New York tax commissioner reports millionaires fleeing due to increased tax rates

Concerns over New York's out-migration of wealthy residents dominated discussions at the recent 2025 Joint Legislative Budget Hearing, as lawmakers scrutinized the implications of the proposed five-year extension of the ultra-millionaire tax. The meeting revealed troubling trends, with nearly half of the state's personal income tax receipts coming from just 2% of taxpayers, raising alarms about the sustainability of this revenue source amid increasing out-migration.

The state's tax department reported a slight increase in the number of income millionaires—those earning over $1 million annually—up by five to approximately 86,000 in tax year 2023. However, this figure is overshadowed by the broader trend of New Yorkers leaving the state, particularly for warmer climates like Florida and Texas. The tax department acknowledged that while there is a net out-migration across all income levels, the state is particularly losing high earners, which could have significant long-term fiscal implications.

Lawmakers expressed concern that the ultra-millionaire tax, initially enacted in 2021, may be driving wealthy individuals away, exacerbating the state's financial challenges. The discussion highlighted the need for a balanced approach to tax policy that considers both revenue generation and the retention of high-income residents.

In addition to tax discussions, the hearing also touched on the upcoming rollout of the Secure Choice retirement program, which will require employers with ten or more employees to offer retirement savings options. This initiative aims to enhance financial security for workers, but its success will depend on effective implementation and participation.

As New York grapples with these complex issues, the future of its tax policy and the potential for continued out-migration remain critical topics for lawmakers and residents alike. The implications of these discussions will likely shape the state's economic landscape in the years to come.