New York City vs. Miami: who wins this one?
Ask yourself this.
Pretend you own a crypto business. Do you want it to be in New York with its burdensome regulations, high taxes, and crazy homeless people, or Miami with its comparatively low regulations and taxes, and fewer crazy homeless people?
Most people would choose the latter—and many people and crypto companies already have.
High Taxes: The Cost of Living and Doing Business in New York
New York’s tax code is ass-backward and unpredictable.
New York taxes S corporations, which doesn’t make sense considering such corporations are formed to avoid taxes. S corporations do not pay taxes in most states. Instead, the owner is taxed on personal income derived from the business.
But in New York, you pay a franchise and personal income tax, and personal income taxes there range from 4 to 10 percent.
New York C corporations can pay taxes based on net income, business capital, and gross income. But it doesn’t matter how you pay, because the taxes are high for every option.
Also, throw in the fact that New York changes the tax code every five minutes to close “loopholes” so they can find new ways to drain the rich dry. So if you’re a tax preparer, you constantly have to play catch-up with the constantly changing rules.
Florida doesn’t tax S corporations, and C corporations pay 5.5 percent on income. Also, Florida doesn’t have personal income taxes.
Onerous Regulations: Another New York State of Mind
New York has some of the worst crypto regulations in the country, if not the world. The Observer had a great piece on this a few days ago.
To legally operate in New York, crypto businesses need to obtain a BitLicense. Businesses need to provide fingerprints of every employee with access to customer funds and have third parties background-check fund principals to get the license.
Worse yet, businesses are given just 45 days to obtain the license. That may sound like a lot, but with all the other bureaucracy businesses have to endure, it’s not that simple.
Afterward, the business needs to hire compliance, anti-money laundering, and information officers. They also have to file financial statements every quarter with New York’s Department of Paperwork and maintain records of every transaction for seven years.
Who the hell wants to do all that?
Bitfinex and Kraken didn’t; they said, “Nice knowing you, we’re outta here.”
And they left in a New York minute.
General Dysfunction Abounds
The only reason to start a crypto business in New York City is to say you have a crypto business in New York City. But as New York City more and more resembles the third world, the city will lose its charm.
Miami will win out over New York if it hasn’t already done so judging by those metrics above.
But this isn’t something to gloat over; instead, it is a tragedy of epic proportions, and we should all weep for New York.
My wife and I love classic movies, and many we like, such as Miracle on 34th Street, 12 Angry Men, Yankee Doodle Dandy, and Pride of the Yankees are set in New York City. However, I can’t enjoy these classics knowing what the city is like now.
Those films are tombstones for a once-great city.
Businesses of all sorts will continue fleeing New York for Florida and other states, and New York will get poorer and poorer. People won’t tolerate high taxes and punitive regulations or being pushed in front of subways by homeless lunatics.
Choose sunshine, beaches, and a crypto-friendly environment. Miami is winning this race.