“Taxes Redraw America’s Economic Map”: US Corporate Giants Flee New York and California for Texas and Florida

New York’s high taxes and tighter regulations intensify Wall Street’s exodus
Texas and Florida attract New York defectors with tax advantages and financial infrastructure
Southern corporate belt expands into technology, energy and real estate

The functions and workforce of the US financial industry, long concentrated in New York, are rapidly migrating south toward Texas and Florida. Dallas has overtaken New York in the share of employment accounted for by finance, insurance and real estate, while hedge funds and wealth managers have established a succession of outposts in Miami and West Palm Beach. After absorbing a wave of California companies over the past decade, the Sun Belt is now setting its sights on Wall Street capital and high-income professionals.

Texas Overtakes New York in Financial-Sector Employment Share

According to The Washington Post on August 10, Texas is ushering in the era of “Y’all Street”—a portmanteau of “Y’all,” a colloquial expression associated with the American South, and “Wall Street”—by drawing global financial firms and talent with generous tax incentives, regulatory easing and legislation designed to curb lawsuits. Derived from the Texan greeting “Howdy, y’all?,” the term reflects the state’s rapid ascent as a rival to Wall Street. The Dallas Observer, a local media outlet, reported last month that regional officials were even considering renaming an actual street “Y’all Street,” accompanying the story with an image of Wall Street’s bull ensnared by a lasso.

According to the Federal Reserve Bank of Dallas, which covers Texas, financial-sector employment in Dallas has surged 23.2% since February 2020. That far outpaces New York City’s 6% growth over the same period and stands in sharp contrast to Chicago, Boston and San Francisco, where financial employment has yet to recover to pre-pandemic levels. As of June this year, Dallas had 317,000 workers in finance, insurance and real estate, accounting for 10.1% of total employment and surpassing New York City’s 9.9%.

From Goldman Sachs to Apollo, the Texas Migration Accelerates

Major financial institutions are expanding their presence at a breakneck pace. Goldman Sachs is building a Dallas office campus capable of accommodating more than 5,000 employees, which will become its largest US site outside its New York headquarters. The firm also recruited former Dallas Fed President Robert Kaplan last year as part of its expansion strategy. JPMorgan Chase employs 30,000 people in Texas, its largest workforce in any US state. Bank of America is constructing a major office complex in Dallas, while Wells Fargo has opened a large campus in Las Colinas, an affluent residential district near Dallas Fort Worth International Airport.

Morgan Stanley and Apollo have also joined the migration. Morgan Stanley is considering a $1.33 billion office hub in Uptown Dallas. If approved, the project would create 3,800 jobs by 2035 and as many as 4,800 by 2039. Apollo has selected Austin as a strategic hub that will serve as its second headquarters, concentrating new business operations and recruitment in asset management, retirement services and financial technology there. An Apollo spokesperson said the decision “reflects the profile of the talent we intend to recruit and our corporate vision,” adding that “most of the new employees required for future growth will be hired at the second headquarters.”

Hedge Funds and Wealth Managers Shift to Florida

While Texas draws the operating divisions and technology workforces of major banks, fellow Sun Belt state Florida is expanding the foundations of “Wall Street South” around hedge funds and wealth management. Activist hedge fund Elliott Investment Management relocated its headquarters from Midtown Manhattan to West Palm Beach in 2020. New York-headquartered BlackRock has also opened a satellite office in West Palm Beach, assigning senior executives and dozens of employees to the location. Citadel and Citadel Securities moved their global headquarters to Miami in 2022 and have since assembled a workforce of about 500 in Brickell. Founder Ken Griffin has reinforced his long-term commitment to Miami by pursuing construction of a permanent 54-story headquarters spanning 1.7 million square feet.

The banking sector has also begun moving core divisions to Florida. Wells Fargo relocated the headquarters of its wealth management division to West Palm Beach in January and leased 50,000 square feet of office space in the One Flagler building. According to Bloomberg, the division—which generated $16 billion in revenue in the previous year, equivalent to one-fifth of groupwide revenue—plans to station about 100 senior executives there by year-end. The move reflects Wells Fargo’s strategy to secure affluent and ultra-high-net-worth clients who have relocated to Florida. With Citadel and Elliott having already moved investment capital and executives, the arrival of a major bank’s wealth management headquarters has further increased the financial concentration along the “Wall Street South” corridor linking Miami and West Palm Beach.

Table 1. New York State and New York City Corporate Tax Regime

Wall Street Rattled by the Election of ‘Socialist’ Mayor Mamdani

The catalyst that accelerated the exodus from New York was Zohran Mamdani’s election as mayor of New York City last November. A self-described democratic socialist, Mamdani pledged to add 2 percentage points to the city income tax rate on annual income above $1 million and raise taxes on large corporations to finance public services. JPMorgan Chase Chairman Jamie Dimon and Pershing Square Chairman Bill Ackman expressed a willingness to cooperate after the election, yet apprehension across the financial sector persisted. Concerns over the city’s tax and regulatory direction intensified when Mamdani appointed former Federal Trade Commission (FTC) Chair Lina Khan as a co-chair of his transition team.

Proposals to raise the millionaire income tax and corporate taxes remain subject to approval by the state government and legislature, but Wall Street has incorporated the prospect of a heavier tax burden into its business planning. New York’s corporate tax burden already ranks among the highest in the country. In 2021, New York State raised the corporate franchise tax rate from 6.5% to 7.25% for companies with annual business income exceeding $5 million, and Governor Kathy Hochul extended the rate through the end of 2029 in the fiscal 2026–2027 budget enacted in May. Financial corporations operating in New York City are also subject to an 8.85% city business corporation tax and a Metropolitan Commuter Transportation District surcharge. After accounting for deduction mechanisms, the combined nominal top rate imposed by the state, city and metropolitan transportation district reaches 17.44%, the highest in the United States, while the 21% federal corporate income tax is levied separately.

Florida’s Battle for Wall Street

New York’s high-tax regime has ignited a contest between Texas and Florida for Wall Street firms. Two days after Mamdani’s election, the Business Development Board of Palm Beach County placed an advertisement in New York’s Times Square evoking a breakup with the city and prominently featuring the phrase “Wall Street South.” The campaign highlighted Florida’s lack of a personal income tax alongside the hedge fund and wealth management ecosystem established in Miami and West Palm Beach, signaling an effort to divert financial firms and wealthy individuals bound for Texas toward Florida. The board said inquiries from companies considering relocation surged after Mamdani’s election.

Boca Raton Mayor Scott Singer also courted New York business leaders directly, emphasizing that they could cut office operating costs by about 30% and pay no state or local personal income tax. Singer cited the city’s corporate ecosystem, home to more than 40 publicly traded companies, as well as low property taxes and access to major universities and international airports as additional incentives. In a Times Square advertisement this month, the Florida Chamber of Commerce called Mamdani Florida’s “Economic Developer of the Year,” taking direct aim at New York’s tax increases. The advertisement satirized the extent to which higher taxes and tighter regulations in New York had supported Florida’s efforts to attract companies and wealthy residents, turning the Mamdani administration’s policy agenda into a corporate recruitment tool.

Texas Courts Wall Street with Tax and Trading Infrastructure

Texas has pursued Wall Street more aggressively by mobilizing both tax policy and financial infrastructure. In July last year, the Texas Association of Business (TAB) published an open letter titled “Escape New York,” urging Wall Street firms to relocate their headquarters because “it’s time to move from Wall Street to Y’all Street.” In November that year, Texas voters approved a constitutional amendment barring state and local governments from taxing specified securities transactions or imposing related occupational taxes on market operators, including exchanges. The measure strengthened the tax certainty needed to attract financial firms. The Texas Stock Exchange (TXSE), which began trading in Dallas last month, has added further momentum to the campaign by combining tax advantages with proprietary trading infrastructure.

While New York layers state and city taxes, Texas and Florida have concentrated their policy efforts on reducing fixed tax burdens for individuals and businesses. Texas imposes neither a personal income tax nor a conventional corporate income tax. Instead, it levies a franchise tax on corporate margins calculated after deductions for items such as payroll and the cost of goods sold. Beginning with 2026 filings, businesses with annualized total revenue of no more than $2.65 million have no tax liability, while the general rate is set at 0.75% and the rate for retail and wholesale businesses at 0.375%. Florida also has no personal income tax, and its 5.5% corporate income tax rate is substantially lower than New York’s combined state and city rate. Both state governments offer expedited permitting, relocation subsidies and tax credits tied to employment and capital investment, reducing the costs and administrative burdens associated with moving corporate headquarters.

Half of Companies Relocating to Texas Came from California

Texas and Florida’s aggressive drive to attract New York companies is rooted in their experience drawing businesses out of California. An analysis by the Texas Comptroller of Public Accounts using data from the Governor’s Office of Economic Development and Tourism found that 157 of the 314 companies that moved their headquarters to Texas between 2015 and 2024—exactly half—came from California. Those companies created 3,475 new jobs. Among all relocated companies, 154 moved to the Dallas–Fort Worth area, 97 to the Austin area and 41 to the Houston area. A survey by global commercial real estate services company CBRE identified the business environment, including low taxes and investment incentives, as the most frequently cited reason for headquarters relocations. Access to talent, real estate costs, and proximity to customers and supply chains were also cited as major factors.

The corporate migration has spread across technology, finance, real estate and energy. CBRE moved its headquarters from Los Angeles to Dallas in 2020, while Hewlett Packard Enterprise (HPE) relocated its executive headquarters from San Jose to Spring, near Houston, in the same year. Tesla moved its headquarters from Palo Alto to its Austin Gigafactory in 2021. US oil company Chevron transferred its headquarters from San Ramon to Houston in 2024 and plans to move about 180 additional employees in legal, information technology, cybersecurity and engineering this year. Online real estate platform Realtor.com moved its headquarters from Santa Clara to Austin last year and designated the city as its top-priority recruitment market.

Florida has attracted a succession of investment management, software and quantum computing companies. Global investment firm Colony Capital relocated its headquarters from Los Angeles to Boca Raton in 2021 and changed its name to DigitalBridge that same year. In 2024, enterprise planning software provider Anaplan moved its global headquarters from San Francisco to Miami. Quantum computing company D-Wave joined the migration this year. In January, D-Wave announced that it would relocate its Palo Alto headquarters and core US research and development operations to Boca Raton by year-end. The new hub will bring together research, testing and technical support teams, while the company’s next-generation Advantage2 quantum computer will be installed at Florida Atlantic University’s Boca Raton campus.