As special interests push Gov. Kathy Hochul to accept tax increases next year, state Comptroller Tom DiNapoli just released a report flagging that tax hikes on the rich could reduce state revenues by prompting high-earner flight.
DiNapoli’s latest numbers-crunching reveals that the state’s tax take was slammed by wealthy people fleeing the state during the pandemic.
“Policy makers need to make sure the state remains an attractive, affordable place to work and to live,” warns the comptroller, a reliably liberal Democrat.
While comprising only 1.6% of tax filers, millionaires were responsible for 44.5% of all state personal-income-tax revenues in 2021.
One in every 100 residential income-taxpayers left New York state in 2020, DiNapoli reported — with New York City taxpayers accounting for nearly three quarters of the outmigration.
And filers making over $1 million left at rates four times higher in 2020 than in 2019.
The flight slowed in 2021 to just double the pre-COVID average.
The lefty Fiscal Policy Institute just released a study claiming the rate is back to pre-pandemic levels, but that’s not based on the same, reliable IRS data but on a tiny sample size.
And, as the Empire Center’s Ken Girardin notes, DiNapoli’s analysis also shows that more than half of New York filers with income over $1 million are non-residents — they still earn serious money here, but keep their permanent residences elsewhere.
That is, they’re already halfway out the door.
The FP “study” mainly indicates that progressives mean to browbeat Hochul into dropping her “no new taxes” vow.
The left still won’t face the impact of the Trump tax-law changes, which largely eliminated the federal deduction for state and local taxes: Without SALT, New York’s high taxes on the rich hit far harder than they used to.
And the rise of remote work — and the growth of financial “hubs” in Miami and elsewhere — means these high earners have more options than ever outside New York.
Fact is, the state should be focused on keeping high earners here, not on trying to bleed them even more.
Stop pushing the golden geese into flying south permanently.
