Poking the Wall Street Bear

President and CEO, STA

New York’s financial services industry powers more than the markets. It pumps lifeblood into the economy, funds government budgets and supports charitable organizations that provide social services. Individuals employed at investment banks, broker-dealers, exchanges, registered investment advisors, and asset managers fuel local commerce through their spending on a wide range of businesses and services, from restaurants to every type of retail store; pay state and city income taxes; and make contributions to the hundreds of worthy charities in New York City.

But as remote work reshapes job landscapes and expectations of higher tax rates and a decline in quality of life are coupled with other states’ willingness to compete for businesses and citizens, firms and individuals in New York City are voting with their feet, with more considering a change in where they work and live.

Contribution to State and City GDP

New York has over 500,000 workers in finance (sans insurance) statewide[1], a figure that underscores its dominance over almost all other industries. These mid- to high-earning salaries fuel consumer spending across the state and in NYC. The sector’s direct GDP contribution exceeds $100 billion annually for the state, representing around 8% of New York’s total output, which makes it the second-largest industry after real estate.

In New York City, the story is even starker: finance accounts for over 10% of the metro area’s GDP, with the securities subsector alone injecting billions in economic activity. It’s not hyperbole to call it the city’s monetary monarch; as the New York City Department of Labor[2] notes, securities firms drive the lion’s share of finance’s fiscal footprint, outpacing tech, healthcare, and manufacturing combined in raw dollar impact.

The U.S. Bureau of Economic Analysis[3] pegs finance at the top tier, contributing more to state growth than manufacturing (under 5% of GDP) or retail (under 6%). In NYC, it’s undisputed: the Annual State of the City’s Economy report[4] crowns financial services as the largest contributor, dwarfing healthcare’s employment share with superior wage multipliers. One Wall Street job ripples into several others across hospitality, real estate, and retail, per NYCEDC estimates.

Personal Income Taxes (PIT)

Wall Street’s importance to state and city tax revenue is immense. Personal income tax (PIT) receipts from finance employees fund everything from subways to schools. For New York State, the securities industry generated nearly $20 billion in total taxes in a recent fiscal year, with PIT comprising the majority. This windfall, on average, covers a significant portion of the state’s operating budget[5].

For New York City, the 5-year average of total tax contributions from the securities industry is $5.1 billion, with PIT comprising 70% ($3.6 billion) from sector employees[6].

These aren’t abstract numbers; they’re the difference between financial stability and strain for New York and its largest city.

Philanthropy and Social Services

Non-profits play a pivotal role in delivering essential social services across various sectors, often filling gaps left by government programs. Philanthropy from Wall Street has played a significant role in funding NYC's essential social services, particularly amid rising homelessness and food insecurity. While there are some who criticize that donations from this group should be more, actual levels of contributions are meaningful and would be difficult, if not impossible, for NYC’s government to replace.

According to a comprehensive 2024 report[7] on Wall Street philanthropy, giving associated with the financial services industry, by individuals as well as by institutions, has soared over the past decade. Key local organizations heavily supported by finance donors include the Robin Hood Foundation, United Way of New York City, Food Bank for New York City, and New York Common Pantry. In 2023, the Robin Hood Foundation alone authorized $115.6 million in grants to 238 NYC nonprofits, focusing on food, housing, healthcare, and more.

An exodus of financial industry professionals would mean their donations will leave NYC as well, naturally shift to charities in their new locations. Homelessness, food insecurity, healthcare shortages, and poverty are not exclusive to New York City, and it is natural for people to want to improve their local neighborhoods versus other cities hundreds of miles away.

Work From Anywhere

Post-pandemic, many functions have decoupled from New York City, enabling an exodus. Roles like compliance, risk modeling, data analysis, and IT support that once justified Midtown leases are no longer tethered to any physical location. PwC surveys[8] show a majority of finance professionals thriving in hybrid models, with increased productivity. Front-office deal-making still demands face time with clients, but even that’s hybridizing as Wall Street’s clients move to alternative cities and states.

Data on departures is already damning. New York City’s financial sector shed thousands of jobs in recent months. High earners are fleeing fastest: analyses reveal NYC’s top 1% decamped with billions in gross income, slashing PIT by over a billion annually. Millionaire migration reached thousands in recent years, up significantly from prior periods, driven by the remote-work surge that saw hundreds of thousands of residents bolt during COVID lockdowns. Firms have relocated large percentages of employees to cities such as Austin, Dallas, Miami, Nashville, Phoenix, and others. This isn’t anecdotal; media reports[9] chart a “point of no return,” with out-migration compounding high office vacancy rates in the Financial District.

States Are Competing

Relocating a company or uprooting a family rarely happens without both a push and a pull. Today, both forces are in play. The pandemic taught states they can vie for talent and corporate headquarters with lower taxes, lighter regulations, and a higher quality of life.

What once felt like a premium worth paying for a New York address—proximity to clients, culture, and prestige—now looks overpriced. Competing states have taken notice and are marketing aggressively, offering incentives that make the math harder to ignore.

In a move to bolster its appeal as a financial hub, the Texas legislature recently proposed, and voters approved on November 4, 2025, Proposition 6[10], a constitutional amendment that prohibits the imposition of new taxes on securities transactions, such as stock trades, as well as occupation taxes on entities operating in securities markets.

This amendment, enshrined in Article VIII, Section 30 of the Texas Constitution, was crafted in response to failed attempts in states like New York and New Jersey to enact similar taxes during the COVID-19 pandemic, which raised concerns about deterring investment and prompting relocations.

By constitutionally barring such levies, it sends a clear signal to the financial services industry that Texas is a welcoming, low-tax environment for brokers, exchanges, and investors. Texas is not alone; similar efforts exist in Florida and Arizona.

Poking the Wall Street Bear

Poking the Wall Street Bear isn’t just risky; it’s reckless. New York’s finance sector isn’t invincible; it’s a volatile force that responds to talent density and economic conditions. Ignore it, or worse, antagonize it, and the bear doesn’t just growl; it ghosts, leaving a multi-billion-dollar hole where prosperity existed. Wall Street once fueled the Big Apple’s growth; its departure could just as easily drain it.