New York Still Has Enough Rich People to Pay the Bills
The vast majority of New Yorkers leaving for other states make less than $250,000 a year and are probably motivated more by high housing costs than high taxes.
New York state and city tax revenue have held up better than anyone expected in mid-2020.
Photographer: Joe Raedle/Getty Images
In the early months of the Covid-19 pandemic, many people with the means to do so left New York City and New York state. With state finances in particular highly dependent on high earners’ income taxes, this was a worrying development.
The pandemic asset-price boom, plus a 2021 state income tax increase for those earning more than $1.1 million, at first overwhelmed any migration effects. As of April 2022, New York state personal income tax receipts had risen 58.5% from their 2019 levels while federal individual income tax receipts were up 49.3%. As markets slumped, though, New York’s personal income tax receipts fell much further than the federal government’s. When I wrote about the state’s income tax predicament last May, it seemed to me that the tide had gone out and revealed New York to be swimming naked, to borrow one of Warren Buffett’s favorite market metaphors.