New York is falling behind in the race to attract high-income earners — and it’s costing the state billions in lost tax revenue, according to a new report by the nonpartisan Citizens Budget Commission.
While New York State nearly doubled its number of millionaires from 2010 to 2022, states like Florida, Texas, and California outpaced it significantly, with Florida quadrupling its millionaire population during the same period.
If New York had simply kept pace, the city and state could have collected an additional $13 billion in taxes in 2022 alone — $10.7 billion for the state and $2.5 billion for the city, the report said.
The decline has serious implications. Millionaires make up just 1% of New York taxpayers, but contribute 40% of the city’s income tax revenue and 44% of the state’s. In total, high earners contributed $34 billion in taxes in 2022, with $28 billion coming from residents.
New York has slipped from second to fourth place nationally in millionaire households, overtaken by Florida and Texas. Although California retains the top spot, it’s still adding wealthy residents much faster than New York — despite also having high taxes.
Why the Wealthy Are Leaving
A mix of high taxes, rising crime concerns, quality-of-life issues, expensive housing, and the shift to remote work are pushing wealthy New Yorkers to seek greener pastures — often quite literally.
Florida has become a major draw, offering zero state income tax, pro-business policies, year-round sunshine, and a relaxed lifestyle, according to real estate broker Jay Batra. Many wealthy clients maintain a foothold in Manhattan but plan to downsize to a pied-à-terre as their work and family needs evolve.
Others are staying closer to home. In Connecticut’s Fairfield County, luxury property specialist Libby McKinney Tritschler reports a surge in interest from New Yorkers upgrading second homes into permanent residences — particularly in affluent areas like Southport.
The Stakes Are High
Citizens Budget Commission president Andrew Rein warned that New York’s “value proposition” is faltering. “We see fewer millionaires moving here and more moving out,” he said. “Simply put, New York is no longer competitive.”
He emphasized that while taxes matter, factors like affordability, safety, public services, and economic opportunity also influence where wealthy people choose to live.
The report also highlights that New York now imposes the highest income tax burden on top earners in the country. Someone earning $25 million a year in New York City faces a combined state and city tax rate of 14.776%, compared to 13.3% in California. Even those making $2.2 million pay more in New York than on the West Coast.
A Hot Political Topic
The findings come just nine weeks ahead of New York’s mayoral election, where economic inequality and affordability dominate the conversation.
Mayor Eric Adams has argued that retaining wealthy residents is critical to maintaining the city’s fiscal health. “I don’t want to say to billionaires, ‘We don’t want you here,’” Adams said recently. “The money we make from things like stock transfer taxes impacts our budget.”
Meanwhile, Democratic nominee Zohran Mamdani has proposed a new 2% millionaire tax to fund free child care and public transit, drawing criticism from opponents who say such policies could accelerate the exodus.
Former Gov. Andrew Cuomo slammed Mamdani’s plan as “class warfare,” echoing the Citizens Budget Commission’s caution against raising taxes further.
As the debate continues, the report sends a clear message: Without a strategy to attract and retain wealthy residents, New York risks deepening its fiscal challenges — and losing ground to more competitive states.
