Peebles Corporation Founder and CEO Don Peebles told FOX Business’ Maria Bartiromo that the GOP tax bill will have a catastrophic impact on New York City, leading to a mass exodus of business owners and entrepreneurs.
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“State income deductions and the local pressure on taxes that [Mayor Bill de Blasio] is calling for, an increase in taxes on millionaires and a mansion tax increase. I think that’s also going to be hard on real estate,” Peebles said during an interview on FOX Business’ “Wall Street Week.”
Blue states like California, Connecticut, New Jersey and New York have the most to lose from a key provision in the Republican tax plan that would eliminate the state and local tax deduction, also known as SALT.
Peebles said the financial capital of the world is becoming more of an anti-business environment with high taxes and a diminishing quality of life, forcing entrepreneurs and businesses to seek opportunities in other states.
“No deductibility of state income taxes and New York is one of the top three highest-taxed states in the country, and then when you add the New York City tax implications on it, it can be as high as 17%. I think it’s a pill that people are going to have difficulty swallowing,” he said.
The real estate mogul said the governors of high-tax states are in a difficult position of reigning in on spending while resisting tax increases.
“We have to impose some discipline on state and local governments, and I think responsible governors and mayors will do that,” Peebles said.
Peebles characterized the real estate environment in New York as “uncertain” and at a “breaking point.”
“Prices have gone very high, and now there is a big pullback. There’s a lot of new inventory on the market,” he said. “You have a shrinking buying pool, and you have an oversupply right now.”