By John Q. Hosedrinker 
Zohran Mamdani’s plan to fund affordable living in New York through a modest tax on millionaires has sparked predictable threats of tax flight. However, historical data reveals this threat is largely unfounded, as high-tax states often have the highest concentrations of millionaires. Despite fears of an exodus, increases in millionaire taxes have historically been followed by growth in the millionaire population. Millionaires are less likely to move than the general population, and the quality of life factors often outweigh tax considerations when choosing a place to live.
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Taxing the rich in New York City is a concept that sparks heated debate, often framed around the fear that it will drive the wealthy away. The fundamental premise, however, is that the rich, particularly millionaires, are unlikely to abandon the city, even with increased tax burdens. This isn’t just a gut feeling; history and economic realities strongly suggest that the allure of New York, its opportunities, and its lifestyle outweigh the financial drawbacks of slightly higher taxes. The argument that millionaires will simply pack up and leave is more of a threat than a realistic prediction.
The question then becomes: where would they go? Sure, some might consider Florida, or other states with lower tax rates. But where’s the global financial hub? Where’s the cultural epicenter, the networking opportunities, and the prestige? Leaving New York would mean leaving behind a world-class city, the biggest market in the country, and a source of endless opportunities. It’s not simply about money; it’s about the entire package that New York City offers. Those benefits are far more valuable than any tax savings that would be found elsewhere.
The claim that the rich would leave has always been a convenient threat, a rhetorical device to discourage tax increases. Those who are wealthy often enjoy a standard of living and set of circumstances that aren’t easily replicated elsewhere. They are already in a position of privilege, and the idea that they would suddenly sacrifice that privilege is questionable. Wealthy people are often already living in a system that favors them; the small increase in taxes would hardly be something they would be motivated to change the entire scope of their lives for. The very benefits of being rich include the ability to weather such changes without major disruption.
Furthermore, it’s important to note that the wealthy, the real high-net-worth individuals, often won’t even notice a tax increase. A few percentage points may be negligible to those with extensive resources. We can look to states like Massachusetts, which implemented a millionaires tax and actually saw revenue exceed expectations. The wealthy still have the financial means to thrive in the locations where they have already entrenched their assets, like the big cities, and especially New York. The very premise behind their flight is based on a false equivalency that those with vast wealth are incapable of handling reasonable tax burdens.
The argument that higher taxes will destroy the incentive to work and invest is equally unconvincing. The idea that a millionaire, or even a billionaire, will suddenly stop working because they’ll “only” make tens of millions instead of hundreds is absurd. The scope of their operations and their assets cannot simply be shut down. The tax increase could very well be the cost of doing business in a place that they already deem the best.
Moreover, even if some wealthy individuals do decide to leave, it’s not necessarily a negative outcome. If they are not paying their fair share, and if their presence is contributing to the high cost of living, then their departure might even be beneficial. It would create opportunities for smaller businesses and contribute to a more affordable, equitable, and inclusive city. The impact could be positive and it could provide a foundation for the next generation.
Of course, the rich aren’t the only ones who are impacted by cost of living. But the middle and working classes are far more vulnerable. As long as there is a net benefit to the wealthy in living in the city, they will stay there.
The true issue is the city’s outdated and complex tax system. The fundamental issue isn’t “tax the rich,” but rather fixing the system itself to be less complicated. With such a system, there could be more flexibility and a more level playing field.
Finally, it is important to realize that the wealthy need New York more than New York needs them. This is a city that has survived and thrived through countless challenges. A slight tax increase isn’t likely to change that. It’s more likely that they will stay, pay their taxes, and continue to enjoy the benefits of living in one of the world’s greatest cities.