It was an anti-tax, fearmongering story so predictable that we could have written it ourselves. If only it weren’t so ridiculous.
On July 1, New York State Assemblymember Zohran Mamdani (District 36) was confirmed as the winner of New York City’s Democratic mayoral primary. A self-avowed democratic socialist, Zohran centered his historic campaign around economic justice and lowering the cost of living for working people in the Big Apple.
Affordability in New York City has long been an issue for city residents, but in recent decades, it’s become impossible for working people to get by. As part of his mayoral platform, Zohran proposed a host of populist policy reforms, including a citywide rent freeze, fare-free buses, city-owned grocery stores, and a $30 minimum wage by 2030. But it’s his proposal for financing these programs—namely, the introduction of a 2% income surtax on New Yorkers earning over $1 million—which seems to have generated special attention from lawmakers across the political spectrum and the city’s business leaders.
For as long as we can remember, every time a candidate or elected official floats some idea that involves raising taxes on the rich at the federal, state, or local level, anti-tax naysayers threaten that the rich will leave and move to lower tax jurisdictions. In doing so, they create the fear that without millionaires’ tax revenue, there will be fiscal havoc. They further argue that this “millionaire tax flight” is already underway, with the wealthy leaving excessive tax locales in droves.
With a few weeks of hindsight, Zohran’s pledges proved to be no exception to this kind of reaction. On the campaign trail, his main opponent, former New York Governor Andrew Cuomo, said, “You elect a socialist who…doubles the taxes on the wealthy, and the wealthy say, ‘That’s it I’m gone.’” New York Governor Kathy Hochul was just as leery about the proposal, saying, “I don’t want to lose any more people to Palm Beach.” Business leaders chimed in to the anti-surtax chorus with warnings of an exodus by top taxpayers and companies.
With the New York City general election still months away, only time will tell if Zohran gets the chance to enact his millionaire surtax proposal. But we do know this: if he does get that chance and follows through with his idea, millionaires like us will not leave New York City in droves. In fact, none of us plan to leave our respective homes and cities if our elected leaders plan to raise our taxes. And the idea that the wealthy will leave en masse if their taxes go up? Well, it’s completely overexaggerated. And we have historical evidence and academic research to back this up.
For this week’s Closer Look, we want to explore why the whole notion of “millionaire tax flight” is largely a myth. We’ll share studies focused on migration between US states, and also spotlight a new study from our friends at Patriotic Millionaires UK that touches on migration between countries. We’ll then make the case as to why most millionaires share our desire to be taxed more, and close by offering some thoughts on the importance of tailoring policy decisions to the needs and interests of working people—not rich people.
Migration between US states
Cornell University Professor Cristobal Young is one of the foremost thought leaders on this idea of millionaire tax flight. In his 2017 book, The Myth of Millionaire Tax Flight: How Place Still Matters for the Rich, Young analyzed thirteen years’ worth of tax returns from US millionaires to understand where they live and where they are moving to. His findings? Just 2.4% of millionaires move to a different state every year, compared to 2.9% for the general population and 4.5% for the poorest Americans. He also found that just 0.3% of millionaires moved to lower-tax states in a given year, which certainly defies the idea that millionaires are leaving high-tax states in droves.
In his book, Young also offers data that points to an answer as to why millionaires are more rooted to their home bases. While they are more likely to be married and have children, which ties most families to certain places, their financial success is also more intimately embedded within their communities. They tend to have both social and business connections, which impacts their bottom lines. Meanwhile, it’s a very different story for early career professionals and low-income earners struggling to make a decent living who, unsurprisingly, tend to be more mobile.
More recent research supports Young’s findings. In December 2023, the Fiscal Policy Institute published a report that revealed that the top 1% of residents in New York—the state with the highest tax burden in the country—move out of the state at a lower rate than all other income groups; that millionaires tend to move to other high-tax states when they do move; that the millionaire population in New York is growing; and that their population growth continued after tax hikes in 2017 and 2021. In June 2024, they released a follow-up report showing that families with young children in search of affordable childcare and people in search of more affordable housing are the ones driving New York’s overall population decline.
In April, the Institute for Policy Studies released a report which corroborated the Fiscal Policy Institute’s findings. Specifically, they looked at the number of millionaires and their cumulative wealth in Massachusetts and Washington state after they instituted a 4% surtax on incomes over $1 million and a 7% tax on capital gains above $250,000, respectively, in 2022. Their analysis found that both states experienced an increase in their millionaire populations and their collective wealth since their respective tax hikes.
Migration between countries
Last month our sister organization, Patriotic Millionaires UK , along with the Tax Justice Network and Tax Justice UK, published a groundbreaking new report that dispelled the notion that millionaires were leaving countries in “exodus,” with special attention to the UK.
In the spring, the UK closed its “non-dom” tax loophole. This loophole allowed wealthy foreigners to live in the UK without paying tax on their overseas income, which effectively allowed them to enjoy all the benefits of services and infrastructure in the UK without contributing what they should to help pay for society. Closing the loophole was certainly a welcome reform, but it wasn’t as strong as it could have been. Earlier this year, the UK’s Finance Minister, Rachel Reeves, announced that the Labour government would consider its reforms to this non-dom tax regime after an investment migration firm, Henley & Partners, published a report in 2024 that warned of a millionaire exodus from the UK.
Patriotic Millionaires UK raised serious questions about Henley & Partners’ methodology, and through their own research uncovered that the number of millionaires the firm claimed were leaving countries around the world in 2024 actually represented roughly 0% of those countries’ millionaire populations. For the UK specifically, Henley & Partners claimed that 10,800 millionaires would leave the country in 2024—a projection which would mean only 0.3% of the UK’s 3.06 million millionaires. That claim doesn’t exactly say “exodus” to us.
Why we want to live in high-tax places
We have hundreds of members across our three branches in the US, UK, and Canada. We all come from different backgrounds and made our money in different ways, but we share a common desire to be taxed more.
Polling that we’ve conducted over the years among our wealthy peers supports our claims and indicates that we aren’t alone in our desire to have our taxes raised. For example, in June 2024, we conducted a poll among 800 American millionaires and found that the majority of them supported various initiatives to tax the rich. We also conducted surveys of millionaires in G20 countries and found similar results.
There are many reasons why we want our taxes raised and to live in high-tax places. One of them has to do with the fact that high-tax places tend to provide a higher quality of life that we desire. It’s not an accident that US states with higher tax burdens perform better on a variety of metrics compared to their low-tax counterparts: they have lower crime and incarceration rates, better public schools, better educational outcomes, cleaner environments, and more. In the same vein, it also doesn’t surprise us that high-tax Scandinavian countries like Finland, Denmark, and Iceland consistently rank among the world’s happiest and healthiest.
In 2023, one of our members, David Nixon, wrote an opinion piece for Fortune in which he cited this as a factor in his decision to move from Florida, a low-tax state, to California, a high-tax one. David said, “While I might be paying a bit more in taxes in California, I like to think that what I’m getting in return for it–cleaner air and water, better schools, better parks, better hospitals–is more than worth it.” If you’re interested, you can read the whole piece here.
Conclusion
Of course, we know that even with all this evidence and research on our side, it’s inevitable that you will come across a high-profile millionaire or billionaire who will make a big song and dance about moving for lower taxes. Donald Trump did it back in 2019 when he officially moved his permanent residence from Manhattan to Palm Beach, Florida. Earlier this week, one UK billionaire, shipping magnate John Fredriksen, boasted that he was selling his $337 million London mansion because of his anger over the abolishment of the non-dom tax perk.
We’re not suggesting that there are no millionaires or billionaires out there who consider taxes in their decisions over where to live. What we are suggesting, however, is that the evidence that we have available informs us that millionaires as a whole are not leaving high-tax places in anything near an “exodus” nor will they leave in droves after new taxes are introduced.
Over the years, we’ve observed interesting migration trends between the states within the US. Fewer Americans moved in 2024, but when they did, they moved to low-tax states like Florida and Texas. This has also been found to be the case for people making over $200,000. Even accounting for this trend though, the data still shows that millionaires are still predominantly living in high-tax places and aren’t likely to leave in droves any time soon. High-tax states like California and New York still have the most millionaires living in their borders, and other high-tax states like New Jersey, Maryland, and Connecticut still have the highest proportions of millionaires in their populations.
But even if we’re wrong and millionaires suddenly decide to actually follow through with their threats and move to low-tax locales, that should give us more resolve to reform taxes at the federal, state, and local levels—not less. No matter where millionaires and billionaires decide to live, governments should work together to ensure a minimum standard in what rich people pay in taxes.
Lawmakers have to stop designing policy to appease rich people. They’ve been “appeased” enough over the years. (Don’t believe us? Just look at their bank accounts.) We can’t let their grandstanding get in the way of enacting policy that is best for our country’s future.
One final thing. Here’s a little secret about rich people: most of us are so rich that we can live wherever we want and not have to worry about being able to pay taxes. We’re rich before Tax Day, and we’re still rich afterwards. Unfortunately, most working people can’t say the same. So if lawmakers want to try to appease anyone through their tax policy decisions, it’s about time it be them.