In an interview late last month, Florida’s chief financial officer said that there has been an uptick of about 900 people moving to the Sunshine State a day. He said the bulk of the move has come from high-tax states like New York. This tracks with data that Florida released in March, which estimates about 845 people moving to the state daily from April 2020 to April 2025.
As if things aren’t bad enough for the Big Apple already, the state passed a budget this year with a tax hike that will make some New York City residents pay the highest marginal income tax rate in the United States — and maybe in the western world. With the new 52% rate in place, the government may ultimately receive more of the city’s residents’ paychecks than they will keep for themselves.
Mayoral candidate Andrew Yang is pictured during a press conference outside MTA Headquarters in downtown Manhattan.
So, the home of Wall Street — the financial capital of the world — will soon have the highest taxes on capital in the country. How long will Wall Street remain in New York City? Already, major financial firms, such as Paul Singer’s Elliott Management, have left for Florida.
It turns out that business lockdowns, rising crime and high taxes are not enticing people to come back to the Big Apple.
Enter to the stage New York City mayoral candidate Andrew Yang, who recently pointed out how “300,000 people have [already] left New York City during the past year for lower tax areas like Texas and Florida.” He warns that further economic disincentives to staying in New York won’t fix the city’s budgetary and employment problems. To their credit, candidates Kathryn Garcia and Ray McGuire have also half-embraced Yang’s view, stating that New York should only use new taxes as a last resort. They’re right, and in more ways than one.
The data from December showed that the loss of tourism, jobs, and overall foot traffic because of COVID caused revenue to decline by $3 billion in New York in 2020. While current projections look better, the state controller has made clear that the city still has major financial hurdles to climb in the years ahead.
Analytics company Unacast estimates that the loss of wealthier residents has reduced the city’s taxable income by roughly $34 billion. Even with the influx of federal stimulus dollars and easing of COVID restrictions, the city doesn’t appear even close to getting its financial situation back in order.
New York’s economic crisis is so dire that a March update from the Independent Budget Office, headlined “A slow and fragile recovery,” projected that New York City won’t even regain all its lost jobs by 2025. And that’s without the recent tax hike.
The group I co-founded, the Committee to Unleash Prosperity, recently estimated that as many as one million more New York State residents would leave under the new, higher-tax regime. More taxes will cause that outmigration to become a stampede right over the bridges out of the city.
Think of what this exodus will mean for real estate values, retail sales, restaurant business and city and state tax collections.
Few of the other candidates for mayor will take on the taxman. For example, Maya Wiley is connected at the hip to de Blasio’s tax and spend policies. She was de Blasio’s former legal counsel and is his self-proclaimed ideological soulmate. Now, she has come out in favor of new tax hikes.
Yang’s opposition to new taxes is not rooted in economic ideology. He is for income redistribution policies. But he’s a businessman who sees what politicians, social workers and lawyers don’t: New York is totally taxed out.
The city’s Independent Budget Office has indicated that fewer than 20% of taxpayers who earn six figures or more provide the Big Apple with more than 80% of its income tax revenue. What happens if the geese are no longer there to be fleeced?
According to a September study conducted by the Siena College Research Institute, more than one of three of the city’s high-income earners believe it is very or somewhat likely they will relocate within two years. Four of 10 say they have already considered leaving. It’s not going to take too much more punishment for them to load the U-Haul trailers. The Manhattan Institute’s Michael Hendrix and Rockefeller College’s Don Boyd have calculated that “just a 5% one-time net increase in outmigration from New York City among those earning $100,000 or more would result in a loss of $933 million in income, sales and unincorporated business tax revenue.” This is what the city needs to spend each year to finance its Department of Health.
New York voters may not like the super-rich, but the city desperately needs them to stay afloat. Give Andrew Yang credit for bluntly acknowledging that cold splash of economic reality.
Moore is a co-founder of the Committee to Unleash Prosperity and an economist at FreedomWorks. He served as an economic advisor to Donald Trump.