Americans are some of the most mobile people on Earth: They move homes about three times more often than Europeans.
As a recent report shows, that mobility is a problem for New York’s rising socialist movement.
A new Citizens Budget Committee report found that New York’s share of millionaires, those earning more than a million dollars a year, declined more than any other state since 2010.
The state went from having 12.7% of all millionaires in the nation to 8.7%.
Worse yet, in the more recent years, the state’s highest earners have been leaving much faster than its lowest earners.
The flight of the millionaires leaves the rising Democratic Socialists of America movement, and Mayor Mamdani in particular, in a bind.
On one hand, DSA campaigns have centered around attacking the millionaires and billionaires whom they claim are squeezing working citizens.
On the other, the DSA needs those same people to pay exorbitant taxes to fund their social programs.
Mamdani in his campaign wanted to raise taxes on millionaires by 2%.
The New York City DSA’s chapter suggests the state should raise taxes on those making over $300,000 a year and on capital gains and inheritances as well.
Unfortunately, New York has little room to further squeeze the well-off: It already ranks second in the nation in terms of percent of income taken as taxes.
New York City’s tax rates on the wealthy are already the highest in the nation.
The DSA and its supporters claim that ever-higher taxes won’t force the well-off to move, but the evidence contradicts them.
Economists Joshua Rauh and Ryan Shyu found that a California income-tax hike drove almost 1% of top taxable incomes out of the state in a single year.
The loss of taxpayers and other changes among the well-off meant the state lost most of the cash it would otherwise have raised from the tax.
Another study, by Enrico Moretti and Daniel Wilson, looked at how state taxes affected the movement of top scientists, a group that’s not thought to be particularly mercenary or focused on cash.
They found a 1% increase in after-tax income in a state brought nearly 2% more star scientists into the state — while a tax increase drove them away.
Political calculation
New York’s high rates explain why the state lost more than $7 billion of annual taxpayer income just to Fairfield County in Connecticut over a five-year span, 2019 to 2023 — and more than $7 billion just to Palm Beach County in Florida.
Some on the left celebrate the flight of the well-off from their states and cities.
Socialist Mayor Katie Wilson of Seattle argued that claims that millionaires would leave her state after a tax hike were overblown — and as for “the ones that leave? Like, bye.”
There’s a political logic to why some might celebrate the flight of the well-off.
By driving more of their political enemies away, socialists can ensure their political dominance. Economists call this “the Curley effect,” based on former Boston Mayor James Michael Curley’s efforts to drive the well-off from the city and cement his political base.
Yet cities cannot survive forever if they keep shrinking the tax base that funds them.
A century ago, Soviet leader Joseph Stalin promised to build “socialism in one country.”
Many of New York’s socialists are promising to build socialism in one state — or even in one city.
The fact that the people they hope will fund that socialism can always move away means their plans are doomed to fail.
Judge Glock is the director of research and a senior fellow at the Manhattan Institute.
The post NYC’s socialist movement forcing millionaires to flee the state — leaving Mamdani, DSA in a bind appeared first on New York Post.
