Wall Street Bonuses Pump Tax Money into State's Coffers

February 27, 2013 Updated Feb 27, 2013 at 8:59 AM EDT

By Adam Sichko, Albany Business Review

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Wall Street Bonuses Pump Tax Money into State's Coffers

February 27, 2013 Updated Feb 27, 2013 at 8:59 AM EDT

Profit and bonuses are on the rise at Wall Street securities firms, according to an analysis released today by New York Comptroller Thomas DiNapoli.

It's a measure of good news for the entire state's economy -- and for tax revenue. Taxes on Wall Street income, bonuses, real estate deals, IPOs and other activities account for 14 percent of all revenue the state receives. (That figure peaked at 20 percent during the run-up right before the recession hit in 2008).

The Wall Street securities firms that DiNapoli studied paid out a total of $20 billion of bonuses for 2012, an increase of 8 percent, or an extra $1.5 billion.

That's still $14 billion shy of where the bonus pool peaked in 2006.

The average cash bonus rose 9 percent to about $121,000, DiNapoli said.

More Wall Street firms are shying away from cash-heavy bonuses, which New York state can tax immediately, and favoring bonuses made more of things like stock options, which cannot be taxed for years down the road, until those options are exercised.