A report released on Saturday, November 11th, shows that New York has experienced a notable exodus of its wealthiest residents over the past four years. The state, grappling with high tax rates, has seen 10 billionaires relocate, with a significant number choosing Florida for its favorable tax climate. This migration has led to a substantial decrease in tax revenue for New York.
In 2019, New York was home to 72 billionaires on the Forbes 400 list of the wealthiest Americans. However, this year, the number has reduced to 62. Notable departures include investor Josh Harris, now worth $6.9 billion, hedge funder Daniel Och with a net worth of $3.6 billion, and investor Carl Icahn, also valued at $6.9 billion. Their departure is largely attributed to New York’s high tax burden, with the state’s top earners facing a staggering 14.8% tax rate.
Jared Walczak, vice president of the National Tax Foundation, explains that New York’s high tax rate on top earners means living almost anywhere else can significantly reduce their tax burden. Florida, with no individual income tax, has become an attractive destination for these billionaires.
The impact of this billionaire exodus on New York’s tax coffers is significant. The state relies heavily on the top 1% of taxpayers, who contribute 42% of its tax receipts. Ken Girardin, research director at the Empire Center for Public Policy, notes that the loss of a single billionaire earning $100 million per annum can result in an $11 million yearly shortfall in state taxes.
This trend poses a substantial threat to government services in New York. The state’s ability to fund services like the Metropolitan Transportation Authority (MTA) and public schools heavily depends on continued tax contributions from a small group of high earners. As these individuals leave, the state’s fiscal stability and capacity to maintain these services are jeopardized.
Interestingly, the youngest New Yorker on this year’s Forbes list is 38-year-old Josh Kushner, founder of Thrive Capital. His net worth stands at $3.6 billion, and he is notably the son of Charles Kushner, a real estate mogul who was pardoned by President Donald Trump in 2020.
The collective net worth of the remaining 62 New York-based billionaires is a staggering $562.3 billion, with Michael Bloomberg being the wealthiest New Yorker and the eighth richest American, boasting a net worth of $96.3 billion.
This billionaire migration from New York to Florida reflects broader trends in wealth management and tax strategy, highlighting the delicate balance states must strike in tax policy to retain their wealthiest residents.
