New York's millionaire exodus left a $12.2 billion hole in state finances: Report

New York has lost an estimated $12.2 billion in annual tax revenue over the past decade as thousands of high-income households moved out of the state, according to a new report by the National Taxpayers Union Foundation (NTUF).

The study says New York's share of millionaire households in the United States has steadily declined, raising concerns about the long-term impact on the state's finances and its ability to fund public services.

Millionaire share falls

According to the report, New York accounted for 12 per cent of the country's millionaire households in 2013. By 2022, that share had fallen to 8.7 per cent.

The report estimates that if New York had maintained its 2013 share, it would have had more than 95,000 millionaire households in 2022. Instead, Internal Revenue Service (IRS) data showed around 69,780 millionaire households.

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Based on the average state and local taxes paid by top earners, the NTUF estimates that the difference amounts to $12.2 billion in unrealised annual tax revenue.

The report says the loss of revenue could have implications for spending on public transport, education and infrastructure.

Heavy reliance on top earners

The study highlights New York's dependence on high-income taxpayers under its progressive tax system.

According to the NTUF, one millionaire contributes roughly the same amount in state and local taxes as 39 average New Yorkers.

As a result, the departure of even a relatively small number of wealthy households can have a significant impact on state revenues.

Many of those leaving New York have reportedly moved to lower-tax states such as Florida and Texas.

Debate over tax policy

The findings have added to the debate over taxation and public spending in New York.

Governor Kathy Hochul has previously warned about the risks of losing high-income taxpayers and has urged wealthy residents to remain in the state.

At the same time, New York City Mayor Zohran Mamdani has backed progressive tax policies, including proposals for additional taxes on people earning more than $1 million annually.

Critics argue that higher taxes could encourage more wealthy residents to relocate, further weakening the state's tax base.

Supporters, however, say affluent households are less likely to move because of business interests, professional networks and family ties, and argue that concerns over tax-driven migration are often overstated.

With budget pressures expected to grow, policymakers now face the challenge of balancing public spending with maintaining a stable tax base.