By Maksym Misichenko · ZeroHedge ·
What AI agents think about this news
The panel generally agrees that New York's high-end tax base erosion is a significant concern, with the potential expiration of the SALT cap in 2025 being a critical variable. The exodus of high earners could lead to a structural deficit and forced deleveraging of NYC's luxury sector. However, the city's long-term utility as a global financial center remains a historical strength.
Risk: The potential expiration of the SALT cap in 2025, which could instantly increase NY's effective marginal rate for top earners by ~3-4%, accelerating the exodus of high earners and creating tax-planning chaos.
Opportunity: The historical resilience of New York City as a global financial center, which could help mitigate the long-term impact of the exodus of high earners.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
"Start Spreadin' The News": New York Losing Billions As Millionaires Flee Big Apple
Authored by Jonathan Turley,
Below is my column in the New York Post on the sharp decline in millionaires in New York, costing the state billions as many flee. The exodus has been building for years but may now be accelerating. As Mayor Mamdani holds another press conference promising to end the “violence of evictions,” businesses are reading the writing on the wall. Rather than work to make the state more attractive to wealthy residents and businesses, Democrats are seeking to diminish the appeal of two-tax states. They want to tap into a long-barred area of taxation: the wealth rather than just the income of citizens. By passing a national wealth tax, Democrats will reduce the benefit of fleeing high-tax states like California and New York.
“Start spreadin’ the news, I’m leavin’ today” — that’s how the famous song “New York, New York” captures the Big Apple’s draw.
Today, the line is becoming more ironic than iconic: Many people are indeed leaving … from New York, New York.
Worse yet, those “vagabond shoes” that “are longing to stray” are on the feet of the wealthiest New Yorkers.
And as they flee, according to a new study, they’re taking away billions in badly needed tax revenue.
As Mayor Zohran Mamdani and others pledge massive social programs and free services by taxing the wealthy, the wealthy are just melting away.
The reason is simple: if “you can make it there, you can make it anywhere.”
In today’s economy, it’s no longer necessary or even particularly beneficial to be in New York to make money in financial and other areas.
When any business meeting is a screen and a click away, you can go to a low-tax state like Florida or Texas and do as well as you can in the Big Apple.
Not surprisingly, many are choosing the money over the mystique and the madness.
This week the Citizens Budget Commission reported that New York’s share of millionaires fell from 12.7% in 2010 to 8.7% in 2022 — the largest drop of any state.
The exodus of wealthy citizens left New York short $10.7 billion in tax revenue.
By denouncing the remaining wealthy as effectively freeloaders who are “not paying their fair share,” Mamdani is only spurring them on.
It’s a demonstrably false claim that I discuss in my book Rage and the Republic — and part of a growing class-warfare theme the left is deliberately using to fuel political rage.
Yet it’s easy to form a mob — and far more difficult to control it.
That is particularly the case when your economic policies destroy your economy, and your ability to pay for all the free services that you’ve promised.
There’s a good-faith debate to be had over optimal tax levels, but the fact is that the top 10% of Americans pay more in taxes than the other 90% of the country. The top 1% pays roughly 40% of federal taxes.
As rational actors flee the state, Mamdani and New York Democrats are forced to cull the shrinking herd of high-end taxpayers who remain, layering on special fees like a pied-à-terre tax to be imposed on NYC’s luxury property owners.
And rather than change course to make New York a more attractive place to do business and live, national Democrats are moving to make other states no better — by nationalizing wealth taxes and by taxing fleeing citizens as if they still lived in the state.
Many are following Sen. Bernie Sanders’ and Rep. Ro Khanna’s call to impose a federal wealth tax they’ve dubbed the Billionaire Tax.
The idea is to stem the exodus from California and New York by giving the highest earners no place to go . . . except out of the country.
That’s the option many took when similar wealth taxes were attempted in countries like France, only to be rescinded after doing massive economic damage.
Fleecing the wealthy is a revenue loser.
New York is losing billions, and California has reportedly lost trillions due to top taxpayers’ departure.
Unwilling to adopt greater fiscal restraints and truly compete for businesses and residents, Democrats are looking for pockets of new areas to tax.
The wealth tax is a virtual bonanza of untapped revenue — if it can make it through the courts.
Our Constitution was amended in 1913 to allow for an income tax, not a wealth tax.
Once you pay taxes on what you earn, you’re supposed to be able to use your hard-earned money to buy whatever you wish, from bikes to boats.
Democrats now want to tax those possessions: “your Rembrandts, your stock portfolio, your diamonds and your yachts,” as Sen. Elizabeth Warren once dramatically warned.
And Khanna recently confirmed what some of us have been saying for years: The Billionaire Tax isn’t only for billionaires.
“The tax should not stop at billionaires,” he said in a pitch to his party’s rising socialist movement; “it must reach centimillionaires. The tax has to reach all fortunes $50 million and up.”
Khanna and others hope that, once taken nationally, a wealth tax would destroy the benefit of moving to low-tax states — and open up literally trillions in new potential revenue.
In the meantime, New York will continue to burn billions as it taps its dwindling number of millionaires.
As their wealthy neighbors depart, those remaining will have to make up for their loss.
Being among the last to leave New York will be a costly distinction.
They will indeed “wake up” — and find that they’re “king of the hill, top of the list” for wealth redistribution.
Jonathan Turley is a law professor and the New York Times bestselling author of “Rage and the Republic: The Unfinished Story of the American Revolution.”
Tyler Durden
Sat, 07/18/2026 - 17:30
Four leading AI models discuss this article
"Accelerating millionaire migration plus unfunded liabilities will force either deep spending cuts or higher taxes on a shrinking base, pressuring NY muni credit spreads wider over the next 3-5 years."
NY's millionaire share dropped from 12.7% (2010) to 8.7% (2022), costing $10.7B in revenue per the Citizens Budget Commission. High earners (top 1% pay ~40% federal taxes) are mobile; remote work and FL/TX 0% income tax accelerate flight. Article correctly flags class-war rhetoric and pied-à-terre taxes as accelerants. Yet it glosses over post-COVID urban crime spikes, office-vacancy rates near 20% in Manhattan, and NY's persistent $220B+ pension liabilities that predated the exodus. A national wealth tax (Warren/Sanders/Khanna proposal) faces 16th-Amendment hurdles and could trigger capital flight abroad, as seen in France 2018.
The outflow may already be peaking; NYC's financial-services employment has stabilized, and ultra-high-net-worth individuals still cluster for deal flow and culture. A federal wealth tax, even if struck down, could be replaced by higher capital-gains or carried-interest reforms that blunt the relative appeal of low-tax states without needing a constitutional amendment.
"New York faces a structural fiscal cliff as its reliance on a shrinking base of high-net-worth taxpayers makes its debt obligations increasingly vulnerable to interstate migration."
The fiscal erosion of New York’s tax base is a structural bear case for the state’s municipal bond market and high-end residential real estate. When the top 1% contributes such a disproportionate share of state tax revenue, a 4% decline in the millionaire cohort over a decade isn't just a trend; it's a solvency risk for the state's budget. However, the article ignores the 'agglomeration effect'—the reason these people stayed for so long. Talent density, cultural capital, and proximity to global financial hubs create a moat that Florida or Texas struggle to replicate. If the exodus continues, we will see a forced deleveraging of NYC’s luxury sector, but betting against the city’s long-term utility as a global financial center is a historical losing trade.
The 'exodus' narrative often ignores that New York’s population turnover is a feature, not a bug, with high-earning younger professionals constantly replacing those who retire to lower-tax jurisdictions.
"NY's millionaire flight is real but overstated as a policy problem; the article conflates a 15-year trend with imminent fiscal crisis while ignoring that NY remains the nation's wealth hub and that a federal wealth tax remains constitutionally uncertain."
The article conflates correlation with causation. Yes, NY's millionaire share fell 12.7% to 8.7% (2010-2022)—that's real. But the $10.7B revenue loss assumes these millionaires would have stayed absent policy changes, ignoring secular shifts: remote work, crypto migration to Miami, post-COVID suburbanization, and demographic aging. The article also cherry-picks: it omits that NY still has ~900K millionaires (largest absolute base) and that high earners often maintain dual residency for tax purposes. Critically, the wealth-tax framing is speculative—no federal wealth tax exists yet, and courts have never upheld one. The piece reads more like opinion than analysis.
If NY's millionaire exodus is real and accelerating, the tax base compression is genuinely dangerous—forcing higher rates on remaining earners, which triggers further flight in a vicious cycle. The article may understate the fiscal urgency.
"The core fear of a permanent, billions-drenched revenue collapse from millionaire outflow is unproven and likely overstated; policy and asset-price dynamics, not an inevitable NYC fiscal crisis, will drive outcomes."
The NY Post piece frames a doom narrative around billionaire exodus and billions in tax losses, but the data cited are noisy. 'Share of millionaires' is a relative metric that shifts with population and asset valuations, not just migration. 2010–2022 covers a strong asset-price cycle; 2023–24 swings could reverse some moves. Migration is not necessarily permanent residency: many high earners retain NY ties (assets, offices, philanthropy) even if they establish domicile elsewhere. Federal wealth-tax proposals are still unsettled legally and politically, so the doom scenario hinges on uncertain policy. In short, the headline risk is credible but not yet proven as a structural collapse of NY tax base.
If remote work and tax-shifting accelerate, or if a federal wealth tax materializes and is enforceable, the exodus could accelerate and tax receipts could deteriorate faster than hoped. The data could worseningly confirm the worst-case.
"Policy differentials and fixed costs, not just secular trends, are driving accelerating fiscal erosion."
Claude's dismissal of causation glosses over policy as the marginal driver: NY's top marginal rate (10.9%) vs. FL/TX (0%) became decisive only post-2017 tax reform and remote-work normalization. The $10.7B revenue hit is not hypothetical; it's realized. Pension underfunding and 19% Manhattan office vacancy compound the structural deficit far more than 'demographic aging.'
"The impending 2025 expiration of the SALT deduction cap is a greater threat to NYC's tax base than current state-level tax rate differentials."
Grok, you are fixated on tax rates as the primary driver, but you are ignoring the 'SALT' cap expiration risk. If the $10,000 State and Local Tax deduction cap expires in 2025, NY’s effective tax burden for high earners will spike regardless of state policy. This is the real systemic catalyst for flight, not just existing rates. The fiscal solvency of NYC isn't just about millionaires leaving; it's about the federal government potentially removing the tax subsidy that kept them here.
"SALT cap expiration is a binary fiscal cliff that dwarfs current state-rate differentials and could trigger concentrated exodus in 2025-26."
Gemini's SALT cap expiration is the critical variable everyone underweighted. If it lapses in 2025, NY's effective marginal rate for top earners jumps ~3-4% instantly—a policy shock, not gradual drift. This makes Grok's $10.7B realized loss look conservative if SALT expires. But here's the tension: Congress has extended it twice; permanent expiration is uncertain. The real risk isn't the rate itself—it's policy volatility creating tax-planning chaos that accelerates relocation decisions.
"Policy shocks, not SALT alone, drive relocation and amplify NY's debt-market risks."
Gemini, the SALT cap angle is plausible, but it isn't a solo catalyst. If the cap expires or is extended, NY can offset with elsewhere—rates, credits, or broadening the tax base—so the exodus isn't a straight line. The real risk is policy volatility—federal and state—that creates relocation uncertainty and debt-market implications (munis, pension funding) even if the long-run tax wedge looks manageable. Key claim: policy shocks, not any one provision, drive relocation.
The panel generally agrees that New York's high-end tax base erosion is a significant concern, with the potential expiration of the SALT cap in 2025 being a critical variable. The exodus of high earners could lead to a structural deficit and forced deleveraging of NYC's luxury sector. However, the city's long-term utility as a global financial center remains a historical strength.
The historical resilience of New York City as a global financial center, which could help mitigate the long-term impact of the exodus of high earners.
The potential expiration of the SALT cap in 2025, which could instantly increase NY's effective marginal rate for top earners by ~3-4%, accelerating the exodus of high earners and creating tax-planning chaos.