Richest NYC residents face 52% income tax in new hike as many top earners continue to leave the state

by Joel Abbott · Apr 9th, 2021 2:35 pm
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Last Updated Apr 11th, 2021 at 12:27 am

The top earners in New York City now face a combined income tax of almost 52% after the state senate passed a bill Tuesday to raise taxes on those making more than $1 million a year.

Individuals who make more than $1 million will now pay 9.65% in state taxes alone. Those who make between $5 million and $25 million will pay 10.3%, and those making more than $25 million will pay 10.9%. Those increases, combined with personal income and federal taxes, could push top marginal personal tax rate for city residents to nearly 52%.

Critics of the tax hike include two Democratic candidates for NYC mayor, banker Ray McGuire and former presidential candidate Andrew Yang.

"What the state is considering will push companies and higher-income families out of the city, which will cost us tax revenue and jobs," said McGuire.

Others, such as Rebecca Bailin of the pro-tax advocacy group Invest in Our New York, said the tax was needed and that it would not drive the rich away.

"We have had a decade of austerity, asking for working classes and poor New Yorkers to pay for public schools and libraries and garbage pick-up, shouldering an unfair burden," she said. "What we find is that it is the poor people who end up leaving under those conditions, not the rich folk."

Other evidence, however, shows that the demographics of New York are changing rapidly. Around 3.57 million people moved out of NYC in 2020, with 3.5 people replacing them. However, the average salary of those leaving was $140,000, while the average salary for new residents was only $82,000.

Other reports show that the city's wealthiest residents are increasingly looking to move.

Miami Mayor Francis Suarez said this week that he has been talking with some of NYC's largest firms as business leaders consider relocating to Florida.

One anonymous media executive who runs a large NYC public relations firm said he has talked to at least a dozen other wealthy individuals who are considering moving out of the state due to the tax hikes.

"Moving to Florida is an active and serious conversation with my peers," the executive said. "If my kids weren't here, I would move tomorrow."


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