New York’s socialist movement is learning a hard economic lesson: you can only squeeze taxpayers so long before they pack their bags and leave.
The latest numbers show that the wealthy are doing exactly that, and the consequences are hitting the state’s socialist dreamers right in the tax base.
A new report from the Citizens Budget Committee revealed an alarming shift. In 2010, New York was home to 12.7 percent of America’s millionaires.
Today, that share has plunged to just 8.7 percent.
That is not a rounding error; that is a collapse.
And while the socialists cheer for “equity,” the real result is emptier coffers and shrinking opportunity.
Even more worrying for those still trying to fund lavish state programs, the report shows that high earners are leaving the state much faster than low earners.
The people who shoulder the largest portion of the taxes, and therefore fund government services, are packing up for friendlier territory.
That reality puts the Democratic Socialists of America and politicians like New York City Mayor Zohran Mamdani in quite the political bind.
On one hand, they have built their campaigns on vilifying successful people.
On the other, they desperately need the money those same people generate through taxes to pay for social programs and handouts.
Mamdani has openly pushed for a two percent hike in taxes on millionaires.
The New York City DSA chapter has also proposed raising taxes on anyone making over $300,000 a year, as well as on capital gains and inheritances.
To them, “tax the rich” is a slogan and a strategy rolled into one.
Unfortunately for them, math is not on their side.
New York already ranks near the top nationwide in taxes collected as a share of income.
That should be no surprise.
The state’s wealthy residents face the highest combined federal, state, and city tax burden anywhere in the country.
If the DSA’s strategy were working, then New York should be swimming in cash.
Instead, it is bleeding revenue.
WATCH:
Economists Joshua Rauh and Ryan Shyu have shown that even in progressive strongholds like California, raising taxes on high earners triggers a flight of wealth.
In one year after California’s income tax hike, almost one percent of top earners left, taking their incomes with them.
That meant lost taxable income, lost sales, and ultimately lost revenue despite all the rhetoric about “fairness.”
Another study by Enrico Moretti and Daniel Wilson found that top scientific talent follows much the same pattern.
A one percent increase in after-tax income draws about two percent more star scientists into a state, while a tax increase has the opposite effect.
Talent, like capital, goes where it is treated best.
The numbers in New York are already stark.
Between 2019 and 2023, the state lost more than $7 billion of annual taxpayer income to Fairfield County, Connecticut.
Another $7 billion migrated south to Palm Beach County, Florida. That is not ideological speculation.
Those are IRS migration data points showing what millions of New Yorkers already know: the wealthy are escaping the socialist squeeze.
Some progressives even admit it and cheer. Seattle’s socialist mayor, Katie Wilson, mocked concerns over rich residents leaving after her city imposed higher taxes.
“The ones that leave? Like, bye,” she said flippantly, as if watching prosperity walk out the door is some sort of political victory.
There is a cynical logic to that view. By chasing away wealthier residents, leftist politicians secure their voter base.
Economists call this pattern “the Curley effect,” named after Boston Mayor James Michael Curley, who intentionally drove out the well-off to lock in electoral power among poorer voters who depended on him.
In the short term, that kind of politics can work. In the long term, it kills the city.
The history is clear. Once you lose your tax base, the lights dim fast.
Fewer wealthy taxpayers means smaller budgets, fewer services, and higher costs for everyone left behind.
But the socialists at city hall appear uninterested in economic reality. Their vision is one where ideology trumps practicality and taxes can always be raised just one more time.
A century ago, Joseph Stalin promised the Soviet people “socialism in one country.”
New York’s left-wing leaders seem to have borrowed that line, but today they are trying to build socialism in one city.
The problem is simple but fatal for their vision.
The very people they expect to fund their utopia have the freedom to go somewhere else, and they are exercising that freedom faster than ever.
Judge Glock, senior fellow at the Manhattan Institute, summed it up best by pointing out that the mobility of Americans will always make socialist dreams financially impossible in a free society.
The rich are mobile, the states compete for talent, and the winners tend to be the ones that understand that success should be rewarded, not punished.
Until New York’s socialists learn that basic truth, they will keep running in circles.
Their tax base will keep shrinking while they complain about “inequality.”
And before long, their dream of a socialist paradise will look like every other failed experiment in redistribution, only with higher rent and colder winters.
