New York’s share of the nation’s millionaire households has fallen sharply, translating into billions of dollars in lost tax revenue.
From 2010 to 2022 the state’s proportion of millionaire households dropped from 12.7 % to 8.7 %, the steepest relative decline of any state. The Citizens Budget Commission (CBC) estimates that, had New York maintained its 2010 share, personal‑income‑tax collections would have been about $10.7 billion higher in the 2022 tax year. A separate analysis by the National Taxpayers Union Foundation (NTUF) using a 2013 baseline puts the annual shortfall at $12.2 billion.
Absolute millionaire numbers still rising
- Households reporting adjusted gross income above $1 million to the IRS increased from 41,520 in 2013 to 69,780 in 2022.
- If New York had kept its 2013 share, the count would have been 95,812 in 2022.
Other states added millionaires faster: between 2010 and 2022, California and Texas tripled their millionaire counts, while Florida quadrupled, moving New York from the second‑largest to the fourth‑largest concentration of millionaires nationwide.
Tax contribution concentration
- The NTUF estimates a single New York millionaire pays state and local taxes equivalent to roughly 39 average residents.
- The Tax Foundation reports that the top 1 % of earners contribute about 45 % of state income‑tax receipts.
- Per‑capita state and local collections in New York are $12,495, about 78 % above the national average, the highest in the country.
Factors influencing the decline
- Tax rates: New York City residents face the nation’s highest combined top marginal rate at 14.8 %, compared with 13.3 % in California; Florida and Texas have no personal income tax.
- Federal SALT cap: The 2017 limitation on state‑and‑local‑tax deductions increased the effective cost of New York taxes for high earners.
- Remote‑work and quality‑of‑life shifts: Post‑2020 normalization of remote work, higher housing costs, and lifestyle considerations have encouraged relocation.
Mona Shah, managing partner of Mona Shah & Associates Global, cautions that the data cannot isolate a single cause; taxes are “plainly part of the picture,” but other forces moved in the same direction.
Recent policy moves
- Governor Andrew Cuomo kept top rates largely steady until April 2021, when he signed a budget raising the top state rate for high earners, pushing the combined New York City rate to its current level.
- Mayor Zohran Mamdani (took office Jan 1) proposed adding 2 percentage points to the city’s top income‑tax rate on incomes above $1 million (from 3.9 % to 5.9 %), which would lift the combined top marginal rate toward 16.8 %. The proposal requires approval from Albany; Governor Kathy Hochul, facing re‑election, has opposed the hike while urging “patriotic millionaires” to return from Florida.
- A proposed 9.5 % property‑tax increase was abandoned after City Council opposition. The city’s $5.4 billion budget gap was ultimately closed with roughly $4 billion in state aid, agency savings, and a “pied‑à‑terre” tax on second homes valued above $5 million, projected to raise $500 million per year.
Economic context and outlook
- New York’s economy, valued at about $2.5 trillion, remains the third‑largest in the United States after California and Texas.
- Population growth in 2023‑2024 was driven largely by international immigration, not by the return of high‑earning domestic migrants, leaving a narrower base of top taxpayers.
- Research by Cornell sociology professor Cristóbal Young suggests top earners relocate far less readily than commonly assumed.
- Manhattan luxury‑home contracts rose 25 % month‑on‑month in the weeks after Mayor Mamdani’s election, indicating continued demand for high‑end housing despite tax concerns.
The combination of high marginal rates, the SALT deduction cap, and broader lifestyle shifts appears to be reshaping New York’s millionaire landscape, with significant fiscal implications for the state’s budget.
Source article: www.imidaily.com
