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The world’s most influential banker recently generated headlines by confirming what Texas businesses have known for years: pro-growth policy works, and anti-business policies don’t.

JPMorgan Chase Chairman and CEO Jamie Dimon delivered a stark message to high-tax, high-regulation states like New York, which is quickly losing ground as Texas’ status as a national financial services powerhouse is on the rise: “You can already see a fairly large exodus of people and jobs out of some states with high taxes and high expenses,” Dimon wrote in his letter to the company’s shareholders.

Dimon pointed out that while the bank employed roughly 35,000 people in Manhattan when he started, that number has now fallen to 26,000. Meanwhile, JPMorgan’s Texas workforce has grown from 11,000 to approximately 33,000. His conclusion was blunt: “higher taxes mean lower returns on capital and less competitiveness by their nature.”

For Texas, this is not accidental. It is the result of decades of consistent, pro-business policy, reinforced by recent voter-approved constitutional amendments that further strengthen our competitive position. From financial institutions expanding their footprint to the continued rise of “Y’all Street,” the momentum in Texas’ financial services sector is both real and accelerating.

Already, we’ve seen Charles Schwab, Goldman Sachs, Scotiabank, and JPMorgan Chase plant major flags in the Lone Star State. The New York Stock Exchange (NYSE) and NASDAQ have both established regional headquarters in Dallas. In one of the most consequential developments in American financial history, the SEC last fall approved registration for the Texas Stock Exchange (TXSE), a new national competitor born right here in Texas.

Last November, Texans passed three landmark constitutional amendments: a ban on any state capital gains tax, a prohibition on taxes applied to stock or securities transactions, and an end to estate, inheritance, and gift taxes. Combined with Texas’ longstanding prohibition on a state income tax, these measures send an unmistakable signal to every entrepreneur, investor, and institution in the country: Texas is open for business, now and for generations to come.

At the Texas Association of Business (TAB), we recognize that this momentum requires stewardship and smart policies to ensure we can continue to position Texas as the premiere destination for financial services. That’s why TAB recently launched its inaugural Financial Services Committee, chaired by Scott Fontenot of Wells Fargo, to proactively engage on the policy issues shaping this sector. As fintech innovation accelerates and major exchanges deepen their Texas roots, TAB will ensure that policymakers hear directly from the industry leaders driving this growth.

It’s also critical that policymakers understand the needs of Texans when it comes to considering new regulations on the financial services industry. That’s why we’re encouraged to see that the Texas Senate Committee on State Affairs is taking up an important interim charge to ensure our state is guaranteeing fair banking for all Texans, ensuring non-financial factors such as political views, religion, and other criteria are not used to restrict or deny business owners’ access to capital. This is very much in line with Americans’ attitudes more broadly, with a recent survey finding a staggering 91% of voters support federal banking regulators enforcing laws based on objective standards, rather than subjective ‘political’ or ‘reputational’ considerations, when deciding whether to lend money or allow a business to open an account.

Without stable, consistent access to capital, the most fundamental functions of businesses are at risk – everything from making payroll to processing transactions to borrowing money to expand and grow operations. That’s why, as Texas continues to see growth among financial services giants, we need to ensure our regulatory environment remains open and attractive to business.

Where opportunity grows, capital follows. Texas didn’t stumble into becoming America’s new financial capital, we built it through smart, forward-thinking policy that has now paid dividends. As we prepare to enter another legislative session next year, TAB and its members will be at the forefront of strengthening Texas’ role as America’s new dominant hub for the financial services industry.

–Gabriela von zur Muehlen, Senior Vice President and Chief Policy Officer, Texas Association of Business

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