Gov. Kathy Hochul is at the center of a debate about whether to raise taxes on the wealthiest New Yorkers. Hochul has opposed tax increases since she became governor.(Will Waldron/Times Union)
Will Waldron/Times Union
ALBANY — In 2022, New York lost billions of dollars in taxable income from residents leaving the state, trailing only California for the most revenue lost, according to the most recent data from the Internal Revenue Service.
The state recorded a nearly $10 billion decrease in annual adjusted gross income from 2021 to 2022, tax data shows, with an estimated 425,000 people departing. The data, while older, gives a national perspective on New York’s out-migration challenges and comes amid a heated debate about whether New York should hike taxes on the state’s residents with the wealthiest incomes.
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The IRS data shows New York’s highest earners, as well as middle-aged individuals were most likely to leave the state. But other data available from the New York Department of Taxation and Finance shows the number of millionaires moving out of New York dropped since 2022.
Tax filers are departing many blue, coastal states with higher taxes for other parts of the country, the new IRS data shows. Other states that lost the most taxable income from 2021 to 2022 were Illinois, Massachusetts, New Jersey and Pennsylvania, according to the IRS. Florida posted the biggest gains by far, recording an increase of $21 billion in annual adjusted gross income that year, followed by Texas, South Carolina, North Carolina and Arizona.
Earlier this month, Gov. Kathy Hochul lamented New York’s “eroded” tax base and urged millionaires who support her policies to “go down to Palm Beach and see who you can bring back home.” Palm Beach County was the biggest magnet for wealth migration in the U.S., the recent IRS data shows.
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“We are in competition with other states who have less of a tax burden on their corporations and their individuals,” she said. “Remote work changed everything. There were people who could only work in an office in Manhattan or work in New York state. They were captives to our state. They were going to stay. We’ve (seen) that that’s not the case.”
But the governor faces loud cries from Democrats to her left to “Tax the rich,” especially after New York City Mayor Zohran Mamdani swept into office on a campaign promise to do just that.
IRS data shows more New Yorkers leaving from 2021 to 2022 headed for New Jersey, Florida, Pennsylvania, Connecticut, California and Texas than anywhere else. While on net the state lost tax filers, some new residents did arrive from the same states.
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Realtor.com senior economist Joel Berner said national trends across migration have stayed consistent for a few years.
“People are moving in pursuit of affordability,” he said. “The states that saw the largest gains in wealth of movers are the ones that are doing the most to increase the supply of homes and thereby lower prices.”
The decline in New York from 2021 to 2022 pales in comparison to the massive exodus the state saw earlier during the pandemic.
According to the state Department of Taxation and Finance, the number of New Yorkers who have changed their address to out-of-state locations fell in 2024 to levels similar to those before the pandemic.
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People earning $200,000 or more left at the highest rate from 2021 to 2022, followed by individuals making $10,000 to $25,000, the data shows.
The data also shows working-age people aged 26 to 44 were more likely to exit New York than other groups that year. The state documented a slight increase in tax filers under the age of 26 in that period. The data only includes people who file taxes and therefore misses the migration of low-income earners and dependent children or students.
The departures were not universally felt across New York’s counties. Seventeen of New York’s 62 counties had a net increase in annual adjusted gross income from 2021 to 2022. Ulster County saw the biggest increase in the state with a gain of $171 million in gross income, landing at No. 88 for U.S. counties with the most income growth. Other upstate counties like Saratoga, Dutchess, Ontario and Columbia counties also had upticks.
Downstate was another story, with New York County (Manhattan) documenting a loss of nearly $3 billion in gross income, the fourth-worst decline of any county in the U.S. Queens County was the seventh-worst, with Bronx, Kings, Suffolk and Nassau counties all landing in the bottom 25.
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As the state looks to finalize a budget deal, progressive Democrats are championing more tax increases for the wealthy. Mamdani has supported a two-percentage-point increase on city income taxes for about 34,000 New York City residents making $1 million or more per year. That translates to about $20,000 more in taxes owed for those individuals. He also backs a corporate tax hike.
Democrats in the Assembly and Senate have included varying ideas in their budget proposals to increase taxes on people making over $5 million and proposals to raise corporate taxes on businesses with incomes of at least $5 million a year.
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Hochul, meanwhile, has opposed tax increases in any form since she became governor.