The city has not kept pace attracting the ultrawealthy, and that has serious economic and fiscal consequences.
Zohran Mamdani’s campaign galvanized people with its disciplined focus on affordability — promises of universal childcare, free buses and a plan to build 200,000 units of housing — paid for by increasing taxes on businesses and high-income New Yorkers.
Underlying this narrative is the entirely correct assertion that lower- and middle-income residents are struggling to make it in New York. Left out of the conversation is the fact that those with higher incomes already pay a lion’s share of the personal income taxes that fund the services so essential to the lives and livelihoods of working families.
One question that emerges is whether, over time, increasing New Yorkers’ already nation-leading taxes would play a part in decreasing the share of millionaires that call New York City home — and ultimately further squeeze the social safety net and basic services New Yorkers need to thrive.
First, some context. Throughout its history, New York City has been a magnet, attracting ambitious people from all over the world who have thrived on its opportunities. It has strived to be a generous city, from the start of its settlement houses to its nation-leading social safety net.
At its best, New York is a global powerhouse offering vast opportunities and a high quality of life to its diverse population, while providing robust services for its lower-income and higher-need residents.
Supporting New York’s expansive public services has long depended on a high-performing economy and high earners who pay a disproportionate share of the City’s personal income taxes. In fact, filers with adjusted gross income over $1 million — less than 1% of filers — paid 40% of New York’s personal income taxes in 2022. Personal income taxes will provide $18 billion in revenue in fiscal year 2026, and 22% of total City tax revenue.
So the moment is ripe for this question: Do the mayor-elect’s proposed tax increases risk adverse consequences? What would be the impact on top earners, who already pay the nation’s top marginal tax rate, especially when positive ratings for services and quality of life in the city have declined?
To sustain its economy and government, New York City doesn’t just need to keep the millionaires it has; it needs to keep growing and attracting new ones.
The answers matter. A recent report by the Citizens Budget Commission, where I work, delved into these questions. “The Hidden Cost of New York’s Shrinking Millionaire Share” found that while the number of high earners is growing all across the country, New York City and State — historic epicenters of economic opportunity — are losing ground.
This is important, because the problem is sometimes framed as “millionaire flight,” as though all of the city’s millionaires might pick up and leave as Mayor-elect Mamdani starts to put his agenda in place. History shows this is unlikely to happen; indeed, New Yorkers across the income spectrum have moved out. People see that fact and conclude that if millionaires won’t leave en masse, there’s no problem to worry about.
It’s not that simple. To sustain its economy and government, New York City doesn’t just need to keep the millionaires it has; it needs to keep growing and attracting new ones. Between 2010 and 2022, the share of U.S. millionaires living in New York City fell 35%, from 6.5% to 4.2%. Statewide, the share fell by nearly one-third, from 12.7% to 8.7%.
Yes, the number of millionaire taxpayers in New York State nearly doubled over the same time period, from 35,800 to almost 70,000 — but that growth lagged far behind national trends. Nationwide, the number tripled, as it did in Texas and California. Florida in particular witnessed explosive growth, with its millionaire ranks quadrupling in the same period.
This relative loss of the wealthiest to other parts of the country has real fiscal impacts: If the City had maintained its 2010 share, it would have collected $2.5 billion more in personal income tax revenue in 2022 alone. The State would have collected an additional $10.7 billion that year.
To put that in perspective, Mayor-elect Mamdani’s campaign projected the proposed tax increases could raise between $9 billion to $10 billion per year.
Once the unmatched hub of finance and culture, New York City’s 2.3 percentage-point drop in its share of millionaires shows how much ground and influence has been lost to rival metropolitan areas.
Importantly, it’s not only millionaires who are choosing other states to call home. Domestic outmigration has been sapping New York of residents of all incomes, races and ages. In 2024, 91,000 more residents moved out of the city to other parts of the U.S. than moved in.
Why is that? Why is New York, New York, big city of dreams, of money-making, of finding whatever you seek, sending away more and attracting fewer? What’s the problem?
Filers with incomes over $1 million make up less than 1% of taxpayers — yet pay 40% of the city’s personal income taxes.
High income taxes are one factor — New York State’s and City’s combined top marginal rate, 14.776% for the highest earners, tops the nation. It exceeds California’s 13.3%, New Jersey’s 10.75% and Massachusetts’ 9.0%. Nearly all of NYC’s suburbs top out at 10.9%. Florida and Texas have no personal income tax at all. Mayor-elect Mamdani’s proposed increase would take this tax to 16.776%. That may or may not prompt the wealthiest among us to up and leave; only time will tell.
But taxes are not the only factor; California’s share of millionaires grew while New York’s shrank. The simple truth is more New Yorkers feel the City’s value proposition is faltering. The city’s cultural and economic magnetism is becoming harder to justify against its high cost of living, fraying infrastructure and declining quality of life.
Housing costs are a huge factor. The severe housing shortage drives up rents and home prices, making it difficult not only for lower-income New Yorkers, but increasingly for middle-class families.
Cleanliness, ease of travel, street noise and feeling safe in a park or on the subway also weigh heavily.
CBC’s Straight from New Yorkers 2025 survey found only 34% of New Yorkers felt the quality of life was good or excellent. Just 27% rated public services the same. Notably, in 2023 and 2017, higher-income New Yorkers rated these categories better than other residents — but by 2025, the gap disappeared. Now they give the same general low marks as other New Yorkers.
Lifestyle and economic factors play a role: the pandemic accelerated remote and hybrid work, enabling some to relocate to warmer climates, lower-cost states or even farther out of the city without sacrificing career prospects. Office visits and subway ridership remain below pre-pandemic levels, demonstrating that the impact persists in 2025.
New York will never be cheap. People, and perhaps especially people with disposable income, are willing to pay some premium for New York’s unmatched amenities, but they are less willing to pay for subway delays, vacant office towers and storefronts or persistent street disorder. The issue is not merely high taxes, but low value — the erosion of the essential qualities that once justified the cost of being here.
If New York City had maintained its 2010 share of millionaires, it would have collected $2.5 billion more in personal income tax revenue in 2022 alone.
Mayor-elect Mamdani has focused on eliminating some key affordability and quality of life challenges that drive New Yorkers away, and he’s discussed the importance of improving basic city services. But paying for it all by increasing the City’s already nation-leading marginal personal income tax rates risks accelerating New York’s shrinking millionaire share and missing out on billions of dollars to fund services. What’s a better answer?
Imagine a city that offers stability for investors and affordability for tenants; that catalyzes innovation and growth while providing great services that improve everyone’s well-being — from those in need, to school children, to working families. Such a balance would deliver for all New Yorkers while attracting high earners whose taxes provide substantial revenue.
New York’s bright future depends on including all these constituencies — the financiers and the front-line workers, the landlords and the tenants, the taxpayers and service recipients — in shared civic prosperity.
Focusing on the fundamentals strengthens New York City’s value proposition.
Expanding housing production to improve affordability is paramount to ensuring that living in New York remains feasible and attractive for a broad range of residents.
Clean and safe streets are equally vital, providing the order and quality of life that residents, businesses and visitors deserve.
High-quality and efficient public services — from transit to education — support a prosperous city. New Yorkers should not pay top dollar for mediocrity; inefficiency rips off everyone.
Stable public finances preserve services for all New Yorkers. Just like we learned from the city’s 1975 fiscal crisis, expanding services without minding the store ultimately hurts those most in need.
These investments will strengthen the foundation for long-term prosperity across all income levels, while helping retain, attract, and grow millionaires. Whether New York City is able to do this successfully will determine whether it continues to shrink in influence — or rediscovers its role as the city that makes prosperity possible for all.