New tax data show that New York’s effort to “tax the rich” has coincided with nearly $10 billion in income leaving the state in a single year, raising hard questions about who is really paying the price.
Story Snapshot
- New York lost about 74,000 tax-filing households and roughly $9.9 billion in income between 2022 and 2023.
- Over recent years, New York has shed more than $10 billion in taxable income multiple times as residents move to other states.
- Florida and other lower-tax states are gaining billions in income that New York is losing.
- Experts disagree on whether higher taxes on the wealthy are causing an exodus or if other costs are pushing people out.
New IRS Data Reveal Billions in Income Leaving New York
New numbers from the Internal Revenue Service show New York lost a net 74,482 tax returns to other states between 2022 and 2023, a drop that lines up with about $9.9 billion in adjusted gross income leaving the state. That means tens of thousands of households, many in their prime working years, packed up and took their paychecks, savings, and future tax payments somewhere else. For a state that depends heavily on income taxes, that kind of loss hits the budget and services regular people rely on.
Internal Revenue Service migration data also place New York among the top losers in the country for total income moved out, ranking just behind California. At the same time, lower-tax states like Florida and Texas have posted some of the largest gains in both new filers and total income. When someone leaves New York, the income loss per person is especially high, suggesting that many of those who move are earning well above average and taking a lot of tax revenue with them.
Longer-Term Pattern: Income Flows South While Albany Raises Rates
Over the last several years, the pattern has been the same: more people and more money are moving out of New York than in. Earlier Internal Revenue Service data show New York lost over $10 billion in taxable income between 2021 and 2022 alone as residents relocated to other states. Florida has been one of the biggest winners, picking up billions of dollars in income that used to be taxed in New York and, with it, a stronger tax base to fund its own programs and infrastructure.
Between 2021 and 2022, about 476,000 New York filers and their dependents moved to other states, with large shares heading to Florida and New Jersey. Those movers took more than $14 billion in state-adjusted gross income with them during those two years. For families still in New York, that raises an uncomfortable concern shared by people across the political spectrum: as the tax base shrinks, will lawmakers raise rates again on those who stay, or cut services that middle and working class residents depend on?
Who Is Leaving: Middle Earners, High Earners, or Both?
State migration figures show that people between ages 26 and 44 make up much of the net outflow, which points to working-age adults, many with children, leaving during their prime earning years. Some data and commentary suggest that wealthier households are overrepresented in the dollars leaving the state, since New York loses over $60,000 in income per departing resident on average. That means even a smaller number of high earners can translate into a large hit to total taxable income and future revenue.
However, research from the Fiscal Policy Institute, a New York-based think tank, challenges the idea of a mass “millionaire exodus.” Their analysis of state tax filings finds that top earners historically move out at lower rates than other income groups and that there was no major jump in wealthy out-migration after New York raised top income tax rates in 2021. They argue most movers are middle- and working-class residents squeezed by housing costs and overall affordability, not just high-income households fleeing taxes.
Do Higher Taxes on the Rich Cause the Exodus?
New York lawmakers raised income taxes on high earners in 2021, pushing the top rate to around 10.9 percent for the very highest incomes. Critics say this “tax the rich” policy is backfiring by driving out the very taxpayers who fund a huge share of the state budget. They point to the billions in income leaving and the growing gap between states like New York and Florida as proof that heavy tax burdens are pushing people and capital away.
Mamdani’s FY2027 budget is a $125.8 billion exercise in fiscal illusion, class-war posturing, and deferred catastrophe.
It balances this year only through a combination of Albany bailouts, pension-accounting sleight-of-hand, one-shot “savings,” a new tax on second homes, and…
— Shadow Banned (@ttstrac) July 7, 2026
Supporters of higher taxes respond that many independent studies find only a weak link between state tax rates and where the rich choose to live. The Fiscal Policy Institute’s recent work concludes “tax flight” among the top one percent is largely a myth, noting that millionaire households in New York actually grew overall in recent years even as some residents left during the pandemic. They say housing costs, remote work, and quality-of-life concerns matter more than tax brackets when people decide whether to stay or go.
Shared Concerns: A Shrinking Tax Base and Rising Distrust
While experts fight over what is driving the numbers, many regular New Yorkers and Americans watching from other states see the same troubling picture: a government that seems unable to keep people, jobs, and opportunity from slipping away. Conservatives see proof that ever-higher taxes and spending push success out of reach and punish families who try to build wealth. Liberals worry that budget gaps will worsen inequality as programs for the poor and vulnerable face cuts while the rich find ways to avoid the burden.
Across the political spectrum, there is a growing sense that powerful interests and long-time insiders in both parties benefit from the current setup while ordinary workers and small business owners pay the bill. Large swings in income across state lines, paired with confusing and sometimes conflicting official messages, deepen the feeling that the system is rigged and that leaders are hiding the costs of their choices. New York’s experience with “tax the rich” policies and the newly exposed migration data will likely fuel that debate nationwide as other states consider similar paths.
Sources:
timesunion.com, fiscalpolicy.org, upstateunited.com, youtube.com, kiplinger.com, prospect.org
