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New York and California lost over $90 billion in income during Covid, according to new IRS data.
It accelerated the trend of high-earners relocating to lower-tax states like Florida and Texas.
The income losses for California and New York in 2021 were more than three-times their combined losses in 2019, before the pandemic took hold in the U.S.

A pedestrian wearing a face masks crosses an empty street amid the coronavirus outbreak in San Francisco, California.
Liu Guanguan | China News Service via Getty Images

New York and California lost over $90 billion in income during Covid as taxpayers moved to other states, accelerating the trend of high-earners relocating to lower-tax areas.
New data from the Internal Revenue Service shows that New York state lost $25 billion in adjusted gross income due to outmigration in 2021, on top of $20 billion lost in 2020. California reported a net loss of $29 billion in 2021, following a loss of $18 billion in 2020. Combined, the two states lost $92 billion across the two years.

The data shows that the income flight from high-tax states to low-tax states, which has been happening for years, picked up steam during Covid. The income losses for California and New York in 2021 were more than three-times their combined losses in 2019, before the pandemic took hold in the U.S.
Experts say that while the income migration from states likely slowed in 2022 and 2023 from the pandemic highs, higher-tax states will continue to see outflows of high earners, thanks in part to remote work and white-collar job growth in the sun belt.
“When we get the data for 2021-22 and 2023, the outflow is certain to have slowed to some extent,” said E.J. McMahon, founding senior fellow at the Empire Center, “which does not in my view, mean migration will have ceased to be a problem.”
The biggest winner in the migration has been Florida: The Sunshine State gained a net 128,000 households in 2021, bringing over $39 billion in income, according to the IRS data, a huge jump from the $28 billion gained by the state in 2020. Palm Beach County, which includes the exclusive town of Palm Beach, gained over $11 billion in income alone in 2021, according to the IRS.
Nearly a third of Florida’s gain — or about $10 billion — came from New York. California, Illinois and New Jersey each lost over $4 billion in income to Florida in 2021. The income gains are rippling through the Florida economy, with a recent Bureau of Labor Statistics report showing Florida with more total jobs than New York since the Bureau started tracking the numbers in 1982.

Texas was also a winner, adding $11 billion in income. California’s loss was largely Texas’ gain, with over $5 billion moving from California to Texas.
Other winners included Nevada, North Carolina and Arizona, which gained about $14 billion in income combined.
The losses in the high-tax states also tended to be higher earners, which will have an outsized impact on tax collections over time. The average income of the households leaving New York reached an all-time high of $130,000 in 2021. The average income of New Yorkers moving to Florida was even higher, at $223,245 — a 64% jump from the average income of those who moved out between 2019 and 2020, according to McMahon.
A number of super-earners, like hedge fund executives and private equity chiefs, also moved to Florida during the pandemic. Those groups tend to be among the largest single taxpayers in New York, New Jersey and Connecticut.
Many Democrats say the income flight is overstated, since the number of millionaires in New York and California remains at or near all-time highs. They say that as federal aid winds down and tax revenue starts to decline, states should raise taxes on the wealthy.
New York legislators battled last month for a tax increase on New Yorkers earning more than $5 million a year, yet Gov. Kathy Hochul blocked the move.
Both California and New York, which had budget surpluses in 2022, are now projecting deficits in 2023 and 2024. California is projecting a deficit of $24 billion in the next fiscal year. New York is projecting a deficit of over $7 billion by 2025.
“If we’re seeing an increased outflow of very high earners — and we are — it inevitably means the tax base is smaller than it would otherwise be,” McMahon said.   More

After a four-year spruce up Tiffany & Co, an upmarket American jeweller, reopened the doors of its flagship store on New York’s Fifth Avenue to the public on April 28th. At first glance the grand unveiling seems conspicuously ill-timed. Hours earlier the Bureau of Economic Analysis had reported that nominal consumer spending in America barely grew in March, amid stubbornly high inflation and a slowing job market.Yet the throng of well-heeled New Yorkers who queued up on opening day to enter what Tiffany has modestly rechristened “The Landmark” hints at a more nuanced story. Hard economic times have, as in the past, pushed consumers of middling means to trade down to budget-friendly stores and products, boosting the performance of those businesses. Wealthy households, however, remain flush with cash, leaving businesses that cater to the affluent surprisingly buoyant. That has raised awkward questions for firms that offer their customers neither frugality nor luxury, but something in between.It has been a rollercoaster three years for America’s consumers—and the businesses that cater to them. The onset of the covid-19 pandemic in early 2020 brought on a sharp contraction in spending that was followed by an orgy of indulgence (see chart 1). Even lower-income households partook in the revelry, spurred on by juicy stimulus cheques and an uptick in wages for less skilled workers as businesses raced to rehire waiters, shop clerks and the like.Then, around 12 months ago, surging inflation led consumers to start tightening their belts, albeit with significant variation across the income distribution. A sharp spike in food and fuel prices triggered by Russia’s invasion of Ukraine coupled with a jump in rental prices hit households further down the income ladder particularly hard, given the higher share of spending they allot to such essentials. Over the course of 2022 the inflation rate for households in the bottom income quintile was one-fifth higher than that for the top quintile, according to Goldman Sachs, a bank, offsetting faster wage growth among low-earners (see chart 2).While annual consumer-price inflation in America has begun to ease, falling from an average of 6.5% last year to 5.0% in March, elevated price levels are weighing heavily on the less affluent, notes Gregory Daco of EY, a consultancy. Extra household savings amassed during the pandemic have dwindled from a peak of nearly $2.5trn in the middle of 2021 to roughly $1.5trn, with the bulk now held mostly by high-income households, according to Joseph Briggs of Goldman Sachs. Wallets at the top of the income distribution have also been fattened by a surge in asset prices in recent years, notes Paul Lejuez of Citigroup, another bank. Although markets have fallen from their frothy peaks, the S&P 500 index of large companies is still up by 26% compared with January 2020. House prices have risen by 38%.This unevenness in the financial health of consumers has had two effects. First is that businesses at the wallet-sparing end of the price spectrum have scored new customers. While the poorest households have cut back on all but essential spending, those of middling means—with larger shopping carts—have been shifting to cheaper stores and brands, says Sarah Wolfe of Morgan Stanley, one more bank.Analysts reckon that sales at Burlington, a discount department store, grew by 13.2% year on year in the first quarter of this year, compared with a decline of 4.2% for Macy’s, a middle-class stalwart. Growth at Walmart, a big-box retailer favoured by the thrifty, is expected to clock in at a respectable 4.9% for America last quarter, while Albertsons and Kroger, two mid-range supermarkets, are forecast to eke out a meagre 2.5% and 1.3%, respectively. A similar pattern is on display within retailers: in-house brands at Walmart are snatching sales away from branded goods from suppliers like Procter & Gamble and Unilever, which have jacked up prices to protect margins. Consumers are bargain-hunting beyond supermarkets and department stores. On April 25th McDonald’s, a purveyor of cheap calories, announced an expectations-beating 12.6% sales growth in America for the first quarter, compared with the previous year. On April 20th IKEA, a Swedish maker of cheap furniture and homeware, said it was investing $2.2bn to expand its presence in America—days before Bed Bath & Beyond, an assuredly middle-class rival, declared bankruptcy.The second upshot of the uneven health of consumers is that, as wealthy shoppers keep splurging on the finer things in life, businesses at the wallet-emptying end of the price spectrum continue to thrive. Last year the market for luxury goods in America grew by a handsome 8.7%, well above inflation, according to Euromonitor, a market-research firm (see chart 3). On April 12th LVMH, the world’s largest luxury conglomerate and owner of Tiffany & Co, reported first quarter sales growth of 8%, year on year, in America—down from 15% in 2022 but still bubbly. Hermès, a maker of eye-wateringly expensive handbags, saw no slowdown in sales in America in the first quarter. The pattern extends well beyond designer wear. Luxury-car sales have been on a two-year tear, hitting a record 19.6% of the total market in January, according to data from Kelley Blue Book, another market researcher.The resilience of the luxury business has been helped by a shift in focus since the financial crisis from the merely rich to the positively loaded, notes Claudia D’Arpizio of Bain, a consultancy. The penthouse floor of “The Landmark” is dedicated entirely to such ultra-high-net-worth shoppers. Whereas aspirational buyers may in good times splash out on a pair of Gucci sneakers, those at the tippy-top of the income distribution are reliable patrons even when the economy looks shaky. That has made luxury a less cyclical business than it once was.The centre doesn’t holdWith consumer spending shifting to the two extremes of the price spectrum, some companies have already begun to reposition themselves. One strategy is to beef up pricier ranges. On April 3rd L’Oréal, a beauty giant whose brands range from the moderately priced Garnier to the luxuriously expensive Lancôme, said it would spend $2.5bn buying Aesop, a maker of $40 hand soaps. Other businesses are reducing exposure to the shaky middle. On April 14th Walmart announced it was selling Bonobos, a mid-range menswear brand, for a mere $75m, well below the $310m it paid to acquire it in 2017. A third strategy is to invest in offerings for the budget-conscious. Video-streamers from Netflix to Disney have launched ad-supported tiers to mop up customers who balk at rising subscription prices.Investors would do well to take note. Conventional market wisdom dictates steering clear of businesses in “discretionary” spending categories (cars, clothes and other non-essentials) in favour of “staples” (necessities such as groceries) in tough economic times. The new logic of consumption suggests that the pedlars of the most essential fare can expect to do well as the economy sours. But so can sellers of the exceedingly discretionary. ■ More

Home prices in March rose for the third consecutive month, on a seasonally adjusted basis.
New listings are 30% lower than pre-pandemic norms for this time of year.
Nearly half of homes on the market are selling within two weeks.

A “For Sale” sign outside of a home in Atlanta, Georgia, Feb. 17, 2023.
Dustin Chambers | Bloomberg | Getty Images

After cooling for the better part of last year, home prices are on the rise again.
A sharp drop in new listings, adding to an already meager supply of homes for sale, is leading to renewed bidding wars and more homes selling for above asking price.

Home prices rose a seasonally adjusted 0.45% in March from February, according an early look at the Black Knight Home Price Index provided exclusively to CNBC. After revisions to January and February reads, this is now the third consecutive month of price increases.
Roughly 30% fewer new listings came on the market in March compared with pre-pandemic norms. The deficit continues to grow, as fewer potential sellers want to list their homes in today’s higher-mortgage-rate environment. This comes in the heart of the spring housing market, when demand is historically highest.
“A modest bump in homebuyer demand ran headlong into falling for-sale supply,” said Andy Walden, Black Knight’s vice president of enterprise research. “Just five months ago, prices were declining on a seasonally adjusted month-over-month basis in 92% of all major U.S. markets. Fast forward to March, and the situation has done a literal 180, with prices now rising in 92% of markets from February.”
Competition among buyers is not only pushing prices higher but also accelerating the market again. Nearly half of homes on the market are selling within two weeks, the highest share in nearly a year, according to Redfin, a real estate brokerage.
The national gains, however, do not show sharp differentials in price strength and weakness regionally. Prices in the West, where metropolitan markets had been most expensive, are well off their recent peaks, while 40% of other major markets have seen prices return to peak levels.

Of the nation’s 50 largest housing markets by population, just Austin, Salt Lake City and San Antonio are seeing prices fall month to month. Prices in Phoenix and Dallas are flat.
The initial softening in home prices came early last summer, when mortgage rates had basically doubled in the span of a few months. Rates are now off their recent peak, but not by much. The average rate on the popular 30-year fixed mortgage has been bouncing between 6% and 7%; in the first few years of the pandemic it hit more than a dozen record lows, generally hovering around 3%.
Buyers are clearly getting used to the higher-rate environment, as sales have strengthened for the past few months. Homebuilders have recently reported strong quarterly earnings, as they use incentives like mortgage rate buydowns to pull in sales. Builders also have far more supply and are clearly benefitting from the lack of existing homes for sale.
A separate report released Tuesday from CoreLogic focuses on home price comparisons from a year ago, but also shows prices gaining month to month. Prices in March were just over 3% higher than last year nationally, but markets in the sunbelt are far outpacing cities in the West and Northeast. Prices in Miami were up nearly 15% from a year ago.
Meanwhile, home prices in 10 states are lower than they were last March, according to CoreLogic: Washington (-7.4%), Idaho (-3.6%), Nevada (-3.5%), Utah (-3.4%), California (-3%), Montana (-2.3%), Oregon (-2%), Colorado (-1%), Arizona (-0.9%) and New York (-0.6%).
“The monthly rebound in home prices underscores the lack of inventory in this housing cycle,” wrote Selma Hepp, CoreLogic’s chief economist in a release. “In addition, while the lack of affordability generally weighs on home price growth, mobility resulting from remote working conditions appears to be a current driver of home prices in some areas of the country.” More

Restaurant Brands International topped Wall Street’s estimates for its first-quarter earnings and revenue.
Burger King and Tim Hortons both reported double-digit same-store sales growth.
Burger King’s U.S. same-store sales climbed 8.7%, an early sign that its turnaround is taking hold.

In this photo illustration, a Burger King Whopper hamburger is displayed on April 05, 2022 in San Anselmo, California.
Justin Sullivan | Getty Images

Restaurant Brands International on Tuesday reported quarterly earnings and revenue that topped analysts’ expectations, fueled by double-digit same-store sales growth at Tim Hortons and Burger King.
Shares of the company were flat in premarket trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: 75 cents adjusted vs. 64 cents expected
Revenue: $1.59 billion vs. $1.56 billion expected

Restaurant Brands reported first-quarter net income of $277 million, or 61 cents per share, up from $270 million, or 59 cents per share, a year earlier.
Excluding items, the company earned 75 cents per share.
Net sales rose 9.6% to $1.59 billion. The company’s same-store sales grew 10.3% in the quarter, fueled by double-digit growth at Burger King and Tim Hortons.
Burger King’s same-store sales rose 12.3%, beating StreetAccount estimates of 6.8%. In the U.S., the burger chain’s same-store sales increased 8.7%, an early sign that its domestic turnaround is taking hold.

“This is one of the best results we’ve had in a really long time,” Restaurant Brands CEO Josh Kobza told CNBC.
In April, Burger King U.S. President Tom Curtis told CNBC that the chain is selling more Whoppers than it ever has before, thanks to its new advertising campaign and a Whopper-themed jingle that went viral on TikTok.
“Given these results, moderating cost inflation and our investment behind the brand, coupled with strong operating leverage at the restaurant level, we’re feeling increasingly positive about BK’s path forward this year and into the future,” Kobza told analysts on Tuesday.
The turnaround strategy also focuses on improving franchisees’ profitability. So far in 2023, two of Burger King’s U.S. franchisees have filed for bankruptcy. Kobza said on the conference call that he expects more “short-term noise” as some locations turn over into the hands of its top operators.
Tim Hortons’ same-store sales climbed 13.8%, topping StreetAccount estimates of 10.1%. In Canada, its home market, it reported same-store sales growth of 15.5%.
The Canadian coffee chain underwent its own turnaround in recent years to revive sales in its home market. Restaurant Brands revamped Tims’ menu and loyalty program and upgraded its coffee-brewing equipment. Its mobile app is now the number two e-commerce app in Canada, trailing only Amazon.
Popeyes Louisiana Kitchen reported same-store sales growth of 5.6%, topping StreetAccount estimates of 4%. A year earlier, it reported same-store sales declined 3%.
In January, the fried chicken chain brought back Ghost Pepper Wings for the first time in three years and sold out of the item in just two weeks. Executives said the wings encouraged customers to spend more, improved franchisees’ profit margins and attracted younger customers. The Ghost Pepper Wings returned to menus on Monday as a permanent addition.
Firehouse Subs, the latest addition to Restaurant Brands’ portfolio, saw its same-store sales rise 6.1% in the quarter. More

Pfizer reported revenue and adjusted earnings that topped Wall Street’s expectations, despite a sales decline driven by the lower demand for the company’s Covid vaccine.
The pharmaceutical giant reported first-quarter sales of $18.28 billion, down 29% over the same period a year ago.
The New York-based company maintained its 2023 sales forecast of $67 billion to $71 billion.

Pharmaceutical Pfizer Inc. said that an oral drug for treating COVID-19 could be available by end of 2021.
Soumyabrata Roy | NurPhoto | Getty Images

Pfizer on Tuesday reported first-quarter revenue and adjusted earnings that topped Wall Street’s expectations, despite a decline in sales driven by the lower demand for the company’s Covid vaccine.
The pharmaceutical giant’s stock edged higher in premarket trading Tuesday. Shares are down more than 23% for the year through Monday’s close, putting the company’s market value at around $221.3 billion. 

Here’s what Pfizer reported compared with Wall Street’s expectations, based on a survey of analysts by Refinitiv:

Earnings per share: $1.23 adjusted, vs. 98 cents expected 
Revenue: $18.28 billion, vs. $16.59 billion expected

Pfizer posted net income of $5.54 billion, or 97 cents per share. That compares with $7.86 billion, or $1.37 per share, for the first quarter of 2022.
The company reported first-quarter sales of $18.28 billion, down 29% over the same period a year ago.
Sales of the company’s Covid vaccine declined $10 billion, or 75%, compared with the same quarter last year. Pfizer said this was primarily driven by lower contracted deliveries and demand in international markets.
The decline was also due to lower U.S. government contracted deliveries as the country prepares to shift Covid products to the commercial market later this year, according to Pfizer.

Sales of Pfizer’s Covid antiviral pill Paxlovid increased $2.8 billion during the first-quarter compared with the same period last year. Pfizer said Paxlovid revenue was propelled by new launches in certain international markets and strong demand in China due to increased Covid cases.
Sales were also driven by final deliveries associated with a U.S. contract finalized in late December.
Paxlovid first entered the U.S. market under emergency use authorization in late December 2021. Pfizer hopes to win full Food and Drug Administration approval for the drug this year. Still, the company expects sales of Paxlovid to drop 58% for the full year compared with 2022.
Excluding Covid product sales, Pfizer said first-quarter revenue grew 5% over the same period a year ago.
That growth was fueled by products from recently acquired companies, according to Pfizer. That includes Biohaven Pharmaceutical’s migraine drug Nurtec ODT and Global Blood Therapeutics’ sickle cell disease treatment Oxbryta, which contributed $167 million and $71 million, respectively.
The company said the increase was also driven by strong sales of drugs like Sulperazon, an antibiotic for the treatment of urinary tract infections, and blood thinner medication Eliquis.
The New York-based company maintained its 2023 sales forecast of $67 billion to $71 billion. Pfizer also reiterated its full-year adjusted earnings outlook of $3.25 to $3.45 per share.
But Pfizer continues to expect Covid-related sales to decline this year. The company reaffirmed its forecast of $13.5 billion in Covid vaccine sales in 2023 and $8 billion in revenue for Paxlovid.
A Pfizer spokesperson said the company expects this year to be a “transition year” for Covid sales before “potentially returning to growth in 2024 and beyond.”
Excluding Covid products, Pfizer said it expects 7% to 9% revenue growth this year.
Pfizer and other drugmakers like Moderna and Johnson & Johnson have been bracing for a steep drop-off in Covid-related sales this year as the world emerges from the pandemic and relies less on blockbuster vaccines and treatments for the virus. 
But Pfizer is pinning its hopes on M&A and a record pipeline to help the company navigate its post-pandemic boom. 
The company said in January it expects to launch 19 vaccines and treatments over the next 18 months. Those drugs have the potential to generate $20 billion in 2030 sales, according to Pfizer. 
That includes Pfizer’s RSV vaccine for use in older adults, which could win FDA approval later this month.
The pipeline also includes the company’s new pneumococcal vaccine for children and a treatment for ulcerative colitis from the recently acquired Arena Pharmaceuticals.
Pfizer also said last year it plans to add $25 billion in revenue through dealmaking by 2030.
The company already made strides toward that goal with the $43 billion acquisition of Seagen in March. Seagen could contribute more than $10 billion in risk-adjusted sales by 2030 with its cancer therapies, according to Pfizer.
Pfizer will hold an earnings call at 10:00 a.m. ET.
Read the earnings release.
This is a developing story. Check back for updates. More

Six of the major professional sports unions are working together to promote mental health awareness and provide resources.
Many star athletes have opened up about their own struggles in recent years.
A new, monthlong campaign will aim to normalize mental health through players opening up about their own struggles.

Seattle Seahawks defensive end Marcus Smith (97) leaves the field after an NFL football game against the Tennessee Titans in Nashville, Tennessee.
Mark Zaleski | AP

Six of the biggest professional sports unions in the country are teaming up in May to bring attention to Mental Health Awareness Month.
The NFL Players Association, National Basketball Players Association, National Hockey League Players Association, MLB Players Association, MLS Players Association and Women’s National Basketball Players Association will work together to raise awareness about the cause and invest resources to improve mental health for the pro athlete community.

This is the first time the sports organizations have come together to promote mental health.
“‘MentalHealthisMAYnstream’ will advance the national and global conversation around mental health and wellness and relate it to the experiences of athletes at every level of competition,” a joint statement from the organizations said.
The high stakes, busy lifestyles and pressures of professional sports have caused many athletes to reveal their own mental health struggles in recent years. With the National Alliance on Mental Illness reporting 1 in 5 adults in the U.S. experience a mental health-related issue each year, athletes have not been exempt.
Former Seattle Seahawks defensive end Marcus Smith II even contemplated ending his life after feeling like he wasn’t living up to expectations of being a first-round draft pick.
He credited his head coach, Pete Carroll, and defensive line coach, Cliff Hurtt, for helping him find resources that ultimately saved his life.

“If it wasn’t for them, I wouldn’t have done what I was doing and I probably wouldn’t be here today,” Smith said last year.
Today, Smith dedicates himself to helping other players avoid reaching that breaking point.
“Everyone is going through something that we can’t see,” said Miami Heat power forward Kevin Love, when he revealed his own struggle with panic attacks in 2018 in The Players’ Tribune.
The Covid-19 pandemic created even more isolation for many who were already struggling.
Star Dallas Cowboys quarterback Dak Prescott opened up about his depression in 2020, following the death of his brother and mother. Prescott said the isolation from Covid-19 quarantines only added to his anxiety.
“I obviously got the help that I needed and was very open about it,” he said at the time. “I think that’s why I was fortunate enough to get over it, as not all of us are.”
As athletes from all levels have expressed their struggles, many of the leagues realized that mental health needs to be as much of a priority as physical health.
This new, monthlong campaign will aim to normalize mental health through players opening up about their own struggles, in addition to the sports unions providing tips and resources from wellness experts.
The sports leagues will also highlight inspirational stories from athletes and the various mental health efforts they are leading. More

A bipartisan group of lawmakers urged the SEC to crack down on Chinese e-commerce giant Shein ahead of its possible U.S. IPO.
The fast-fashion brand is under fire for allegedly selling clothes made by forced labor in China.
“We have zero tolerance for forced labor,” a Shein spokesperson told CNBC.

Two people hold two Shein bags after entering SHEIN’s first physical store in Madrid, Spain, June 2, 2022.
Cezaro De Luca | Europa Press | Getty Images

WASHINGTON — Bipartisan lawmakers are urging the nation’s top markets regulator to require Chinese fast-fashion giant Shein to disclose potential forced labor practices ahead of the company’s possible initial public offering in the United States.
The fast-fashion company has come under fire for accusations of mistreatment of Uyghurs, a marginalized group in China, and for allegedly falsifying reports of forced or underpaid labor of its supplier factories, some of which are located in the Xinjiang Uyghur Autonomous Region of China.

The alleged practices violate the 2021 Uyghur Forced Labor Prevention Act, Reps. Jennifer Wexton, D-Va., and John Rose, R-Tenn., wrote in a letter Monday to Securities and Exchange Commission Chairman Gary Gensler.
“As a global company, Shein takes visibility across our entire supply chain seriously. We are committed to respecting human rights and adhering to local laws and regulations in each market we operate in,” a Shein spokesperson told CNBC. “Our suppliers must adhere to a strict code of conduct that is aligned to the International Labour Organization’s core conventions. We have zero tolerance for forced labor.”
The SEC didn’t immediately respond to a request for comment.
The representatives are leading a bipartisan group, including 22 other lawmakers, in demanding the SEC require that Shein independently verify that it does not use forced labor before being allowed to issue securities in the U.S. The $64 billion company is preparing for a potential IPO later this year.
“While Shein claims its products do not utilize Uyghur forced labor and it works with third parties to audit its facilities, experts counter these types of audits are easily manipulated or falsified by state-sponsored pressure,” the lawmakers wrote to Gensler. “Other experts argue that it is appropriate to presuppose that any product made in the XUAR is made with forced labor.”

Goods manufactured in that area of China are not entitled to entry into the U.S. under the 2021 act.
The lawmakers also asked Gensler to notify national securities exchanges registered under Section 6 of the Securities Exchange Act of the requirement. Section 6 outlines the application process for registration as a national securities exchange.
Shein’s business model relies heavily on advertising to Gen Z buyers on mobile apps, such as TikTok, and through social media influencers.
The company, whose de facto holding company is located in Singapore, hired its first federal lobbyists in 2022 with goals to expand its distribution into the U.S. market, according to Politico.
The lawmakers’ letter echoes concerns from outside groups. Independent coalition Shut Down Shein has also called on the SEC to deny IPO registration to Shein unless it provides proof of compliance with the Uyghur Forced Labor Prevention Act.
“Access to U.S. capital markets is a privilege, not a right, and should not be given freely to corporations who threaten U.S. national security with nefarious business practices, and who are making Americans complicit in their violation of U.S. law,” Chapin Fay, executive director of Shut Down SHEIN, has written.
– CNBC’s Gabrielle Fonrouge contributed to this article. More

Members of Congress who sit atop key banking committees praised the federal takeover of First Republic Bank and called its sale to JP Morgan Chase an example of a successful public-private collaboration.
“This prompt and cost-effective sale of the bank protects depositors, limits contagion and ensures that no cost is borne to our nation’s taxpayers,” said Rep. Maxine Waters, D-Calif.
Interest on Capitol Hill in legislation to tighten regulation of banks appears to have waned after an initial rush in the wake of the Silicon Valley Bank and Signature Bank failures.

Chairman Sherrod Brown, D-Ohio, left, and ranking member Sen. Tim Scott, R-S.C., arrive for the Senate Banking, Housing and Urban Affairs Committee hearing discussing recent bank failures, April 27, 2023.
Tom Williams | Cq-roll Call, Inc. | Getty Images

WASHINGTON — Lawmakers who sit atop key banking committees praised the federal takeover of First Republic Bank on Monday, and held up the sale of its assets to JP Morgan Chase as a successful public-private collaboration to protect the U.S. financial system.
“This prompt and cost-effective sale of the bank protects depositors, limits contagion and ensures that no cost is borne to our nation’s taxpayers,” said Rep. Maxine Waters of California, the top Democrat on the House Financial Services Committee.

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The Republican chairman of the committee, Rep. Patrick McHenry, of North Carolina, said, “I appreciate the quick work of regulators to facilitate a sale of the bank’s assets while minimizing risk to taxpayers.”
The collapse of the institution, which followed the failures of Silicon Valley Bank and Signature Bank in March, sparked a fresh debate on Capitol Hill about how best to address threats to the financial system.
GOP lawmakers have repeatedly cautioned against passing new legislation in response to the banks’ failure, and they declined to push for stricter regulation again on Monday.
Democrats, meanwhile, have focused on a 2017 bank deregulation bill that passed with bipartisan support at the time, making it unlikely that a repeal effort would succeed today.
More broadly, with control of the House and Senate split and negotiations over the debt ceiling poised to dominate the next several months, there is little hope in Washington that any serious banking reforms will come out of Congress this year.

Even so, an appetite for banking reform exists outside Congress.
The Federal Deposit Insurance Corporation, which has backstopped tens of billions of dollars worth of uninsured deposits at the failed banks, released a new report Monday outlining various options for deposit insurance reform. The report concluded that Congress should allow higher limits or unlimited insurance for business accounts.
Republicans have indicated so far that they strongly prefer private sector solutions over broadening government backstops.
On the Senate side, the ranking member of the chamber’s banking committee, Sen. Tim Scott, R-S.C., said he was “glad” the FDIC had “secured a private market solution for First Republic. I look forward to learning more about the bid process and bringing transparency to the American people.”
His statement contrasted from the reaction of the Senate banking committee’s chairman, Democratic Sen. Sherrod Brown of Ohio. He did not directly respond to the federal intervention, choosing instead to direct his ire at the failed bank.
“First Republic Bank’s risky behavior, unique business model, and management failures led to significant problems, and it’s clear we need stronger guardrails in place,” Brown said in a statement. “We must make large banks more resilient against failure so that we protect financial stability and ensure competition in the long run.”

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Like Brown, Waters called for a more robust congressional response to the failure of three major regional banks since the beginning of March: first SVB, then Signature Bank and, most recently, First Republic.
Friday’s government reports reviewing the federal responses to SVB and Signature “underscore the need for Congress and regulators to strengthen the regulation and supervision of regional banks,” said Waters, and for “compensation clawbacks to hold bank executives accountable for their actions.”
Waters also said the House Financial Services Committee should invite the CEO of First Republic to testify. A previous invitation from the Senate banking committee to the CEOs of SVB and Signature Bank in March was declined, according to follow-up letters the committee sent to the chief executives.
Still, it was unclear Monday whether the slow-motion collapse of First Republic over several weeks, which culminated in the sale announcement, would be enough to revive interest on Capitol Hill in legislation to increase the regulation of banks or impose stricter penalties on bank executives at failed banks.
Following a flurry of new bills in the weeks after the collapse of SVB, Congress has yet to take any concrete action in response to the bank failures, save for holding hearings with regulators.
A bipartisan Senate bill introduced in late March would give federal regulators far more power to claw back executive compensation at failed banks than they have under current law.
The bill has been referred to the banking committee, which has yet to take up any specific legislation in response to the bank failures.
The Failed Bank Executives Clawback Act was just one of several pieces of legislation championed by Sen. Elizabeth Warren, a longtime skeptic of big banks.
In a statement Monday, the Massachusetts Democrat said the failure of First Republic “shows how deregulation has made the too big to fail problem even worse.”
She added, “a poorly supervised bank was snapped up by an even bigger bank—ultimately taxpayers will be on the hook. Congress needs to make major reforms to fix a broken banking system.” More