Finance
Despite initial concerns that the COVID-19 pandemic would lead to a mass exodus of high earners from New York, the state has experienced a remarkable increase in its millionaire population. Between 2020 and 2022, New York gained an impressive 17,500 millionaire households, significantly outpacing the loss of 2,400 millionaire households during the same period12. This growth underscores the resilience of New York's economy and its enduring appeal to high-income individuals.
Economic Factors Driving Growth
The surge in millionaire households can be attributed to several economic factors:
Strong Financial Markets: The year 2021 was particularly robust for financial markets, with the collective income of tax filers earning over $1 million rising by 40% year-over-year to $407.5 billion2. This boom helped create new millionaires and bolstered the wealth of existing ones.
Tax Environment: Contrary to popular narratives, tax increases in New York have not significantly impacted the migration patterns of high earners. In fact, the Fiscal Policy Institute found that high earners are more likely to move to other high-tax states rather than low-tax ones14.
Post-Pandemic Recovery: The temporary migration of high earners during the pandemic was largely driven by work-from-home arrangements and a desire to leave urban areas like New York City. However, by 2022, migration rates had returned to pre-pandemic levels1.
Demographic Shifts
New York City remains a hub for wealth, with a staggering 350,000 millionaires, representing one in every 24 residents3. This concentration of wealth is unmatched globally, with the city hosting 60 billionaires and 744 individuals with investable wealth exceeding $100 million3.
Migration Patterns
While some high earners did leave New York during the pandemic, they predominantly moved to other high-tax states like Connecticut, New Jersey, and California. This trend suggests that factors other than tax rates, such as lifestyle and professional opportunities, play a significant role in their migration decisions2.
Conclusion
New York's ability to attract and retain high-income individuals is a testament to its economic vitality and the diverse opportunities it offers. Despite some departures to lower-tax states like Florida, the overall trend indicates that New York remains a magnet for wealth and talent.
Sources:
Fiscal Policy Institute. "Who is Leaving New York State? Part I: Income Trends." December 2023. https://fiscalpolicy.org/migration
Paulina Cachero. "New York Gained More Millionaires Than It Lost During the Pandemic." WealthManagement.com, December 6, 2023. https://www.wealthmanagement.com/high-net-worth/new-york-gained-more-millionaires-it-lost-during-pandemic
New York Post. "One in 24 NYC residents is now a millionaire: report." May 7, 2024. https://nypost.com/2024/05/07/business/one-in-24-nyc-residents-is-now-a-millionaire-report/