Escape from New York: High taxes, regulation result in mass exodus


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Is Albany fiddling while Rome, Utica, Buffalo and Niagara Falls burn?

A report last week by the Empire Center for Public Policy noted that 153,921 more residents moved out of New York than moved in from other states over the 12 months through July 1, new US Census data show. That brings New York’s total “net domestic migration” loss since 2010 to 653,071.

That shocking loss is bigger than in any other state for those years — in both absolute terms and per capita.

Simply put, the great migration means that fewer and fewer people want to live in New York. The state is now on the fast track to lose yet another congressional seat after the next 10-year census.

And it turns out that those fleeing the scene have some pretty good reasons.

Analysts say the state’s crushing tax burden – New York is the highest taxed state in the nation – combined with a lack of jobs, particularly in the moribund Upstate economy, are the two factors most likely to blame for what can only be seen as the mass exodus of residents.

The average burden for state and local taxes in New York is $9,718 a year, which is 39 percent higher than the national average. In many cases, a simple move across state lines can result in a nearly 40 percent reduction in the taxes that a cash strapped a business or individual has to pay.

Businesses large and small have been fleeing New York — and taking their jobs with them — for years, thanks to the state’s reputation for stratospheric taxes and oppressive regulations.

And what is the Albany brain trust’s response to this dire situation?

A raft of new regulations, hefty increases in the minimum wage and other measures that will make it even more difficult to do business and provide employment in New York State, of course.

An increase in the minimum wage for most workers went into effect on Dec. 31, when the hourly rate jumped to $9 from $8.75 as part of a gradual increase passed by the Legislature in 2013.

Base wage that employers must pay to workers who also earn tips also shot up on Dec. 31, and different classes of tipped workers are being consolidated so the hourly rate will increase to $7.50 from between $4.90 and $5.65.

That’s the first increase for those workers since 2011 and restaurant groups are concerned it will increase labor costs and will cause businesses to raise prices to compensate for the jump. The change was approved by Gov. Andrew Cuomo‘s administration last February.

Franchise owners affiliated with fast food chains that have more than 30 locations will face an even bigger hike in the minimum wage they must pay employees, although there is a legal challenge pending.

The minimum wage for fast food employees in New York City went to $10.50, and in the rest of the state, to $9.75 on Dec. 31. The phase-in schedule calls for the minimum wage for these workers to hit $15 an hour in 2018 for New York City and by 2021 statewide.

Of course, sexual politics also plays a great role in Albany’s thinking, and enhanced workplace gender equality protections are slated to go into effect Jan. 19.

These include a prohibition against discriminating in employment based on family status and requirements for workplace accommodations for medical conditions related to pregnancy.

As part of the same package, small businesses with fewer than four workers will be subject to the same state rules on sexual harassment as larger businesses. Employees at these businesses were previously unable to file sexual harassment complaints with the state.

And employers sued for discrimination based on sex could be on the hook for attorney’s fees if the employee successfully proves their case. Attorney’s fees could also be awarded in housing and credit discrimination cases based on sex.

A study by the Tax Foundation’s Center for State Tax Policy found that New York’s ranked 49thout of the 50 states in terms of overall business quality, with only neighboring New Jersey faring worse.

But when it comes to easing taxes or rolling back out-of-control regulations, Albany has done little but make things worse.


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