Wall Street's Great Migration: $2.7 Trillion Flees High-Tax States for Greener Pastures
Over 370 investment firms have shifted their headquarters since 2020, taking $2.7 trillion in assets with them. The exodus from high-tax states like New York and California has accelerated, reshaping the financial landscape across the US.
Florida, Texas, Tennessee, and North Carolina have emerged as the top destinations for these relocations. The trend shows no signs of slowing, with major players now planning secondary hubs in low-tax regions.
Between 2020 and early 2023, a wave of financial firms abandoned traditional hubs. New York and California each lost an estimated $1 trillion as companies sought lower costs and simpler regulations. States like Texas, Florida, and Tennessee—offering no state income tax, reduced property levies, and lighter oversight—became prime alternatives.
High-profile moves included Citadel's relocation from Chicago to Miami in 2022. AllianceBernstein also shifted its base to Nashville that same year. These transitions highlighted the growing appeal of business-friendly states. Now, Apollo Global Management Inc. is preparing to open a second US headquarters. While keeping its main office in New York, the firm is scouting locations in Texas, South Florida, and Nashville. The decision reflects a broader industry shift away from high-tax, high-regulation environments like San Francisco and Manhattan. The financial impact has been stark. New York's state income tax can reach 10.9%, with additional local levies in NYC. California's rates climb even higher, topping 13.3%. By contrast, Texas, Tennessee, and Florida impose no state income tax, making them far more attractive for firms managing vast sums.
The relocation wave has already moved $2.7 trillion in managed assets to new states. With Apollo's planned expansion, the trend is set to continue. Firms are prioritising cost efficiency and regulatory ease, leaving long-standing financial centres behind.
