Zohran Mamdani’s main win in New York Metropolis’s mayoral race and proposal to boost taxes on millionaires have touched off fears of a brand new wave of wealth flight from the town. But to date, there may be little proof of a slowdown in high-end actual property or actual wealth losses in New York.
Florida actual property brokers say they’ve seen a surge in inquiries from the New York rich trying to transfer to Miami or Palm Seashore. Enterprise house owners are threatening to go away the town or shut. And New York builders, caught within the crosshairs of Mamdani’s hire management platform, have banded collectively to fund Mamdani’s opponents within the November basic election.
On the heart of the financial concern is Mamdani’s so-called “millionaire tax.” He is proposed an extra 2% tax on New Yorkers incomes greater than $1 million a yr. Added to the town’s present high fee of three.876%, the tax would convey the mixed New York Metropolis and state tax to 16.776%, by far the best within the nation. The mixed federal, state and metropolis fee can be 53.776%.
And New York’s excessive earners will not need to go to Florida to keep away from the tax. They’ll merely transfer to neighboring Lengthy Island or Westchester County and even New Jersey. In contrast to New York state, New York Metropolis cannot tax individuals who work within the metropolis however have their main residence elsewhere.
“New York Metropolis can solely tax its personal residents,” mentioned Jared Walczak, vice chairman of state tasks on the Tax Basis. “A excessive earner does not want to surrender the comfort of the town, they simply want to maneuver outdoors the 5 boroughs. Migration throughout metropolis strains is the simplest.”
Zohran Mamdani gestures as he speaks throughout a watch celebration for his main election, which incorporates his bid to turn out to be the Democratic candidate for New York Metropolis mayor within the upcoming November 2025 election, in New York Metropolis, U.S., June 25, 2025.
David Delgado | Reuters
Importantly, Mamdani would not have the ability to increase earnings taxes. Town’s earnings tax charges are set by Albany, the place Gov. Kathy Hochul has mentioned she is going to block any tax hike. “I do not wish to lose any extra individuals to Palm Seashore,” Hochul informed the New York Publish.
Critics additionally worry Mamdani’s insurance policies towards the police and public security may make the town much more harmful, changing into the ultimate straw for a lot of enterprise house owners and high earners who have been already contemplating leaving. The highest 1% of New Yorkers pay over 40% of the earnings taxes, so shedding even a small variety of excessive earners would set off a downward spiral of decrease income and decrease companies and extra out-migration.
New York state had a internet lack of $14 billion in internet adjusted earnings resulting from taxpayers leaving between 2021 and 2022, in response to the Tax Basis and IRS knowledge. Town’s income from private earnings taxes declined between 2022 and 2024, from $16.7 billion in 2022 to $14 billion final yr — though they’re nonetheless above the pre-Covid ranges of $13.4 billion in 2019, in response to knowledge from the New York Metropolis comptroller.
On the similar time, nonetheless, there are indicators that New York’s highly effective wealth machine is continually replenishing the ranks of millionaires and billionaires, greater than making up for the wealthy who transfer out. The variety of millionaires in New York Metropolis has greater than doubled over the previous decade — regardless of the Covid losses — to over 2.4 million, in response to Altrata. There at the moment are over 33,000 New Yorkers price $30 million or extra, practically double that of Miami, in response to Altrata. Whether or not it is measuring millionaires, multi-millionaires or billionaires, New York Metropolis has maintained its dominance because the richest wealth hub on the planet.
“New York stays a strong magnet for the rich, providing a mix of luxurious consumption, vibrant tradition, high-quality training and way of life cachet, with the borough of Manhattan the epicenter of ultra-prime actual property,” mentioned a report from Altrata and REALM.
Demand for expensive luxurious residences in New York additionally exhibits no indicators of slowing, even after Mamdani’s win within the June 24 main. There have been 64 contracts signed between June 23 and July 13 for residences priced over $4 million, up 13% over final yr, with a gross sales whole of extra greater than $555 million in gross sales, in response to Olshan Realty. Among the many signed contracts was a $35 million, three-bedroom unfold on Fifth Avenue that was first listed in December.
“The luxurious market is on tempo for considered one of its finest years,” mentioned Donna Olshan, of Olshan Realty, who additionally cautioned that any potential Mamdani-related weak point may present up within the Fall.
Not solely did New York’s millionaire and billionaire inhabitants rebound rapidly after Covid, however excessive earners additionally bounced again. Whereas the town misplaced a internet 5,000 households incomes $1 million or extra in the course of the pandemic, their ranks have grown from 30,400 in 2019 to 34,127 in 2022, the most recent interval accessible, in response to the Fiscal Coverage Institute.
Nathan Gusdorf, government director of the Fiscal Coverage Institute, mentioned the narrative of wealth flight from New York is fed partly by the media, which highlights a small variety of high-profile billionaires who transfer from New York to Florida. Tales about billionaires like Josh Harris, Carl Icahn and Daniel Och decamping to Florida ignores the broader ebb and circulate of wealth in New York. New York’s highly effective economic system, fueled by the monetary companies business, continues to provide extra new millionaires than it loses.
“We should not have a hard and fast inhabitants of millionaires that simply declines each time considered one of them leaves,” Gusdorf mentioned. “Town regenerates that misplaced millionaire inhabitants.”
Even when Mamdani have been to win the mayorship in November and lift taxes, the direct influence on wealth flight could also be extra restricted than many anticipate. In response to the Fiscal Coverage Heart’s newest analysis, the highest 1% of New Yorkers by earnings (these making greater than $800,000 a yr) go away the town at one quarter the speed of all different earnings teams. When the New York rich do transfer, they’ve most frequently oved to different high-tax states like New Jersey, Connecticut or California – suggesting way of life reasonably than taxes are the driving force.
“There’s a sturdy indication that increased tax charges on the state stage imposed on the highest earners aren’t having actual behavioral results,” Gusdorf mentioned.
Others, nonetheless, say taxes have outsized significance for the rich, confirmed by the sweeping inhabitants strikes lately from high-tax to low- or no-tax states like Florida and Texas.
A research by the California Heart for Jobs and the Financial system described a “taxodus,” or internet lack of $5.3 billion in private earnings tax, from excessive earners who left after a 2016 extension of upper taxes on the rich.
“Excessive tax charges do result in outmigration and decrease earnings development,” Walczak mentioned.
