JPMorgan warns tax pressure risks New York competitiveness

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JPMorgan warns on NYC taxes

Highlights

JLL reports Manhattan office vacancies fell 2.2% year-over-year in Q1 2026 and rents rose 3.5%, driven by ongoing demand from AI firms.
JPMorgan's New York City head count dropped from 30,000 to 24,000 over the past decade, while Texas staff grew from 26,000 to 32,000, reflecting tax-motivated workforce migration.
Major banks including Bank of America, Goldman Sachs, and Apollo are expanding operations and campuses in Texas, reinforcing the state's growing finance sector presence amid New York's tax challenges.

Manhattan office demand remains firm in 2026

Current leasing data suggests the business migration Dimon is describing is not yet translating into a broad retreat from New York offices. JLL reports that companies keep signing leases for high-quality space in Manhattan in the first quarter of 2026, while vacancies are down 2.2% from a year earlier. The property firm also says rents are up 3.5% year over year, helped in part by demand from artificial intelligence companies planning near-term hiring.JLL also points to recent commitments from major financial companies. Bank of America is expanding its Midtown office footprint, while American Express is moving ahead with a new headquarters building in the Financial District. Those decisions indicate that, for now, large employers still see strategic value in keeping significant operations in New York City.

Tax concerns contrast with southward workforce shift

Dimon says New York has strong advantages, but argues that high taxes are inhospitable to some businesses and reduce returns on capital. He also says migration pressures can appear not only through company relocations, but through employees moving to lower-tax states. His comments come amid debate over higher taxes on wealthy residents and corporations, including proposals supported by New York City Mayor Zohran Mamdani to help address the city's $5.4 billion budget deficit.Within JPMorgan's own workforce, the bank's New York City head count has fallen to 24,000 from 30,000 over the past decade, according to Dimon's letter. Over a similar period, its Texas head count has risen to 32,000 from 26,000 in 2015. Dimon says that trend is likely to continue.

Texas gains ground in finance expansion plans

JPMorgan already employs more than 12,000 people at its Plano, Texas campus, underscoring the state's growing role in U.S. finance operations. Other major firms are following a similar pattern, with Goldman Sachs and Bank of America announcing new campus plans in Dallas. Apollo has also said it is looking for a second headquarters in either Texas or Florida.The broader picture suggests a split trend for the sector. New York continues to attract premium office demand and large corporate commitments, while lower-tax southern states gain staff, campuses and long-term expansion projects. That dynamic keeps pressure on New York policymakers as they weigh revenue needs against business competitiveness.

We previously covered Jamie Dimon’s 2026 outlook in his annual shareholder letter, where he warned that inflation could reaccelerate and keep interest rates higher for longer than markets expect, weighing on asset prices. He also pointed to geopolitical conflict, supply-chain fragility and trade uncertainty as factors that could reinforce price pressures even as the U.S. economy remains resilient.

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