Millionaire flight from New York over high taxes blows $11 billion hole in budget

A new study has shed light on the alarming trend of the wealthiest residents leaving New York State, showing that the decline in the share of millionaires cost the state about $10.7 billion in potential tax revenue in 2022 alone.

The report, prepared by the Citizens Budget Commission and cited by the New York Post, reveals that the share of American millionaires living in New York fell from 12.7% in 2010 to just 8.7% in 2022, marking the largest drop among all U.S. states during that period.

“The shrinking share of high-income taxpayers in New York has significant consequences,” the report stresses.

According to the authors, if New York had maintained the same percentage of millionaires it had a decade earlier, personal income tax revenue would have been much higher. For fiscal year 2022, the state is estimated to have lost around $10.7 billion in potential revenue.

More millionaires, but a smaller national share

Although the number of millionaires in New York has increased by roughly 34,000 compared to 2010, the growth rate has lagged far behind other states.

The number of millionaires has doubled in New York, while it has tripled in California and Texas and quadrupled in Florida.

As a result, New York now ranks fourth in millionaire count, behind California, Texas and Florida. In 2010, it held second place in the United States.

Experts emphasize the worrying nature of this trend, since high-income taxpayers provide a substantial portion of state revenue and fund most social programs.

Florida and Texas, the top destinations

The report also shows that New York has lost more residents moving to other states than it has gained from those arriving.

Florida and Texas emerge as the primary destinations for former New Yorkers, especially after the mass exodus during the COVID-19 pandemic.

The demographic recovery of 2023 and 2024 has been largely driven by immigrants arriving from outside the U.S., while domestic migration remains negative.

From an economic standpoint, development continues to be concentrated in the corridor linking New York City, Long Island and Albany, while the state’s northern and rural areas keep losing population and workforce.

New York remains the state with the heaviest tax burden

Despite this trend, New York still has the highest combined state and local tax burden in the U.S.

Per capita tax revenue reaches $12,495, or 78% above the national average.

The analysis warns that the combination of high taxes, high cost of living and the ongoing flight of wealthy taxpayers could accelerate the phenomenon even further.

Concerns have grown further after the election of New York City Mayor Zohran Mamdani, who has supported raising taxes on the wealthy and on businesses.

Warnings for the state economy

Steve Fulop, Executive Director of the Partnership for New York City, cautioned that the state must create more favorable conditions for businesses and high-income taxpayers.

“If we don’t change course and don’t make the city and state more attractive to the people and businesses that keep our economy alive, the cost of living crisis will only get worse,” he said.

According to him, the departure of these residents means losing a large chunk of the revenue that funds social programs.

Other analysts also criticize New York’s policies. They argue that measures adopted in recent years, such as strengthened rent controls and green energy legislation, have curbed housing supply, raised energy costs and made the state less competitive.

In their view, unless reforms are undertaken, New York risks falling into an unending cycle of population decline, economic contraction and a growing fiscal burden on the remaining residents.