WASHINGTON, D.C. — Today, Dr. Charles Swenson of the University of Southern California’s Marshall School of Business released a study analyzing the economic effects of a proposal to increase the carried-interest capital-gains tax rate in New York.
Dr. Swenson finds that imposing such a massive tax would:
- Cause an exodus of the private funds industry from New York;
- Result in a loss of 370,000 New York jobs; and
- Result in New York state and local governments losing $4.5 billion annually in tax revenues that are currently used to fund social programs and infrastructure projects.
This year, officials in New York proposed a 17 percent tax increase on carried-interest capital-gains. Combined with existing New York state taxes, New York City income taxes, and federal taxes, the overall tax rate would rise as high as 72.496 percent on the industry, amounting to one of the highest tax rates in the world.
Although Governor Cuomo and state legislators in Albany recently pulled the proposed tax increase late last month, the results of the study stand as a stark warning for future leaders in New York to fully consider the drastic effects of this massive tax hike.