According to the latest figures from the New York State Department of Taxation and Finance, New York’s millionaire exodus that spiked during the pandemic is continuing. The data showed that 1,453 residents worth over $25 million left the Empire State in 2021. While that is 520 fewer than the number that fled during the height of the COVID-19 lockdowns and social distancing, it is still significant, particularly as the top one percent of earners in New York contributes nearly half of the state’s income tax revenue.
New Jersey, Florida, and Connecticut remain the most popular destinations for wealthy New Yorkers fleeing excessive taxes, high crime, and other quality-of-life issues. Many prominent billionaires have already left New York for tax-friendly states.
New York's millionaire exodus: 1,453 taxpayers earning more than $25M fled the state in 2021 https://t.co/mWk9odO8ri
— Daily Mail US (@DailyMail) February 23, 2023
In addition to taxes, rising crime rates in New York have also contributed to the decision of many wealthy residents to relocate. In 2022, crime in Manhattan surged 23.5%, with robberies, rapes, and felony assaults all on the rise. In addition, grand larceny, or thefts of more than $1,000, spiked by more than 60% in New York City last year.
New York’s declining population has raised concerns about the state’s tax base. Some experts warned that the loss of wealthy residents could irrevocably damage the state’s revenue base.
The exodus of wealthy New Yorkers has been linked to the state’s millionaire’s tax, introduced in 2020 by then-Governor Andrew Cuomo (D). The tax increased the top rate to 9.65% from 8.82%, making New York the highest-taxed state in the country. Critics argue that the tax and other quality of life issues have driven away wealthy residents who contribute a significant portion of the state’s income tax revenue.
In addition to multi-millionaires, the population decline has been pronounced among those earning between $150,000 and $750,000.
Prominent New York politicians are calling for the wealthy to stay. New York City Mayor Eric Adams (D) has urged high-income earners to remain in the state, saying he is tired of the “tax the rich” policies favored by the progressive wing of his party. However, Adams has yet to propose a plan to lower taxes on wealthy New Yorkers.
New York’s declining population is not unique, with California losing more than half a million people since the COVID-19 pandemic. Rising housing costs in California have been cited as a critical factor behind the decline.