Tax-The-Rich Backfires — Guess Where It Went

Statue of Liberty with New York City skyline background.

New federal tax return data show New York lost tens of thousands of filers and about $10 billion in income in a single year, exposing the steep price of “tax the rich.”

Story Highlights

Internal Revenue Service migration data show New York’s net loss of roughly 72,000 to 74,482 tax returns in 2022–2023.
Departing taxpayers took nearly $10 billion in adjusted gross income with them, second only to California in losses.
Over recent years, New York shed over $100 billion in net income while Florida posted large gains, shifting America’s tax base.
Progressive analysts dispute a tax-driven exodus, saying millionaire migration rates stay low even after hikes.

IRS Filings Point to Major Outflow and Lost Income

Internal Revenue Service migration tables for 2022 to 2023 show New York with a net outflow of roughly seventy to seventy-five thousand tax returns, concentrated among working-age adults. Those exits carried away close to ten billion dollars in adjusted gross income. Reporting on the federal data ranks New York behind only California for lost income in that period. The loss matters because high earners supply a large share of personal income tax receipts that fund schools, safety, and transit.

Times Union reporting on the same Internal Revenue Service release underscores that departing households took billions out of New York’s economy in 2021 to 2022, setting up a multi-year pattern of wealth leaving the state. A regional policy brief citing the data placed the income loss near ten billion dollars year over year as residents resettled elsewhere. The combination of fewer filers and lower in-state income reduces the base that state and city budgets count on during slower economic cycles.

Longer Trend Shows Income Shift Toward Low-Tax States

Analysts tracking multi-year flows say the shift did not happen overnight. Over recent years, New York posted more than one hundred billion dollars in net income losses while Florida gained strongly, according to summaries of the Internal Revenue Service series. Those gains align with Florida’s no-state-income-tax stance, warmer weather, and business-friendly rules. The imbalance raises a warning for Albany and New York City: when earners move, employers, investment, and charitable giving often follow close behind.

Some figures also show Florida now hosting more resident millionaires than New York, a reversal that would have sounded unthinkable a decade ago, based on the same set of tax return counts referenced by commentators using federal data. If the high end of the tax base reshapes around states with lower taxes and simpler rules, New York faces a tougher climb to sustain services without broad hikes. That is the bill that “tax the rich” backers rarely discuss when they promise easy money from a small group at the top.

Progressive Counterargument Challenges “Tax Flight” Link

The Fiscal Policy Institute, a progressive think tank, disputes that taxes drive the outflow. Its 2023 and 2025 reports say high earners move less than other groups and that migration returned to pre-pandemic norms after 2021, with no clear jump tied to rate hikes. A 2025 update analyzing state filing data further argues that “tax flight” among top earners is a myth and that wealthy filers continued to anchor the personal income tax base after recent changes. Their stance has support in some academic literature.

That debate leaves policy makers with a split screen. On one side, federal filings document fewer returns and billions in income leaving New York over several years. On the other, advocates say the cause is not tax rates but housing costs, public safety, schools, and lifestyle choices, and they cite stable millionaire filing patterns to make their case. Both realities can be partly true. People move for many reasons. But budgets must still add up when the base shrinks, no matter why people left.

What Albany’s Choices Mean for Families and Jobs

Legislators in Albany now face a clear test: grow the tax base or watch it erode. When lawmakers target a narrow group with higher rates, they risk chasing away the very dollars that fund core services. Internal Revenue Service data showing lost returns and income are not theory; they reflect choices families already made with their feet. Pro-growth reform can help. Simpler taxes, safer streets, and reliable transit can make New York worth the price again for employers and skilled workers.

Mamdani’s FY2027 budget is a $125.8 billion exercise in fiscal illusion, class-war posturing, and deferred catastrophe.

It balances this year only through a combination of Albany bailouts, pension-accounting sleight-of-hand, one-shot “savings,” a new tax on second homes, and…

— Shadow Banned (@ttstrac) July 7, 2026

New York leaders should focus on stability, not new surtaxes. The federal numbers are a warning flare, not a death sentence. States that respect work, save taxpayers’ money, and defend economic freedom tend to gain people and paychecks. If New York trims red tape, reins in spending, and stands down from class-war taxes, families and small businesses will notice. If it does not, the Internal Revenue Service tables will keep telling the same story, one lost return at a time.