Full Breakdown
New York's Job Exodus to Texas: The Impact of Corporate Tax Increases
2/18/2026, 4:22:22 AM
Core Event: Job Losses Driven by Tax Policy
New York is experiencing a significant outflow of jobs to Texas, primarily attributed to the state's pro-business tax policies and the proposed corporate tax increases by Mayor Zohran Mamdani. A report from the Partnership for the City of New York highlights that Texas's low-tax environment is attracting corporations and diverting jobs from New York, which is already ranked last in tax competitiveness nationally.
Tax Policy Changes and Their Implications
Mayor Mamdani has proposed raising New York's corporate tax rate from 7.25% to 11.5%. If approved by Governor Kathy Hochul and the state legislature, the combined corporate tax rate in New York City could rise from 17.44% to 22.48%. In contrast, Texas has no corporate or state income tax and a minimal franchise tax of 0.75%. This stark difference in tax policy is a significant factor in the relocation of businesses, with 23 companies moving their headquarters from New York to Texas over the past decade.
Competitive Landscape in Financial Services
The report indicates that Texas has surpassed New York as the state with the highest number of financial services employees, excluding insurance and real estate. In 2025, financial services job postings in Texas were 9% higher than in New York. Major firms like JPMorgan Chase and Wells Fargo are expanding their operations in Texas, with JPMorgan Chase planning to double its workforce in Fort Worth by 2027. Texas's financial services sector has seen a gross regional product growth of 121% over the last decade, compared to New York's 72%.
Criticism of Tax Increase Proposals
Critics argue that Mamdani's push for higher corporate taxes will exacerbate New York's job losses. Steve Fulop, CEO of the Partnership for the City of New York, emphasized that Texas's success is due to a comprehensive strategy to attract jobs and capital, rather than a single tax lever. He cautioned that New York's approach to increasing taxes could lead to long-term economic consequences. Governor Hochul has expressed opposition to tax increases, highlighting the need for a broader perspective on economic growth.
Official Statements & Responses
In response to the report, Mamdani acknowledged the necessity of raising property taxes if corporate taxes are not increased, indicating a challenging budgetary environment. Fulop stated, “You can’t just tax people for the sake of taxing people,” emphasizing the need for a more strategic approach to economic policy.
What's Next: Future Economic Strategies
As New York grapples with these challenges, the state must consider its competitive position against Texas. The ongoing discussions regarding tax policy and economic strategy will be crucial in determining the future landscape of job retention and growth in New York.
Verbatim Quotes
- “New York is already ranked last nationally for tax competitiveness and is consistently ranked among the bottom states for starting a small business and for small business growth,” — Partnership for the City of New York Report
- “Texas isn’t winning because of one tax lever — it’s executing a coordinated, multi-dimensional strategy to attract jobs and capital and NY is falling into their trap,” — Steve Fulop, CEO of the Partnership for the City of New York
- “This approach to pressure the governor [to raise taxes] is a mistake.” — Steve Fulop, CEO of the Partnership for the City of New York
