It's a gripping scene: New York City's high-income earners packing their belongings into Rimowas and vintage Louis Vuitton suitcases in search of a better life, lower taxes, and an escape from all the ills that plague this once-beautiful metropolis: crime and disorder — men sleeping on the street, protesters blocking bridges, teenagers smoking marijuana in the park.
Unfortunately, that's just a fantasy.
Two reports analyzing migration from New York, by the Fiscal Policy Institute and the State Comptroller's Office, found that despite media frenzy, New York's wealthiest people aren't actually leaving the city in large numbers.
According to an FPI report that analyzed migration patterns in the state over the past eight years.
“While high-income migration rates have been high during the COVID pandemic, this is a temporary deviation from normal patterns, with high-income earners leaving the state at roughly one-quarter the rate of all other New Yorkers. When high-income earners leave the state, they are more likely to move to other high-tax states than to low-tax states. Most importantly, FPI's own statistical analysis of available data sources shows that high-income earners have not altered their migration patterns in response to the two most recent tax increases (2017 and 2021).”
The FPI report highlights that between 2020 and 2022, a significant number of high-income earners (defined as state residents earning more than $815,000 per year) left New York, but the numbers have since declined to normal outmigration levels. The report also states that the ability to work from home, rather than city unrest or tax increases, was the decisive driver of the outmigration trend, with 43% of high-income earners deciding to move, and concludes that there is “no evidence of tax-motivated outmigration from New York.” (It is also worth noting that even between 2020 and 2022, New York gained more high-income earners than it lost. 2,400 billionaires left the state, but 17,500 moved in, resulting in an overall increase in the billionaire population.) The Comptroller's report corroborated these findings, calling the 2020 pandemic-related outflow of New Yorkers an “extraordinary event.”
The FPI report also refutes the notion that New Yorkers are fleeing the state for lower tax locations — a classic “migration to Florida” narrative perpetuated by conservative media outlets like the New York Post. Actual migration statistics show that the majority of New Yorkers who left the state went to other higher tax states, such as Connecticut, New Jersey, and California.
So are it people who are spending $30,000 to join private spaghetti clubs who are fleeing New York City? According to The New York Times, which got a preliminary copy of the FPI report, the group leaving the city at the highest rates in 2022 were working-class black and Latino households making between $32,000 and $65,000 a year. They're leaving the city because the rising cost of living here, especially housing and child care costs, are driving them out.
If you read these reports and wonder whether the data shows a real opportunity to pay for basic necessities and expand the Social Security net by raising taxes on the super-rich, you’re not Gov. Kathy Hawkle.
“Taxes in New York state are high enough that we have to live within our means,” the governor told the Times.
