New York's High Taxpayers Are Fleeing—And It's Not Just the Income Tax
New York City’s skyline, once a beacon for the wealthy chasing big dreams and bigger deals, is losing its shine. While income taxes grab headlines, it’s really the estate tax that’s truly driving the ultra-wealthy out. The city levies estate taxes starting at just $7.16 million—far below the federal threshold of $13.6 million—with a top rate of 16%. Worse, once your estate crosses about $8 million, the exemption vanishes entirely, meaning you’re taxed from dollar one.
Consider this: On a $100 million estate, heirs could face roughly $35 million in federal taxes—and another $16 million from New York. That’s a $53 million bill simply for dying in the Empire State. Move to Florida, and that tax burden drops to $35 million. Why pay more just to stay?
Last year alone, tens of thousands of high earners left, taking $14 billion in income with them to low- or no-tax states like Florida and Texas. With Zohran Mamdani dominating the 2025 mayoral race—polls show him trouncing Andrew Cuomo with an 84% chance of winning after Eric Adams dropped out—the city’s wealthiest residents are running for the exit. Mamdani’s platform—rent freezes, free public transit, and a $30 minimum wage—signals a sharp left turn in city policy and an even heavier government hand. For those who fuel the city’s economy, the message is clear: it’s time to go. Most observers point to Mamdani’s proposed 2% “millionaire tax” on incomes over $1 million as the tipping point. But that’s not the full story. The real driver behind the exodus is New York’s punishing estate tax.
The fix is simple: scrap the estate tax and lighten New York’s regulatory grip. Let families keep and pass on what they’ve built without the state taking a final, massive cut. The city’s income tax burden is already punishing enough—its estate tax burden is unbearable.