Zohran Mamdani’s major victory in the mayoral race in New York City and the proposal to raise billionaires’ taxes impressed the fear of a new wealth flight from the city. But so far, there is little evidence of slowing down the loss of high-end New York real estate or true wealth.
A Florida real estate broker says he saw a surge in inquiries from wealthy New York people looking to move to Miami or Palm Beach. Business owners are threatening to leave the city or close it. And, caught up in the crosshairs of Mamdani’s rent management platform, New York developers united to fund Mamdani’s opponents in the November general election.
At the heart of economic concern is the so-called “billionaire tax” of Mamdani. He proposes an additional 2% tax for New Yorkers who make more than $1 million a year. The tax, which was added to the city’s current top tax rate of 3.876%, brings the New York City and state taxes to a total of 16.776%, much higher domestically. The total federal, state and city rate is 53.776%.
And high-income New Yorkers don’t need to go to Florida to avoid taxes. They can simply move to nearby Long Island, Westchester County, or New Jersey. Unlike New York, New York City cannot tax people who work in the city, but elsewhere there are major housing.
“New York City can only tax its own residents,” said Jared Walczak, vice president of state projects at the Tax Foundation. “High-income earners don’t need to abandon the convenience of the city. They just move outside the five wards. Traveling across the city line is the easiest.”
Zohran Mamdani gestures as he speaks to the Primary Election Surveillance Party, including a bid to become the Democratic candidate for New York City in the November 2025 election in New York City, USA.
David Delgado | Reuters
Importantly, mum ticks will not be able to raise income taxes. The city’s income tax rate is set by Albany. There, Gov. Kathy Hochul said he would stop the tax hike. “I don’t want to lose any more people to Palm Beach,” Hochul told The New York Post.
Critics also fear that Mamdani’s policies on police and public safety could put cities even more dangerous and will become the ultimate straw for many business owners and top earners who are already considering leaving. The top 1% of New Yorkers pay more than 40% of their income tax. So even a few high-income earners lose, leads to a downward spiral of low revenue, low services and increased migration.
New York had a net loss of $14 billion in net adjusted income, as taxpayers left between 2021 and 2022, according to tax law and IRS data. According to data from the city’s strengths, revenue from personal income taxes fell from $16.7 billion in 2022 to $14.7 billion last year between 2022 and 2024, exceeding $13.4 billion in 2019.
But at the same time, there are indications that New York’s powerful wealth machines are constantly replenishing the billionaires and billionaires ranks more than they can make up for the rich moving. According to Altrata, the number of billionaires in New York City has more than doubled over the past decade, exceeding 2.4 million. According to Altrata, more than 33,000 New Yorkers, more than $30 million, are almost doubled for $30 million. New York City maintains its domination as the world’s richest hub of wealth, whether it measures billionaires, hundreds of millions of billionaires or billionaires.
“New York is a powerful magnet for the wealthy, offering a blend of luxurious consumption, vibrant culture, high quality education and lifestyle caches, and Manhattan’s borough is the epicenter of Ultra Prime Real Estate.”
Demand for expensive luxury apartments in New York shows no signs of slowing down, even after Mamdani’s victory at the primary on June 24th. According to Olshan Realty, 64 contracts were signed, with prices of apartments, which exceeded $4 million, increased by 13% between June 23 and July 13th, with more than $5555 million in sales. Among the signed deals was a $35 million three-bedroom apartment on Fifth Avenue, which was originally listed in December.
“The luxury market is on the pace in one of the best years,” says Dona Orshan of Orshan Realty.
Not only did New York’s billionaires and billionaires population recover quickly after Covid, but also high-income people bouncing off. According to the Institute for Fiscal Policy, the city lost 5,000 net households that made more than $1 million and made more than $1 million during the pandemic, but grew from 30,400 in 2019 to 34,127.
Nathan Gusdorf, executive director of the Institute for Fiscal Policy, said the story of the Wells Flight story from New York is partly supplied by the media. Stories about billionaires like Josh Harris, Carl Icahn and Daniel Ock, whose break-up to Florida ignores New York’s wider decline and wealth flow. New York’s strong economy, backed by the financial services industry, continues to produce more new billionaires than they have lost.
“We don’t have a fixed billionaire population that decreases with each one of them leaving,” Gusdorf said. “Cities revive the loss of a billionaire population.”
Even if Mamdani won the mayor in November and ends up raising taxes, the direct impact on wealth flight may be more limited than many would expect. According to the latest research from the Center for Fiscal Policy, the top 1% of New Yorkers by income (people who earn more than $800,000 a year) leaves a quarter of all other income groups. When the wealthy people in New York move, they have mostly listened to other high-tax states like New Jersey, Connecticut and California.
“High tax rates at the state level, levied on top earners, strongly suggest that they have no real behavioural effect,” Gusdorf said.
But others say that taxes are extremely important to the wealthy, and have been demonstrated in recent years by widespread population movements, ranging from high taxes to low or tax-free conditions like Florida and Texas.
A survey by the California Employment Center and the Economics described a net loss of “taxodas” or personal income tax of $5.3 billion from high-income earners who left after the 2016 rich tax extension.
“High tax rates lead to participation and income growth,” Walczak said.
