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Wealthier New Yorkers Aren’t Fleeing the City for Tax Havens

A new analysis being released undermine the frequent assertion that wealthy people automatically leave New York City because of the high income taxes, despite the recent increase in celebrities leaving certain states and countries for this reason. Mayor de Blasio campaigned to raise taxes on those who make more than $500,000.
The study, conducted by the city’s Independent Budget Office, found that the share of higher-income households that moved from the city in 2012, 1.8%, equaled the share of lower-income households that left. Moreover, the budget office determined that 42 percent of households that made more than $500,000 and left the city in 2012 moved elsewhere in New York State. Another 22 percent departed for New Jersey. The third favorite destination among the wealthy, with 12 percent, was Connecticut, where the Tax Foundation, a nonpartisan research group, estimated that taxpayers typically did not earn enough until May 9, the latest of any state, to pay their total tax bill.
In fourth place was California, where 9% of the wealthy households went.
In summary, 86% of households making over $500,000 moved from NYC to four states with reputations for higher taxes. Only 45% of the less wealthy households relocated to those states.
States known for lower taxes, among them, South Dakota, Delaware, New Mexico, Utah, Tennessee, Louisiana, Colorado, Alabama and Wyoming, did not even register on the study’s list of destinations for wealthier New York City movers.
“The implication is pretty clear that at least based on 2012, and it’s not much different for 2008, high-end New Yorkers are not making their relocation decisions simply looking for tax havens,” said Doug Turetsky, the budget office’s chief of staff.