in CA/NY, I presume it does not change much. In either case, changes in income quintile/decile would be a better measure than whatever this article is supposed to show.
- koolba 3y ago
  > Did they even lose tax revenue other than income tax from some admin jobs? There's no doubt that there is more to lose than just the direct job losses. There's the GDP impact of those people traveling to the city, eating lunch, taking out clients, sticking around after work to socialize. It's not easy to put a number on it but it's definitely much larger than just the direct income tax losses. > Most states have moved to market based sourcing rules for corporate taxes, so revenue is taxed where the services are received. If the clients are still in CA/NY, I presume it does not change much. It doesn't work like that for managing assets as the client is delivering the assets to the manager in their jurisdiction. Where the manager's revenue is taxed is based on the location of those employees and the company headquarters. Not where the customer assets came from.
  - User23 3y ago
    I assume their vig is at least 1% if not higher too so that’s at least 20 billion in management fees. If I recall correctly NYC has a 1% income tax so the City alone is missing out on 200 million a year in tax revenue. Edit: thanks for the correction
    - woodruffw 3y ago
      FTR: NYC's income tax ranges between 3.078% and 3.876%.
  - lotsofpulp 3y ago
    While not as authoritative as I would like, a quick search came up with this: https://www.mhmcpa.com/insights/article/evaluating-economic-nexus-market-based-sourcing-for-your-funds https://www.mhmcpa.com/insights/article/evaluating-economic-... > States are currently electing to move from performance-based sourcing methods to market-based sourcing, which may prove difficult for PE/VC firms that will be required to allocate management fees to the home states of their investors rather than where they conduct business. The management company may be considered to have economic nexus in a state where its fund’s investors are located if management fees are allocated to those states and economic nexus thresholds are exceeded. https://rsmus.com/insights/services/business-tax/state-nexus-and-apportionment-issues-facing-fund-management-comp.html https://rsmus.com/insights/services/business-tax/state-nexus...
    - koolba 3y ago
      > The management company may be considered to have economic nexus in a state where its fund’s investors are located if management fees are allocated to those states and economic nexus thresholds are exceeded. Ha! One cannot even imagine the wave of litigation that will fight this effort. I don't see the States winning the cases either.
      - lotsofpulp 3y ago
        Market based sourcing rules have been in effect for many years now. Any litigation would have already happened.
- Justsignedup 3y ago
  I believe a big chunk of the NY city budget is property taxes on the big boi buildings all over, as well as private houses. This is why NY is squeezing so hard on things like parking tickets and the MTA, because they are having budgeting issues :( Remember that time where they were overly aggressive ticketing people for seatbelt usage (I loved that because it made people actually buckle up) and it was 100% because they needed revenue.
sarajevo 3y ago
It also creates jobs in Florida and Texas…
- lockhouse 3y ago
  Yeah, but they vote the “wrong” way so they’re not important. /s
- toomuchtodo 3y ago
  How many Walmart's worth? (Not a joke, genuine question) Big numbers are meh and for the clicks, just tell us what the aggregate state income tax delta is (federal taxes still getting paid). It's not a total loss, people will still move and work in the locales these jobs moved from, as well as pay property taxes (as real estate prices and rents aren't going down in CA and NY from all available data). If California and New York want those dollars back, extract it through the federal government and the top 40% of taxpayers who pay federal income tax and can't avoid it (congresscritter hustle). You know, like red states do [1]. (tangentially, this will not age well when Texas and Florida come with their hands out for climate costs [2] [3]; grab those bootstraps y'all) [1] https://wallethub.com/edu/states-most-least-dependent-on-the-federal-government/2700 https://wallethub.com/edu/states-most-least-dependent-on-the... [2] https://www.marketwatch.com/story/florida-and-texas-are-expected-to-take-the-biggest-economic-hit-from-climate-change-2018-04-24 https://www.marketwatch.com/story/florida-and-texas-are-expe... [3] https://www.science.org/doi/10.1126/science.aal4369 https://www.science.org/doi/10.1126/science.aal4369
- MisterBastahrd 3y ago
  Not enough to even notice. I live in Texas. They always have some blurb about X company moving to Dallas and "creating" 500 jobs, and that's the last time you hear about them until they pop up in a WARN notice.
edgyquant 3y ago
Sounds like spreading the wealth to me
smolder 3y ago
It seems you're talking about different senses of spreading. Geography versus economic structures.
deleted 3y ago
[deleted]

The wealth is not spread. The same few companies still control that $2T, they just moved their offices. All that happened is that now NY&CA lost some jobs/tax revenue.

lotsofpulp 3y ago

Did they even lose tax revenue other than income tax from some admin jobs? Most states have moved to market based sourcing rules for corporate taxes, so revenue is taxed where the services are received. If the clients are still in CA/NY, I presume it does not change much. In either case, changes in income quintile/decile would be a better measure than whatever this article is supposed to show.

koolba 3y ago
> Did they even lose tax revenue other than income tax from some admin jobs? There's no doubt that there is more to lose than just the direct job losses. There's the GDP impact of those people traveling to the city, eating lunch, taking out clients, sticking around after work to socialize. It's not easy to put a number on it but it's definitely much larger than just the direct income tax losses. > Most states have moved to market based sourcing rules for corporate taxes, so revenue is taxed where the services are received. If the clients are still in CA/NY, I presume it does not change much. It doesn't work like that for managing assets as the client is delivering the assets to the manager in their jurisdiction. Where the manager's revenue is taxed is based on the location of those employees and the company headquarters. Not where the customer assets came from.
- User23 3y ago
  I assume their vig is at least 1% if not higher too so that’s at least 20 billion in management fees. If I recall correctly NYC has a 1% income tax so the City alone is missing out on 200 million a year in tax revenue. Edit: thanks for the correction
  - woodruffw 3y ago
    FTR: NYC's income tax ranges between 3.078% and 3.876%.
- lotsofpulp 3y ago
  While not as authoritative as I would like, a quick search came up with this: https://www.mhmcpa.com/insights/article/evaluating-economic-nexus-market-based-sourcing-for-your-funds https://www.mhmcpa.com/insights/article/evaluating-economic-... > States are currently electing to move from performance-based sourcing methods to market-based sourcing, which may prove difficult for PE/VC firms that will be required to allocate management fees to the home states of their investors rather than where they conduct business. The management company may be considered to have economic nexus in a state where its fund’s investors are located if management fees are allocated to those states and economic nexus thresholds are exceeded. https://rsmus.com/insights/services/business-tax/state-nexus-and-apportionment-issues-facing-fund-management-comp.html https://rsmus.com/insights/services/business-tax/state-nexus...
  - koolba 3y ago
    > The management company may be considered to have economic nexus in a state where its fund’s investors are located if management fees are allocated to those states and economic nexus thresholds are exceeded. Ha! One cannot even imagine the wave of litigation that will fight this effort. I don't see the States winning the cases either.
    - lotsofpulp 3y ago
      Market based sourcing rules have been in effect for many years now. Any litigation would have already happened.
Justsignedup 3y ago
I believe a big chunk of the NY city budget is property taxes on the big boi buildings all over, as well as private houses. This is why NY is squeezing so hard on things like parking tickets and the MTA, because they are having budgeting issues :( Remember that time where they were overly aggressive ticketing people for seatbelt usage (I loved that because it made people actually buckle up) and it was 100% because they needed revenue.

sarajevo 3y ago

It also creates jobs in Florida and Texas…

lockhouse 3y ago
Yeah, but they vote the “wrong” way so they’re not important. /s
toomuchtodo 3y ago
How many Walmart's worth? (Not a joke, genuine question) Big numbers are meh and for the clicks, just tell us what the aggregate state income tax delta is (federal taxes still getting paid). It's not a total loss, people will still move and work in the locales these jobs moved from, as well as pay property taxes (as real estate prices and rents aren't going down in CA and NY from all available data). If California and New York want those dollars back, extract it through the federal government and the top 40% of taxpayers who pay federal income tax and can't avoid it (congresscritter hustle). You know, like red states do [1]. (tangentially, this will not age well when Texas and Florida come with their hands out for climate costs [2] [3]; grab those bootstraps y'all) [1] https://wallethub.com/edu/states-most-least-dependent-on-the-federal-government/2700 https://wallethub.com/edu/states-most-least-dependent-on-the... [2] https://www.marketwatch.com/story/florida-and-texas-are-expected-to-take-the-biggest-economic-hit-from-climate-change-2018-04-24 https://www.marketwatch.com/story/florida-and-texas-are-expe... [3] https://www.science.org/doi/10.1126/science.aal4369 https://www.science.org/doi/10.1126/science.aal4369
MisterBastahrd 3y ago
Not enough to even notice. I live in Texas. They always have some blurb about X company moving to Dallas and "creating" 500 jobs, and that's the last time you hear about them until they pop up in a WARN notice.

edgyquant 3y ago

Sounds like spreading the wealth to me

smolder 3y ago

It seems you're talking about different senses of spreading. Geography versus economic structures.

deleted 3y ago

[deleted]