New York Loses Billions in Tax Revenue as Millionaire Households Continue to Leave, Report Finds

New York has experienced a significant decline in its population of millionaire households over the past decade, resulting in an estimated $12.2 billion in unrealized annual tax revenue, according to a new report released by the National Taxpayers Union Foundation (NTUF).

The report highlights a growing trend of high-income earners relocating from the state to lower-tax destinations, raising fresh concerns about the long-term impact on New York’s economy and its ability to finance essential public services.

According to the study, New York accounted for 12 percent of all millionaire households in the United States in 2013. However, by 2022, that figure had dropped to 8.7 percent, reflecting a steady decline in the state’s share of America’s wealthiest residents.

The NTUF estimates that if New York had maintained its 2013 proportion of millionaire households, the state would have had more than 95,000 millionaire households in 2022. Instead, data from the Internal Revenue Service (IRS) showed that the state had approximately 69,780 millionaire households, leaving a significant gap.

Based on the average amount of state and local taxes typically paid by high-income earners, the foundation estimates that the reduction in wealthy taxpayers translates to approximately $12.2 billion in unrealized tax revenue every year.

The report warns that the decline could have far-reaching consequences for New York’s public finances, particularly because the state relies heavily on revenue generated by high-income residents to fund critical sectors such as education, transportation, healthcare, and infrastructure development.

Under New York’s progressive tax system, affluent individuals contribute a disproportionately large share of tax revenue. According to the NTUF, the average millionaire contributes roughly the same amount in state and local taxes as 39 average New Yorkers, illustrating how the departure of a relatively small number of wealthy households can have a substantial impact on government finances.

The report also notes that many of the high-income individuals leaving New York have relocated to states such as Florida and Texas, both of which are known for having lower overall tax burdens and no state income tax. These states have increasingly attracted affluent individuals and businesses seeking a more favorable tax environment.

The migration of wealthy residents has become a growing topic of debate among policymakers and economists, with supporters of tax reform arguing that high tax rates encourage affluent taxpayers to relocate. Others contend that factors such as housing costs, quality of life, business opportunities, and lifestyle preferences also play significant roles in relocation decisions.

As New York continues to face mounting fiscal pressures, the findings of the NTUF report are expected to intensify discussions about tax policy, economic competitiveness, and strategies to retain high-income residents while ensuring sustainable funding for public services.

The report underscores the challenges facing one of America’s largest state economies as it seeks to balance revenue generation with maintaining an attractive environment for businesses, investors, and high-net-worth individuals.