The participation of New York in the population of millionaires in the United States has significantly decreased over the last decade, a trend that, according to a new report from the ''Citizen Budget Commission'' (CBC), had a strong impact on state finances. The analysis estimates that the state stopped collecting approximately 10.7 billion dollars in income taxes during the fiscal year 2022 due to the loss of competitiveness against other jurisdictions.
The study, published this Monday, concludes that New York's share among the country's millionaire taxpayers fell from 12.7% in 2010 to 8.7% in 2022, the largest drop recorded by any state. Although the absolute number of residents with high net worth increased during that period, the growth was considerably lower than that observed in states like Florida, Texas, and California.
According to the CBC, if New York had maintained the same proportion of millionaires it had twelve years ago, income tax revenue would have been nearly 10.7 billion dollars higher in 2022. The report warns that the loss of high-income taxpayers has significant consequences because the state tax system relies heavily on that group. On the other hand, the loss of citizens with more resources, the rising cost of living, and the dramatic drop in investments share a common denominator: the Democratic Party.
Thanks to the democratic policies of the last few decades, New York has lost a large percentage of millionaires and significant flows of investment
The Delirious Democratic Proposals Against Millionaires
The analysis has been published amid the debate over tax policy in New York City, where the socialist mayor Zohran Mamdanihas proposed increasing the tax burden on high-income taxpayers as part of his agenda to fund social programs and combat inequality.
The mayor's proposals have generated concern among businesspeople, economists, and representatives of the private sector, who believe that new tax increases could accelerate the departure of high-income individuals and companies to states with lower tax pressure.
The Democratic governor Kathy Hochulopposed this year to a direct increase in the income tax for the wealthiest taxpayers, although she supported the creation of a tax aimed at luxury homes used as second residences in New York City.
The measure was publicly celebrated by Mamdani through a video shared on social media in front of the exclusive penthouse of businessman Ken Griffin, valued at 238 million dollars. The gesture provoked a reaction from the founder of Citadel, who threatened to withdraw a real estate project estimated at 6 billion dollars for Park Avenue.
The proposals and measures of the communist mayor of New York City, Zohran Mamdani, have raised significant concerns among investors and business sector experts
Expert Reactions to Socialist Measures in New York
Numerous specialists believe that episodes like this fuel the perception of uncertainty among investors and major taxpayers.
Among these concerns, economists have highlighted that approximately 1% of the highest-income taxpayers contribute nearly 45% of all state income tax revenue. In that context, specialists stated that New York's fiscal stability depends on keeping that group of residents and preventing them from relocating to other states.
In addition to the measures already approved, there is a perception that Albany could continue to increase tax pressure in the coming years, a factor that could influence the relocation decisions of businesses and individuals.
Other analysts argued that New York currently ranks last in the country in tax competitiveness. High taxes hinder the attraction of new investments and favor companies and entrepreneurs relocating their operations to states with more favorable conditions. For example, several companies owned by Elon Musk have moved from California to Texas.
They also attributed part of the economic deterioration to decisions made in recent years by various Democratic state governments. Among them are the tax increase approved by former Governor Andrew Cuomo during the pandemic, the sustained growth of public spending under Kathy Hochul's administration, the tightening of rent control regulations in 2019, and various policies related to energy transition.
The New York state government has also proposed measures that increase the tax burden, creating fear in the private sector
The CBC report also shows that New York lost population compared to all other states in the country. Florida and Texas appear as the main destinations for those who left the state, while the demographic recovery recorded in New York City during 2023 and 2024 was mainly driven by international immigration.
Additionally, the study identifies an economic corridor extending from New York City and Long Island to Albany as the main driver of state growth, while large areas of the north and interior continue to experience population and workforce loss.
The organization also highlights that New York has the highest combined state and local tax burden in the country. Per capita revenue amounts to 12,495 dollars, a figure that exceeds the national average by 78%.
Texas appears as one of the favorite states for those leaving Democratic states, as seen with the recent move of Space X from California
Despite the report's conclusions, Mamdani rejected that there is evidence of a massive flight of wealthy taxpayers as a result of tax increases. The mayor argued that the number of millionaires in New York continued to grow even after previous tax increases and defended that those with greater resources can contribute more to reduce poverty in one of the richest cities in the world.
However, representatives of the business sector argue that maintaining tax competitiveness will be crucial to preserve the state's tax base.
