Finance

New York Loses Nearly $11 Billion in Taxes as Millionaires Flee, Study Finds

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Citizens Budget Commission report reignites debate over Mayor Zohran Mamdani’s “tax the rich” policy

What you need to know:

  • New York would have collected about $10.7 billion more in income tax in 2022 had it maintained the same share of American millionaires recorded in 2010. The state’s share dropped from 12.7% to 8.7%, the largest reduction in the country.
  • The number of millionaires in New York doubled between 2010 and 2022, but in California and Texas it more than tripled, while in Florida it quadrupled. As a result, the state dropped to 4th place in the national ranking.
  • The top 1% already pays about 45% of all state income tax. With state and local taxes per capita at $12,506 — roughly 78% above the national average ($7,038) — experts warn that any further loss of these taxpayers could increase pressure on the budget and the funding of social programs.

New York is experiencing an exodus of high-income taxpayers that’s already costing nearly $11 billion a year in tax revenue, according to a study of 2022 data by the Citizens Budget Commission (CBC).

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The findings come amid fears that socialist Mayor Zohran Mamdani’s “tax the rich” push could end up driving even more millionaire taxpayers out of the city.

Mayor Zohran Mamdani speaking during an address in July 2026. (Photo: NYC Mayor’s Office / CC BY 4.0)

The Shrinking Millionaire Share — And How Other States Stack Up

Between 2010 and 2022, New York’s share of the nation’s millionaires plunged from 12.7% to 8.7% — the steepest drop of any state. In raw numbers, the state was home to roughly 34,000 millionaires in 2022.

The CBC report reveals a key detail behind that growth:

  • New York’s millionaire count doubled over the period.
  • In California and Texas, it tripled.
  • Florida quadrupled.

As a result, New York slipped to fourth place in the national millionaire rankings, trailing those three states. Meanwhile, Florida and Texas keep growing their millionaire ranks, scooping up exactly the crowd leaving the Empire State.

The Fiscal Fallout — And New York’s Reliance on the 1%

Had New York held onto its 2010 share, personal income tax collections would have been roughly $10.7 billion higher in tax year 2022.

Jared Walczak of the Tax Foundation points to the structural risk: “In New York, the top 1% pay about 45% of all state income taxes. Revenue is heavily dependent on these individuals staying put.”

Other findings from the study underscore the pressure:

  • New York collects $12,506 per capita in state and local taxes, versus the national average of $7,038 — about 78% higher.
  • The tax base is shrinking even as budgets stay bloated.

In another widely publicized case, Elon Musk moved his residence — and later the headquarters of X and SpaceX — from California to Texas amid criticism of the Golden State’s heavy tax burden.

The Ken Griffin Penthouse Video That Became a Symbol of the Feud

Mamdani gloated about the tax in a social media video filmed outside billionaire Ken Griffin’s $238 million Manhattan penthouse.

The stunt didn’t sit well with the hedge fund titan, whose firm signaled it could scrap a $6 billion-plus Park Avenue development — fueling fears of an even broader exodus.

On Thursday, July 23, Mamdani announced that notification letters were going out to owners of high-end properties: “If you own a second home in New York City valued at more than $5 million, check your mailbox when you get back to the five boroughs — because you’ve got mail,” the mayor wrote.

The tax, approved in May, imposes an annual progressive rate of 0.8% to 1.3% on properties that aren’t the owner’s primary residence and are valued above $5 million, and is projected to raise $500 million a year across more than 11,000 properties.

The Policies That Squeezed the Tax Base

Experts point to a string of decisions dating back to 2010:

  • Former Gov. Andrew Cuomo’s income tax hike on high earners during the pandemic.
  • Projections that the state’s Medicaid spending will hit $58 billion a year by 2029 under Gov. Kathy Hochul.
  • The 2019 rent control law and the green energy mandate, which reduced housing supply and drove up energy costs, according to Ken Girardin of the Manhattan Institute.

Mamdani: “The Fears Are Overblown”

Asked about the study, Mayor Mamdani said fears of a mass exodus are overblown. He argued New York actually gained more millionaires following previous tax hikes in Albany.

“I’ve made it clear that we live in the richest city in the richest country in the history of the world, and it is unacceptable that one in four New Yorkers lives in poverty. I believe the wealthiest can do a little more.”

The raw numbers give some backing to Mamdani’s claim — the state’s total millionaire count did grow (it doubled). The problem, per the CBC, lies in the relative loss of share and the speed at which other states are capturing that wealth.

Who Pays the Price If the Exodus Continues?

Steve Fulop of the Partnership for New York City warns: “If we don’t course-correct […] the affordability crisis will only get worse, because the people leaving are the ones paying the majority of a budget that funds social programs.”

The situation has pushed the state government to raise taxes on everyone else rather than cut state spending — a cycle that experts say could worsen if the state doesn’t change course.

Wall Street remains the nation’s financial capital, but its edge is fading. Alternatives like the Texas Stock Exchange are gaining ground. The question that remains is the same one: how long can the “golden goose” withstand the pressure?

Sources and References:

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