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Business leaders warn $7B in proposed tax hikes could wreck NY

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Socking New York’s businesses and wealthy residents with $7 billion in new taxes will likely trigger the worst exodus since the Big Apple flirted with bankruptcy in the 1970s, a huge group of major employers and small business owners warned Tuesday.

In a letter to Gov. Andrew Cuomo and the state’s legislative leaders, the 250 job creators also said a plan to impose the largest tax hikes in state history “will jeopardize New York’s recovery from the economic crisis inflicted by COVID-19.”

“For better or worse, the pandemic has demonstrated that our workforce is more mobile than we ever imagined,” they wrote.

“Our businesses are committed to maintaining a strong presence in New York, but currently only about 10 percent of our colleagues are in the office and prospects for the future of a dense urban workplace are uncertain.”

The executives and entrepreneurs — who together employ about 1.5 million New Yorkers — said many workers “have resettled their families in other locations, generally with far lower taxes than New York, and the proposed tax increases will make it harder to get them to return.”

“This is not about companies threatening to leave the state; this is simply about our people voting with their feet,” they wrote.

“Ultimately, these new taxes may trigger a major loss of economic activity and revenues as companies are pressured to relocate operations to where the talent wants to live and work.”

The employers also pointed to history for a dire and dramatic illustration of the potential consequences.

Morgan Stanley CEO and chairman James Gorman speaks during the Institute of International Finance (IIF) annual membership meeting in Washington DC on Oct. 18, 2019.
Morgan Stanley CEO and Chairman James Gorman seen in October 2019.
Bloomberg via Getty Images

“This is what happened to New York during the 1970s, when we lost half our Fortune 500 companies, and it took thirty years to recover,” they wrote.

The letter noted that President Biden’s recently enacted $1.9 trillion American Rescue Plan — “for which most of us advocated” — will provide New York with enough cash to “eliminate the need for new state and local taxes this year.”

It also said that “significant corporate and individual tax increases will make it far more difficult to restart the economic engine and reassemble the deep and diverse talent pool that makes New York the greatest city in the world.”

“We are not alone in this view; among others, the nonpartisan Citizens Budget Commission has said these tax increases are ‘both unnecessary and economically risky,’ thanks to federal aid and higher than expected tax receipts in 2020,” it added.

The high-powered CEOs who signed the letter include Albert Bourla of COVID-19 vaccine maker Pfizer, Jamie Dimon of JP Morgan Chase, Jeff Blau of the Related Companies, Robert Bakish of ViacomCBS and John Catsimatidis of the Red Apple Group.

BlackRock Inc. CEO Larry Fink speaks at the Handelsblatt Banking Summit in Frankfurt, Germany on Sept. 4, 2019.
BlackRock Inc. CEO Larry Fink speaks at an event in September 2019.
Bloomberg via Getty Images

Real-estate moguls Douglas Durst and Richard LeFrak, Robin Hayes of JetBlue Airways, Sandeep Mathrani of WeWork, Howard Lutnick of Cantor Fitzgerald, Debbie Pearlman of Revlon, Stephen Schwarzman of Blackstone, Rob Speyer of Tishman Speyer, James Tisch of the Loews Corp. and Robert Thomson of News Corp., which owns The Post, were also among the signatories.  

The letter was organized by the pro-business group Partnership for New York City, whose CEO, Kathryn Wylde, said, “The New York state budget for this year should be focused on how to best invest the federal funds coming our way in 2021.”

“They should hold off on new spending and taxes until we have time to develop a plan for educating and training New Yorkers for the jobs of the future, and to determine where those jobs are going to come from,” Wylde said.

“They are legislating a budget without a plan, and that is a terrible mistake.”

On Monday, Cuomo said that federal relief, coupled with better than expected tax revenues, meant the state budget due April 1 can be balanced without the need to cut spending or raise taxes.

JP Morgan Chase CEO and chairman Jamie Dimon is among those who signed a letter warning about the effects of $7 billion in new taxes for New York’s wealthy.
JP Morgan Chase CEO and Chairman Jamie Dimon is among those who signed a letter warning about the effects of $7 billion in new taxes for New York’s wealthy.
The Washington Post via Getty Images

“We agree that our attention must be on getting New York’s economy growing again with a focus on putting out the welcome mat for the New Yorkers who left during the pandemic,” Cuomo budget spokesman Freeman Klopott said Tuesday.

But the Democratic-led state Senate and Assembly have proposed massive spending on education, health care, COVID-19 relief, unemployment insurance for illegal immigrants and other social and cultural programs.

“We are asking those who have a little more to do a little more, so that we’re not looking at the same inequities year after year, day after day, the same austerity — and not really giving the kind of future that we want every New York to have,” Senate Majority Leader Andrea Stewart-Cousins (D-Yonkers) said during a virtual press briefing Tuesday.

“So, I will continue to have conversations with the business community, and we continue to be in partnership and sometimes we agree, sometimes we don’t. But I think that we are all trying to get to the same end — a recovery that lifts everyone in an equitable way.”

Jane Fraser, CEO for Latin American at Citigroup Inc., speaks during an interview at the company's headquarters in Sao Paulo, Brazil on Dec. 3, 2018.
Jane Fraser, CEO for Latin American at Citigroup Inc., speaks during an interview at the company’s headquarters in Sao Paulo on Dec. 3, 2018.
Bloomberg via Getty Images

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Glasses retailer Warby Parker eyeing IPO as soon as this year

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Hipster glasses retailer Warby Parker is eyeing an initial public offering.

The 11-year-old business, which started out as an e-tailer before rolling out some 130 stores across the US, is considering an IPO as early as this year, Bloomberg reported on Wednesday.

The New York-based company has amassed a huge customer following by offering less expensive prescription glasses. Warby Parker raised $120 million in its most recent funding round giving it a $3 billion valuation, according to the report.

“We’ve always explored various financing opportunities in both the debt and equity markets,” the company said in a statement. “To date, we have successfully and deliberately raised money within the private market on favorable terms and have plenty of cash on our balance sheet. We’ll continue to make strategic decisions in line with our commitment to sustainable growth.”

Founded by college buddies Dave Gilboa and Neil Blumenthal, who met at the Wharton School at the University of Pennsylvania, Warby Parker has attracted some large investors including the mutual fund company, T. Rowe Price.

It turned it first profit in 2018, Gilboa told The New York Times at the time.

Warby Parker co-founder Neil Blumenthal
Warby Parker co-founder Neil Blumenthal
Brian Ach/Getty Images

Customers can get prescriptions through their apps on their smartphones and use cameras to pick out frames. The company also has an optical lab in Sloatsburg, NY where it produces lenses.

While Warby Parker is not the least expensive option, it beats Costco in a recent comparison with Costco charging as little a $126 for a pair of prescription glasses compared with Warby Parker’s least expensive pair at $95.

“As consumer walk into a LensCrafters or Sunglass Hut, they see 50 different brands of glasses but don’t realize that all those brands are owned by the same company that owns the store that they’re standing in, that probably owns the vision insurance plan they’r using to pay for those glasses,” Gilboa said in a recent CNBC interview.

“And so, it’s no surprise that a lot of those glasses are marked up 10 to 20 times what they cost to manufacture,” he said.

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Dogecoin hits new high boosted by DogeDay hashtags

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Dogecoin prices hit an all-time high on Tuesday, with a market capitalization above $50 billion, after social media fans used hashtags to fuel a rally in the meme-based cryptocurrency.

An 8,000 percent price surge this year has seen Dogecoin, which was launched as a satirical critique of 2013′s cryptocurrency frenzy, overtake more widely-used cryptocurrencies like Tether to become the fifth-largest coin.

While Dogecoin, whose logo features a Shiba Inu dog at the center of the meme, a represents only a fraction of bitcoin’s $1 trillion value, it can be traded on crypto exchanges and more popular mainstream trading apps.

“The Doge rally represents an interesting convergence,” said Diana Biggs, CEO of crypto start-up Valour, after Dogecoin’s price soared by more than five-fold in the last week to a record 42 cents, according to CoinMarketCap.

“A meme coin created as a joke for early crypto adopters whose community found that kind of thing to be fun, with now a new generation of retail investors for whom memes are a native language,” Biggs added.

Dogecoin fans used the hashtags #DogeDay and #DogeDay420 to post memes, messages and videos on Twitter, Reddit and TikTok, referring to the informal April 20 holiday to celebrate cannabis which is marked by smoke-ins and street parties.

“GIMME THAT DOGECOIN LAMBO!!! #DogeDay” one tweeted, referring to the Lamborghini car popular in crypto culture.

Dogecoin’s rise has come amid a surge in online trading of stocks and crypto by retail investors, stuck at home with extra cash because of the COVID-19 pandemic. It has not coincided with a growth in usage of the coin for payments or in commerce.

The same trend has spurred a boom in usage of online trading apps like Robinhood, and also fueled the social-media driven rally in GameStop stock that pitted retail investors against hedge funds earlier this year.

“It’s an extension of the same phenomenon that has led Tesla stock to be valued well beyond fundamentals and more recently to the GME (GameStop) short squeeze,” said Ajit Tripathi, head of institutional business at decentralised finance startup Aave.

Like other cryptocurrencies, Dogecoin’s price is heavily influenced by social media users including Tesla chief Elon Musk, whose tweets on the cryptocurrency in February sent its price soaring over 60 percent.

“If this goes as planned and everybody including Mr. Musk go ahead and just pour money into Doge on April 20th all at once Doge will reach prices that originally were not even conceptual,” a TikTok user said in a video promoting the coin.



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Amazon is opening a beauty salon in London

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Amazon is opening a hair salon in London — its latest odd lurch into new businesses as the pandemic continues to fuel the e-commerce giant’s torrid growth.

The Amazon Salon, unveiled in a Tuesday blog post, will occupy a two-story, 1,500-square-foot space in Spitalfields, a trendy neighborhood in East London that is also home to Amazon’s UK headquarters, which houses about 5,000 employees.

Indeed, the new salon, which will be open seven days a week, initially will only cater to Amazon workers. Members of the public will be able to make bookings in “the coming weeks” by calling, emailing or visiting the salon, the company says.

“This will be an experiential venue where we showcase new products and technology,” Amazon said in a blog post on Tuesday, adding that there are no plans to open other salons.

That will include making Amazon’s Fire tablets available at each station, allowing customers to use augmented reality technology to see what they look like as a platinum blonde, brunette or with highlights, the company said.

The salon is located at Amazon’s UK headquarters, which houses about 5,000 employees.
The salon is located at Amazon’s UK headquarters, which houses about 5,000 employees.
Amazon

The salon will also test new “point-and-learn” technology, where customers can point at a product they are interested in on a display shelf and the relevant information, including brand videos and educational content, will appear on a display screen.

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