Commentary, Policy Demands

New York’s “Tax the Rich” Experiment Is Working…

Posted on by Bill McCarthy

… At Chasing Away the Golden Goose

New York decided to punish success. High taxes, burdensome regulations, and endless attacks on productive people were supposed to fund bigger government and make things “fair.” Instead, the wealthy are voting with their feet. The results are exactly what anyone with common sense predicted: a shrinking tax base, slower growth, and pain for everyone left behind.

The state’s top earners have been leaving in droves. New York’s share of the nation’s millionaires has plummeted over the past decade. Had the state held onto its previous share, personal income tax collections would have been roughly $11 billion higher in a single recent year. That is real money gone—money that could have funded services or, better yet, never been needed in the first place if the state hadn’t driven producers away.

The Numbers Don’t Lie

High-income taxpayers are fleeing to lower-tax states like Florida and Texas. Net domestic outmigration continues, with more people leaving than arriving. The top 1% already shoulder about 45% of state income taxes, so every millionaire who packs up creates a hole that the remaining residents have to fill. Recent data shows continued losses among high earners, with married couples in the $100,000–$500,000 range and those above $500,000 departing at noticeable rates.

This is not abstract. New York has the highest state and local taxes per capita in the country—far above the national average. Combined with the highest or near-highest top marginal income tax rates (especially in New York City), it creates a powerful incentive to leave. Regulations pile on, raising the cost of doing business and living. The result is predictable: capital and talent flow to friendlier places.

What “Tax the Rich” Really Delivers

The state relies heavily on a small number of high earners. When they go, revenue volatility increases, budgets strain, and politicians face tough choices. Recent analyses show structural pressures mounting. One-time fixes and accounting maneuvers cannot hide the long-term damage. Spending remains high while the productive base shrinks. This cycle leads to calls for even higher taxes on those who stay—exactly the wrong response.

Businesses follow people. Fewer wealthy residents and entrepreneurs mean fewer jobs, less investment, and slower economic growth. Family businesses, real estate, and industries that serve high earners take hits. The middle class ends up paying more through higher effective burdens or reduced services. Public finances suffer from lost income, property, and sales taxes. Infrastructure and programs face shortfalls that “tax the rich” policies were supposed to solve.

Recent moves like the pied-à-terre tax on luxury second homes (effective July 1, 2026) and pushes for more surcharges signal the same failed approach. These measures target visible wealth but accelerate the exodus. Low-tax states continue gaining population and revenue while high-tax ones like New York bleed residents and economic activity.

The Human and Economic Cost

New York’s population trends show domestic losses partially offset by international immigration, but the quality of the tax base matters. Losing high earners while gaining lower-income residents shifts the burden downward. An aging population and regional declines (North Country, Southern Tier) compound the problem. The state’s per capita government spending ranks among the highest, yet outcomes—schools, infrastructure, safety—do not always match the price tag.

This is the predictable outcome of attacking productivity. Success is mobile. People with options choose places that reward work and investment. New York’s policies send the opposite signal: we will take more of what you earn, regulate what you build, and blame you for wanting to keep it. The rich are not the enemy. They are the engine. Drive them out and everyone rides a slower, more expensive train.

Other states prove the alternative works. Low-tax environments attract residents, businesses, and revenue. Growth follows opportunity. New York could reverse course with lower rates, fewer regulations, and a focus on making the state competitive again. Instead, it doubles down on envy-driven policy that has already cost billions and will cost more.

The lesson is clear for the rest of America. Punishing success does not create prosperity. It destroys the golden goose and leaves ordinary people with the bill. New York is living proof. The state suffers real, measurable damage—lost revenue, lost jobs, lost momentum. Fixing it requires abandoning the “tax the rich” fantasy and embracing what actually builds wealth: freedom, low burdens, and respect for achievement. Until then, the exodus continues and the hole grows deeper.

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