According to the New York City Independent Budget Office, the number of New Yorkers earning between $150,000 and $750,000 fell nearly 6% between 2019 and 2020.
Additionally, the number of true high-income earners earning more than $750,000 dropped nearly 10% over the same period.
Some have speculated that the wealthy elite are leaving New York City because of New York State’s high tax rates. It may affect
At a glance, the city’s top 1% of 41,000 filers pay over 40% of all income taxes. Her 450,000 filers in the top 10% pay about two-thirds of all income taxes.
That means the remaining 90% of taxpayers contribute about a third of the city’s income tax revenue.
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A report from the city’s Independent Budget Office isn’t the only indication of this migration trend.
Financial technology company SmartAsset has found that there will be a net exodus of nearly 20,000 high-income households (defined as households earning more than $200,000) in New York in 2020. That was more than any other state of study.
So where are these people moving to?
florida
No state attracts more high-income households than the Sunshine State.
Florida added 32,019 tax filers who reported income of at least $200,000 in 2020, according to SmartAsset. The state also lost 11,756 such filers that year, but the end result was a net gain of 20,263 high-income filers.
One ultra-high-income person who moved to Florida was billionaire activist and investor Carl Icahn. The 86-year-old was born in New York City and has had businesses in New York City for decades. He moved his office to Sunny Isles Beach, Florida in 2020.
An obvious advantage to moving to Florida, especially for those who live in the Snowbelt, is the weather. But the main reason Florida is the number one destination for high-income individuals may be for economic reasons. Florida is one of the few states in the country that does not charge state income tax to its residents.
texas
Texas is another temperate state with no state income tax. So it’s no surprise that high-income households are flocking to it.
In 2020, 18,417 tax filers who earned at least $200,000 moved to Texas and 13,061 high-income filers left Texas. Simple math shows that Lone Star State’s high-income households have increased by 5,356 from her.
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Aside from having no state income tax, Texas attracts newcomers due to its affordable cost of living. According to his Zillow on the real estate market, a typical home price in Texas is $315,831, lower than the national average of $357,589. Meanwhile, New York City’s typical home price is $782,640.
At the same time, Texas boasts a booming economy and many job opportunities. The state will lead the nation in annual job growth from October 2021 to October 2022 at 5.4%, according to the Texas Workforce Commission.
Arizona
Arizona is the third most popular destination for high-income immigrants, with 5,268 more taxpayers earning $200,000 or more in 2020.
Arizona has a state income tax, but is moving toward a flat tax rate of 2.5% for tax year 2023. The state’s flat tax rate will be the lowest in the nation when the new tax rate is implemented.
“It’s time to provide lasting tax breaks to help Arizona families and small businesses keep more of their hard-earned money,” says Gov. Doug Ducey. “This tax cut will help keep Arizona competitive and maintain its reputation for attracting jobs and creating opportunity.”
One last thing: Florida is known as the Sunshine State, but Arizona actually gets the most sun. Average annual sunshine is 5,755 kJ per square meter, the most of any state in the country.
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This article is for informational purposes only and should not be construed as advice. It is provided without warranty of any kind.