CEO of JPMorgan Chase Jamie Dimon warned that New York City and other cities with high taxes and regulations run the risk of losing businesses and workers to areas with more hospitable business climates.
Dimon released his annual letter to shareholders Monday in conjunction with the company’s 2025 annual report and said companies must weigh the benefits of operating in places like New York versus areas with lower taxes on businesses and individuals.
“No matter who you are, you must face reality and the truth. The truth is that while New York City has much to offer, especially for financial companies (because of extraordinary local talent), it also has the highest corporate and corporate taxes, as well as the highest individual and state income taxes,” Dimon wrote.
“People often make this a question of morality or loyalty, but that’s not the case. Businesses need to stay competitive in this very difficult and fast-changing world. And higher taxes lower returns on capital and inherently less competitiveness,” he said.
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Jamie Dimon, CEO of JPMorgan Chase, said cities and states must compete to keep businesses in their jurisdictions. (Alexander Tamargo/Getty Images for American Business Forum)
Dimon said that if companies relocate their headquarters or significant aspects of their operations to states with more favorable taxes, regulatory regimes Although easier to track, these changes also occur at the employee level and can represent significant changes for the workforce.
“Plus, individuals vote with their feet – we can already see a fairly large exodus of people and jobs out of certain states with high taxes and spending (often due to high taxes and regulatory burdens). Sometimes you see businesses leaving states, but migration also manifests itself in employee movements out of certain states,” Dimon wrote.
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JPMorgan Chase has expanded its presence in Texas while its workforce has shrunk in New York. (Tim Clayton/Corbis via Getty Images)
He explained how this dynamic played out at JPMorgan, which expanded its presence in a low-tax state like Texas and will probably continue to do so.
“For example, while New York City is still our company’s global headquarters, we have reduced our workforce in the city from 30,000 a decade ago to 24,000 today, and increased our workforce in Texas from 26,000 in 2015 to 32,000 today. This trend will likely continue,” Dimon said.
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Teleprinter Security Last Change Change % JPM JPMORGAN CHASE & CO. 295.45 +0.85 +0.29% The JPMorgan CEO said he has already seen an exodus of companies out of New York, driven in part by the business climate, adding that this could pose significant problems for companies. municipal governments.
“Sometimes this can be a disaster for a city. I remember in the 1970s almost half of the 125 Fortune 500 companies based in New York left,” he writes. “Even if mergers were the cause of some departures, the price of doing business in New York was the most important cause: the cost of taxes, office rents, labor, etc. »
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“No city, no business, no country has a divine right to success,” Dimon added.
