Are Rich People Leaving New York? Evidence Points The Other Way
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It’s possible that some wealthy people may consider moving out of state when their taxes rise, but studies have yet to demonstrate any statistically significant evidence for the idea. Rush Limbaugh loudly declared his departure after New York’s current surcharge was approved, but he’s likely outnumbered by others who move into New York for a job opportunity, or to be near family, or to take advantage of the concentration of business and cultural amenities supported here.
The Wall Street Journal’s Wealth Report pressed the head of the Partnership for New York City for hard data to back up the Partnership’s claims for rich people leaving New York due to tax rates. “It’s a very difficult thing to measure,” she said, and added, “We get a lot of it anecdotally. Our evidence is from conversations with lots of high earners.”
The lack of sound data methods aside, there’s reason for skepticism when anti-tax advocates base their claims on individual examples. The Partnership consistently advocates against taxes for high-income earners, so it’s reasonable to think that its anecdotal sample is not random. David Thompson of Phoenix Affluent Market, a firm that provides state rankings of high-net-worth households, commented on the fact that some of the top-ranked states have high income tax rates on the wealthy. “Most high-net-worth households don’t base their living decision on tax rates, but on things like quality of life, access to good education, infrastructure and culture,” he told the Journal’s Wealth Report. New York, particularly Manhattan, has a special advantage for attracting and retaining wealthy residents: its cultural and business amenities and infrastructure. The fact that the vast majority of the state’s income is generated in New York City suggests that even relatively high state and city taxes – not to mention the cost of real estate and private school tuition – don’t scare off high earners.
Meanwhile, everyday New Yorkers face limited job prospects and declining state services. As BMCC student Jenny Perdomo told Clarion during the fight over last year’s state budget, “I think the people who are actually moving out of the city are not the rich. They’re the hard-working people, like my sister, who just recently moved to North Carolina.”
If the surcharge on New York’s highest incomes is allowed to expire, public services will deteriorate – and regular New Yorkers will suffer. We should make sure that budget decisions are based on facts, not myths – no matter how often those myths are repeated.