Most recent data shows state’s millionaire population grew even after state raised top marginal tax rate, once again debunking the tax flight myth
New York added nearly 2,000 millionaire tax filers in a single year, according to newly released IRS data. The agency’s 2023 Statistics of Income (SOI) data show the number of New Yorkers reporting more than $1 million in income grew about 3%, shortly after the state raised its top tax rate on high earners. Far from triggering the millionaire exodus warned about, the new figures cut at the heart of one of the most persistent arguments against millionaire surtax proposals.
In New York, tax opponents have repeatedly claimed – without evidence – that any new taxes on the wealthiest New Yorkers would cause tax flight. But if New York’s recent history is any guide, the opposite is more likely: When the state made a similar bet on its highest earners in 2021, they stayed – and grew in number anyway.
If the past is prologue, the SOI data suggest few, if any, of the city’s wealthiest residents will leave as a result of a modest tax. Instead they are likely to remain rooted in the social, business, and economic networks that make New York uniquely valuable to them.
Groundwork Collaborative President and CEO Lindsay Owens shared her reaction to the data:
“If there was any merit to the myth that tax increases on New York’s wealthy drive them away, the new IRS data should show it. It doesn’t – New York’s millionaire population kept climbing years after the state raised taxes on top earners. This is the final nail in the coffin: tax flight is nothing more than a myth, and should be given as much credence as flat earthers.”
Background
New IRS data shows New York’s millionaire population grew, even as the number of millionaires nationwide shrank.
Opponents of a wealth tax claim such an adjustment would chase millionaires out of the city. The data suggests otherwise.