New York needs more millionaires — or risks falling behind its rivals and losing billions in tax revenue, a fiscal watchdog warned in a new report that’s already roiling the mayor’s race.
The nonpartisan Citizens Budget Commission said Thursday that while New York state nearly doubled its number of millionaire earners from 2010 to 2022, other states blew past it.
California, Florida and Texas all added millionaires at a faster clip — more than tripling their totals.
That gap translates into real money. If New York had kept pace, the watchdog said, the state and city together would have collected an extra $13 billion in taxes in 2022 alone.
That slide has cost taxpayers dearly. If New York had simply held its ground, the state would have raked in an extra $10.7 billion in 2022 alone — and the city another $2.5 billion.
In 2021, the missed windfall would have topped $15.3 billion, thanks to soaring Wall Street gains.
Instead, New York has fallen from second to fourth in the nation for millionaire households, leapfrogged by Florida and Texas. California remains No. 1, but even high-tax California is adding rich residents at a far faster clip.
Florida quadrupled its millionaire ranks between 2010 and 2022, while Texas and California more than tripled theirs. Meanwhile, New York’s millionaire population merely doubled.
“We have a debate about affordability, but we need to raise more revenue,” Andrew Rein, the commission’s president, told the New York Times.
“And we can raise even more revenue if we have even more millionaires.”
Millionaires remain the linchpin of New York’s finances. They make up just 1% of taxpayers but generate a staggering 40% of city personal income tax revenue and 44% of the state’s.
In 2022, they contributed $34 billion to state and city coffers, including $28 billion from residents alone.
But their numbers are growing faster elsewhere. In 2010, New York City had as many millionaires as all of Florida. By 2022, Florida had 56% more.
The report warns New York’s “value proposition” has faltered: sky-high taxes, battered quality of life, crime worries, hybrid work and soaring housing costs have dulled the city’s appeal.
“Simply put, New York’s value proposition has not been attractive enough to keep up with millionaire growth nationwide,” the report concluded.
Making matters worse, Gotham now punishes its highest earners with the steepest tax rates in America. A New Yorker making $25 million a year pays 14.776% in state and city income tax, compared to 13.3% in California.
Even those earning $2.2 million pay more in New York than they would on the West Coast.
The findings land just nine weeks before voters in the five boroughs head to the voting stations to case their ballots in an election that has been consumed by concerns about affordability and inequality.
The Citizens Budget Commission’s push to hold onto wealthy New Yorkers echoes the arguments of Mayor Eric Adams and former Gov. Andrew Cuomo, who both say the city can’t afford to drive out its top earners.
“I don’t want to say to billionaires, ‘We don’t want you here,’” Adams said on a recent podcast.
“I know why we need them here: The money we make just on stock transfer taxes and bonuses, that actually impacts our budget.”
Cuomo blasted rival Zohran Mamdani’s plan to slap a new 2% millionaire tax as “class warfare.”
Mamdani, the Democratic nominee, wants to use the money for free child care and free bus rides — and has gone so far as to declare that “billionaires should not exist.”
Rein, the watchdog’s president, insisted to the Times that the report’s release was not political. But the parallels to the mayoral debate are glaring.
Not everyone is buying the alarm bells. Emily Eisner, chief economist at the Fiscal Policy Institute, said the rich aren’t bolting the city in response to higher rates.
Instead, she said, it’s upper-middle-class families earning $200,000 to $300,000 who are leaving fastest.
“The question is how is New York City and New York State doing, and the answer is that a lot of people are being priced out,” Eisner told the Times.
“And it’s not the millionaire class.”
