New York Risks Losing Millionaires and Billions in Tax Revenue
As millionaires leave for states like Florida and Texas, New York faces shrinking revenues, rising inequality, and urgent questions about its financial future.
New York is standing at a financial crossroads. Despite being home to one of the largest concentrations of wealth in America, the state is struggling to keep pace with rivals like Florida, Texas, and California. A new report warns that unless New York can attract and retain its wealthiest residents, it could lose billions of dollars in critical tax revenues that fund schools, infrastructure, and public services.
A Declining Competitive Edge in the Race for Wealthy Residents
New York faces a critical financial crossroads as it risks losing billions in tax revenues if it fails to attract and retain its wealthiest residents. A recent analysis highlights a troubling trend: while the number of millionaires in the state has grown, rival states have far outpaced New York, creating a widening fiscal gap. This shift poses a serious threat to the state’s financial health and its ability to fund essential public services.
Slow Growth Compared to Competitors
Although New York nearly doubled the number of millionaires earning over $1 million annually between 2010 and 2022, this growth pales in comparison with states like Florida, Texas, and California, where the wealthy population grew three to four times faster. As a result, New York’s share of America’s millionaires has shrunk by 31% since 2010, directly impacting the state’s tax base.
Had New York maintained its competitive position, estimates show the state and city could have collected an additional $13 billion in taxes in 2022 alone—with $10.7 billion for the state and $2.5 billion for the city. The missed opportunity in 2021, during Wall Street’s peak earnings, could have exceeded $15.3 billion.
Falling Behind National Rankings
New York has slipped from second to fourth place nationally in millionaire households, now trailing behind Florida and Texas. Even California, despite high state taxes, continues to attract wealthy residents at a faster pace. Florida, for instance, quadrupled its millionaire count between 2010 and 2022, while Texas and California tripled theirs. By contrast, New York only doubled its numbers.
Why the Wealthy Are Leaving
Experts attribute this migration to more than taxes alone. Factors such as quality of life, affordability, housing costs, crime concerns, and hybrid work models have diminished New York’s overall “value proposition.” Today, a New Yorker earning $25 million faces a combined city and state tax rate of nearly 14.8%—higher than California’s 13.3%. Even those earning $2.2 million annually pay more in New York than on the West Coast.
The Stakes for Public Finances
Millionaires are crucial to New York’s fiscal stability. They represent just 1% of taxpayers but contribute a staggering 40% of New York City’s income tax revenue and 44% of the state’s total income tax revenue. In 2022 alone, they paid $34 billion in taxes, with $28 billion coming from city residents.
But New York’s millionaire population is growing too slowly compared with its rivals. In 2010, New York City had as many millionaires as the entire state of Florida. By 2022, Florida had 56% more millionaires than New York City, signaling a dramatic shift in wealth concentration.
Political and Economic Debate
This financial challenge comes just weeks before local elections, where affordability and inequality dominate public debate. City and state leaders warn that retaining wealthy residents is essential to protecting budgets. Some propose raising taxes further on millionaires, while others caution that such measures may only accelerate their exit.
The consensus among analysts is clear: New York must strike a balanced approach to remain competitive and financially strong, ensuring it does not lose its wealthiest residents—and the billions in revenue they bring—to other states.
