New York Gains Millionaires Despite Higher Taxes on the Wealthy
New York, Thursday, 10 September 2026.
Recent tax data shows New York added 2,000 millionaire residents after raising taxes on top earners, challenging long-held assumptions that high tax rates drive wealthy individuals away.
IRS Data Reveals Millionaire Growth in New York
New data released by the Internal Revenue Service indicates that New York City experienced an increase in millionaire residents following tax hikes targeting the state’s highest earners [1]. The Internal Revenue Service (IRS) 2023 Statistics of Income (SOI) data, released on 3 September 2026, indicates that New York’s millionaire population grew by 2,000 in 2023 [1]. This finding challenges long-held economic assumptions regarding wealth migration and tax-induced capital flight, providing crucial data for policymakers evaluating state fiscal policies [1]. Data shows that tax filers earning between $500,000 and $1,000,000 grew by over 8,500, representing an increase of more than 7% in 2023 [1]. Conversely, the average adjusted gross income of New Yorkers who left the state from 2022–2023 dropped by approximately 15%, falling from over $125,000 to $106,900 [1]. The calculation for this decline is represented as 14.48 [1]. Groundwork Collaborative analysis claims that New York’s millionaire population continued to increase in years following previous state tax hikes on top earners, challenging the theory of tax flight [1].
Migration Patterns and Adjusted Gross Income Shifts
While New York retains high earners, broader migration data highlights complex movements of capital across state lines [3]. IRS Migration Data released in early 2026 tracks movement between 2021 tax returns and 2022 tax returns, showing billions of dollars in adjusted gross income crossing state lines [4]. Top states by net Adjusted Gross Income inflow include Florida with $20.6 billion and Texas with $5.5 billion, while New York saw a net AGI outflow of $9.9 billion [4]. The IRS Statistics of Income division provides annual U.S. migration data based on year-to-year address changes reported on individual income tax returns, tracking both inflows and outflows at state and county levels [3]. Available data sets span Filing Years 1991 through 2023, with specific metrics including the number of returns filed and total adjusted gross income data starting from Filing Year 1995 [3]. Analysts caution that for large-population states like New York, net AGI loss figures do not necessarily equate to overall economic decline despite the outflow [4].
Policy Implications and Upcoming Elections
In contrast to New York’s recent data, Illinois voters will decide on a non-binding advisory referendum regarding a proposed 3% tax on annual incomes exceeding $1 million on 3 November 2026 [2]. The proposal, HJRCA0021, was introduced in the Illinois House of Representatives in October 2025, and the Cook County Board of Commissioners voted unanimously in July 2026 to place the question on the county-wide ballot [2]. Revenue distribution for the proposed tax is structured as 50% for residential and commercial property tax relief and 50% for public education funding [2]. A study by the University of Illinois Urbana-Champaign’s Department of Labor & Employment Relations and the Illinois Economic Policy Institute projects the amendment could generate nearly $4 billion in additional state income tax in its first year [2]. However, the Illinois Policy Institute warns that a millionaire tax could increase marginal state income tax rates for small businesses, potentially causing a decrease in entrepreneur hiring activity [2].
Economic Impact and Future Outlook
Mayor Zohran Mamdani introduced a tax on second homes valued at $5 million or more in New York City, with rates ranging from 0.8% to 1.3%, projected to generate $500 million annually [1]. Groundwork Collaborative states that if there was any merit to the myth that tax increases on New York’s wealthy drive them away, the new IRS data should show it, but it does not [1]. Lindsay Owens, president and CEO of Groundwork Collaborative, noted that tax flight is nothing more than a myth and should be given as much credence as flat-earthers [1]. As Cook County voters weigh in on the millionaire tax referendum in the upcoming November 2026 election, the results will signal state legislature intentions to address wealth disparity [2]. The New Yorkers actually at risk of leaving the city are the lower-income workers who power the economy, according to Groundwork Collaborative analysis [1].