A large percentage of New York City’s highest earners have left the state for southern locales with low-income taxes.
- Data from the New York City Independent Budget Office shows that the number of earners making $150,000 to $750,000 decreased by 6%, and earners over $750,000 decreased by 10% between 2019 and 2020.
- This could heavily impact the city, as 40% of the city’s income revenue is accounted for by just the top 1% of wealthy taxpayers.
- The majority of those leaving have taken up residence in Florida, Texas, Arizona, and Tennessee.
Why It’s Important
Increasingly, data is showing that wealthy people are moving to states that have low-to-no income tax—and they are leaving states with high taxes. Of course, there is no single reason why people are leaving cities like New York. High tax rates are the primary culprit for losing the city’s highest earners, notes Yahoo Finance.
The Foundation For Economic Education places the blame on a combination of high taxes, infrastructure problems, heightened pandemic restrictions, a fracturing small-business economy, and a decreased quality of life. Some 300,000 New Yorkers moved in 2020 alone, causing a shortage of moving trucks, record numbers of vacant apartments, and a 7.1% decrease in rental prices.
The exodus will be a significant economic boost for the states taking in these new taxpayers. Florida alone gained more than 32,000 high-earning taxpayers in 2020. As we previously reported, many southern states like Mississippi see opportunities in incentivizing out-of-state migrants through low-income taxes, warm climates, looser pandemic restrictions, strong job markets, pro-business policies, and less expensive homeownership opportunities.
“After spending my entire career in New York, while I certainly do not wish to retire, I’ve decided that at this point in my life, I’d like to enjoy a warmer climate and a more casual pace year-round,” writes former New York billionaire activist Carl Icahn.
“It’s time to deliver lasting tax relief to Arizona families and small businesses so they can keep more of their hard-earned money. This tax relief keeps Arizona competitive and preserves our reputation as a jobs magnet and generator of opportunity” says Arizona Governor Doug Ducey