New York Governor Kathy Hochul was recently confronted about a study detailing a significant outflow of high-earning individuals from New York City between 2010 and 2022. The report from the Citizens Budget Commission (CBC) indicated that the city's share of U.S. millionaires dropped from 12.7% to 8.7% during that period, leading to concerns about the city's financial stability.
During an appearance on "Good Day New York," host Rosanna Scotto questioned Hochul about the findings, noting that while wealthy individuals and families are leaving, those who may not be able to afford the city are arriving. Scotto also raised concerns about a reported $10 billion budget deficit and an $8 billion bailout for New York City in the current budget.
Hochul attributed the trend to several factors, including the 2017 elimination of the State and Local Tax (SALT) deduction by the Trump administration, which she argued led to double taxation for New Yorkers. She also cited the COVID-19 pandemic as a catalyst, prompting some residents to relocate to secondary homes, such as in Palm Beach, and remain there due to perceived issues in the city.
The CBC analysis estimates that if New York had maintained its share of millionaires over the past decade, personal income tax collections would have been approximately $10.7 billion higher in tax year 2022. Hochul stated that her administration is working to prevent the departure of wealthy residents and businesses, emphasizing a strategy of not raising taxes on high-net-worth individuals or job-creating companies.
"I want to expand the pie," Hochul said, indicating a preference for economic growth over increased taxation. She also addressed concerns about the luxury housing market, specifically mentioning a potential pied-à-terre tax. Hochul clarified that such a tax would target individuals, like foreign oligarchs or wealthy individuals, purchasing high-value second homes in New York City valued at $5 million or more. She distinguished this from those who might own a smaller apartment for occasional visits.
"If you want to be a New Yorker, make this your primary home — you don't have to pay the tax. But as long as you're someone from the outside, you're going to contribute more to the services that you use," Hochul explained regarding the proposed tax.