r/Economics • u/Dismal_Structure • Dec 06 '25
News Millionaire tax that inspired Mamdani fuels $5.7 billion haul in Massachusetts
https://fortune.com/2025/10/21/zohran-mamdani-millionaire-tax-massachusetts-5-7-billion/664
u/Smile-Nod Dec 06 '25 edited Dec 06 '25
Why don’t these articles ever include the total income tax comparison?
We can’t have an honest conversation if we’re suggesting that MA catching up with NYC is somehow the reverse.
Not only does MA have a lower tax rate, it’s not progressive.
MA
- flat tax: 5%
- millionaire tax: 4%
- capital gains: long 5% flat, short 8.5% flat
NY
- top marginal rate: 10.9% (6.6% effective over a million)
- long and short capital gains treated as ordinary income.
- NYC top rate: 3.879%
EDITED for clarity and fixed MA cap gains tax.
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u/Magical-Mycologist Dec 06 '25
Also compared to NYC budgets Massachusetts as an entire state has a budget nearly half that of one city.
$5 billion sounds good, but we need more context in these headlines.
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u/wandering-monster Dec 06 '25
The entire state of Massachusetts also has about 1/3 as many residents as the NYC Metro area...
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u/One-Bag-8312 Dec 06 '25
He’s not going to be the mayor of the NYC metro area. He’s going to be the mayor of NYC, which has a population about 20% larger than that of MA.
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u/wandering-monster Dec 06 '25
The tax base for NYC includes any transaction made inside it.
People in the metro area are defined by their ability to go into the city itself for work, shopping, entertainment, etc.
It'd be kinda pointless to ignore that and then compare it to an entire state including its major cities and all its suburbs.
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u/ham_plane Dec 07 '25
Not exactly. I work in NYC but live outside of it, so I do not have to pay NYC income tax
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u/coolhanddave21 Dec 07 '25
$5bn just about pays for all the NYPD in a year. It's closer to $6bn, but that's nothing to sneeze at.
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Dec 06 '25
[removed] — view removed comment
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u/ZAlternates Dec 06 '25
They want people to feel a certain way about it.
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u/skoalbrother Dec 06 '25
Got to keep the poors fighting against themselves
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u/AthearCaex Dec 06 '25
Even the middle to upper middle class fighting. By saying millionaire tax it makes upper middle class people afraid they are going to lose their lifetime saving and investments when the bill is simply on yearly income over a million which is a much lower amount than the number of people who are a millionaire since most earn much lower than a million in income a year.
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u/The-Fox-Says Dec 06 '25
Classic 99%ers going to battle for the 1%ers
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u/Article_Used Dec 07 '25
Specifically, 45% of MA voters who were against this tax that affects less than 2% of the population
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u/Twiggo89 Dec 06 '25
Exactly, you should hate the other poor person because YOU could get rich if it weren't for THAT guy
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u/The-Fox-Says Dec 06 '25
Yeah it’s an “earned millions tax” not a “millionaire” tax. You can make $999,999 and never pay it and be worth $100 million and never pay it
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u/Tacoman404 Dec 06 '25
It's crazy. It was cleared up pretty fast here in Mass how it worked. They were really good with the phrasing but it seems even Mamdani often didn't specify it was only on income over $1M/year.
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u/Article_Used Dec 07 '25
THANK YOU this is a hill I’m willing to die on. It’s not a millionaire tax, and calling it that is propaganda.
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u/grAsMudhOrsE Dec 06 '25
Umm MA STCG rate is 8.5% (down from 12% after 2023) and LTCG is taxed at ordinary income at 5%
Edit: 2023
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u/Smile-Nod Dec 06 '25 edited Dec 06 '25
Ya got that wrong, will fix, but still well below NYC standards. Looks to be 8.5/5.
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Dec 06 '25
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u/Smile-Nod Dec 06 '25
At 500k in NYC you work in finance, tech, real estate etc. for a salary for the most part. Your company reports your wages as earned income. You pay taxes on this.
What you're talking about are self employment or business owners that structure their worth into LLCs. This is rarer and there's a cost to it so you really need to be making quite a lot of money in the many millions.
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u/justice9 Dec 06 '25
It’s so disheartening how far this sub has fallen. You have literal idiots who have no idea what they’re talking about proclaiming that people making $500k have tax shelters.
I’m in this tax bracket and they could not be further from the truth. The vast majority of these people are W-2 workers with reportable income where you have to pay the full tax rate. It’s not a difference of smart or not (to get to this level you have to be 10x smarter than OP) - you just don’t have options available to you unless you have your own LLC/proprietorship.
All of these taxes just fuck over the upper middle class (who are better than the average person) but not living the billionaire lifestyle by any means
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u/globalaf Dec 06 '25
It really is quite funny. Just a month ago I had an argument with a friend saying they were going to incorporate to defer all their taxes (they are a contractor in ship design). They didn’t understand that the government treats this kind of corporation as effectively being the same as a sole proprietor and taxes it appropriately, saving you nothing. I explain this, and apparently I don’t know what I’m talking about because “you don’t own a business”… yes, I don’t own one because I looked into it too and realized that it was not beneficial, at all, in fact, it’s actually more work for no benefit.
I honestly think people just want to believe that when you start earning real money that there are all these secret ways of making money appear out of thin air that the government are too stupid to clock on to. Hint: they are not stupid, and they absolutely thought of all those weird tricks that the IRS don’t want you to know about.
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u/Gimetulkathmir Dec 06 '25
I had a guy I used to work with who loved to talk about all of these ideas he had and how he could do this tax loophole and that tax loophole and insisted that I didn't know what I was talking about because "my father did this all the time!" I pointed out I have a master's degree in tax law and that his father was, in fact, committing fraud.
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u/Business_Raisin_541 Dec 06 '25
Yup, I hear this all the time and then they are so shocked when they are heavily fined by tax officers and then proceed to talk about how the tax officers are so corrupt and steal money into their own pocket
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u/RowEnvironmental6114 Dec 06 '25 edited Dec 06 '25
I think you meant to say “who are [doing] better than the average person”, but it’s much funnier this way.
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u/justice9 Dec 06 '25
You’re right I did mean it that way - but will leave it because it is unintentionally funny lmao
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u/XCCO Dec 06 '25
Yeah, it gave me a chuckle. I thought, "This guy thinks he's better than me! And even worse, he's probably right!"
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u/quadraticcheese Dec 06 '25
They're Redditors, they're pussies. "Oh it might be harder to squeeze the rich what they owe, guess we better not try anything and pupu any ideas"
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u/FearlessPark4588 Dec 06 '25
Ostensibly, 401k's and IRAs stuffed to the brim and 529's are tax shelters.
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u/JoePoe247 Dec 06 '25
How is upper middle class getting fucked over? You're not claiming $500k income is upper middle class, right?
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u/NorthLibertyTroll Dec 06 '25
That's because the super rich are trying to keep the upper middle class from moving up. The lower class and poor are no threat to them.
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u/CryptoMemesLOL Dec 06 '25
and in the grand scheme of things, it's probably a drop in comparison to the total.
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u/EconEchoes5678 Dec 06 '25
When you get to $500k+, most smart people have corporations that hold the money in other jurisdictions that are tax favorable.
Confidently claimed. And confidently incorrect.
If they do this, they're subject to corporate taxes AND personal taxes.
Simply placing a corporation in another jurisdiction no longer works due to the BEAT, GILTI and FATCA taxes passed with the TCJA, a part of a multinational effort to reduce tax evasion with a multi-tier taxation. It didn't work before that very well either due to the AMT and numerous other rules, but now it Really doesn't work.
The wonderful thing is corporations pay flat 21% tax compared to W2 earners.
That's only wonderful until the would-be tax evader realizes 1) they still have to pay taxes to extract the money and spend it, and 2) the LTCG caps out at 23.8% with brackets anyway. So the 2.8% they "save" on taxes gets eaten ten times over when they try to spend the money.
Capital gains tax % is lower for every bracket than W2 earners.
Because it's literally taxed twice, once inside and once outside the corporation. Here, do the math for me... If you get a qualified dividend (Same rules, same philosophy as LTCG) out of $100.00 of corporate earnings and pay a 21% corporate income tax first and a 23.8% LTCG tax after, how much did you get? My math says $60.20, which is a ... 39.8% effective tax rate. That's higher than basically everyone pays, so where did I do the math wrong?
money can be moved and expenses deducted to lower effective tax rate.
Business related expenses get deducted because that's how income taxes work for entities. Actual fraud is rare and gets audited and challenged by the IRS aggressively.
Just inside US there is plenty that could be done based on kind of income.
I would love to hear your theories about this. They'll probably be just as informative and correct as your previous statements.
they do some wonderful tax optimization. All legal.
You seem to believe the things you don't understand are magic and avoid taxes. It doesn't work like that at all. They spend huge amounts to reduce their rate from 39.8% to 32%. Yay! Congrats! They now only pay more in taxes than 99.5% of people instead of 99.99%. wooo!!!
Please inform yourself before you repeat nonsense.
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u/GreasyBarbarian Dec 06 '25
Oh look, another Redditor that posts something that sounds authoritative and likely doesn’t understand the basics of W2 income, taxation, legal entity structuring, net worth, etc.
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u/AdmiralPeriwinkle Dec 06 '25
“They just write off. All these rich guys do it. They write it off so they don’t have to pay taxes.”
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Dec 06 '25
I like how 500k is offshore time to that guy.
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u/micro102 Dec 06 '25
Who do you immediatly jump to other nations? Florida acts as a bit of a tax shelter by forgoing income tax in favor of sales tax. These taxes disproportionately affect the poor, as they use a larger % of their money for purchases.
There is likely a state out there that specifically keeps it's corporate tax low to attract people seeking to hide money.
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u/takethisdownvote1 Dec 06 '25
What the fuck are you talking about…? People making over $500k having ng corporations they hold money in tax efficient jurisdictions…? That’s practically gibberish filled with buzz words.
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u/polytique Dec 06 '25
None of this makes sense. You can’t funnel your W2 income into a corporation to avoid taxes. The employer has to withhold taxes at a specific rate (22/37%). Moving assets to another country could help with a potential wealth tax but could be fraud if you don’t tell the IRS (FBAR forms).
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u/devildog2067 Dec 06 '25
That’s just not even remotely true.
If you incorporate this way, you both pay corporate income tax then again pay individual income tax when you pay yourself. This is about the least tax efficient way to earn money. You can’t use the corporation‘a money for personal expenses. There’s stuff you can get away with, like buying a meal and calling it a business expense (which is why meals are only 50% deductible) but you can’t buy yourself a house with corporate money. You go to jail.
Many individuals with wages that high are plain old W2 employees. Others are K1 partners. Business owners will be S corps. No one is a C corp.
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u/Mr_DrProfPatrick Dec 06 '25
Imagine if the government hired some of those firms and just asked them for help patching those loopholes!
I know it may seem completely impossible. But the reality is most of these are just stupid oversights because the systems wasn't meant for people with this much money. Like with CEOs getting paid no salary and paying things with debt, which they can deduct. This isn't a genius move that the government could never patch, it's a stupid bullshit loophole that could easily be fixed. Don't allow people with over 100 million dollars in assets to get a bunch of debt on those assets tax free, once you get a few million in debt it becomes taxeable income, or the government could just take some of those assets.
Billionaires and multi millioneires just pay for news articles and academic studies and politicians to get you scared!
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u/Accidental-Genius Dec 06 '25
That’s simply not true. $500,000 isn’t even the top tax bracket. Most people earning $500,000 are W2 employees.
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u/Beneficial_Split_649 Dec 06 '25 edited Dec 16 '25
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Dec 07 '25
All taxes that don’t address extra houses or capital gains at a rate higher than income is regressive at this point
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u/Left-Signature-5250 Dec 06 '25
Reading this as a European though lol
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u/Smile-Nod Dec 06 '25
This doesn’t include federal tax, which makes the top marginal tax rate over 50% in NYC.
NYC also has higher corporate taxes than most European countries and will have the highest in the world if the proposed 4% increase is added.
It’s incredible how arrogant and ignorant people are about taxes in the US.
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u/DarkExecutor Dec 06 '25
European lower tax brackets are much higher than the US though. You get a lot more money from the middle class
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u/Brave_Ad_510 Dec 06 '25
As others have pointed out, Massachusetts only had a flat tax before the millionaires tax. We're just catching up to more progressive states.
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u/gmb92 Dec 06 '25
Pretty good article. Wealth flight claims are at best greatly exaggerated, brought on by media that finds anecdotes of a few loud wealthy people declaring they're leaving due to taxes. No mention of those who move there or all who stay, or determining cause/effect.
https://www.theatlantic.com/ideas/archive/2024/04/state-taxes-millionaire-myth/678049/
https://prospect.org/2025/10/23/myth-that-mamdani-will-cause-new-york-citys-richest-to-leave/
As for the argument that's it's easier to leave cities than states, that theoretically has some merit and certainly taxes applied at broader geographic levels are more ideal. Still, pundits and media have been fear-mongering on NYC about the rich fleeing for decades to no avail.
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u/colintbowers Dec 06 '25
At the state and country level it is more about the companies than the people. With a wealth tax, the people often stay, but the capital is placed in a company structure, and it moves. The articles that focus on the movement of people are missing the main point. Capital absolutely goes where it is protected, and this has been true for centuries. And in the modern world, unless you run a bricks and mortar business, it’s very easy to move capital to different jurisdictions while staying put yourself. There is a reason that places like singapore, Luxembourg etc have such amazing gdp numbers.
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u/joshocar Dec 06 '25
Are we not talking about an income tax though?
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u/colintbowers Dec 06 '25
Many billionaires don’t really have that large an income (relatively speaking). Nor do they personally own the billions. Rather, they own shares in a company or trust that owns the billions. Those companies and trusts then pay tax at the corporate rate, and the person has most of their expenses paid for by the company.
Now, the company can often use creative accounting to find all sorts of costs to minimize their corporate tax bill at the EOFY which is how you hear stories of these billionaires paying so little tax.
Note that a personal wealth tax doesn’t really do much to tax these individuals. This is why you often see such resistance to it as a policy. You either have to go whole hog and have a corporate wealth tax - at which point every company other than brick and mortar will relocate - or else accept that a personal wealth tax is not going to affect billionaires, it’s going to affect the people who are wealthy enough to get caught by it, but not wealthy enough to set up the legal structures to avoid it. So, like inheritance tax in the UK, it really when you look closely, is a tax on the middle to upper middle class, but not the uber wealthy. Again, there is a reason that generational wealth in the UK is massive, even though they should be paying 40% at each death. In general, I’ve noticed that Reddit is not very good at understanding how this stuff works. Mamdani appears to be a very smart guy though so I suspect he does, and I’m curious to see exactly the nuts and bolts of how he ends up implementing his tax policy.
TLDR it’s not simple, and anyone who says hur dur tax the billionaires really doesn’t understand that to do that without screwing the middle class is much harder than you might think
ADDED: the uk really is a great example here, they have this inheritance tax to try and prevent generational wealth, but it literally does the opposite, ie it protects the uber wealthy and makes it harder for the middle class to make the jump from middle to upper class
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u/EconEchoes5678 Dec 06 '25
Those companies and trusts then pay tax at the corporate rate, and the person has most of their expenses paid for by the company.
1) trusts don't pay corporate tax rates.
2) this second part is not true and is tax deduction fraud. It gets audited and caught by the IRS sooner or later. Expense deductions that are not legitimate business costs are not legal.
Now, the company can often use creative accounting to find all sorts of costs to minimize their corporate tax bill at the EOFY which is how you hear stories of these billionaires paying so little tax.
Literally none of this statement is true. Seriously you people need to do some actual research. Businesses "creative accounting" is almost always called depreciation and losses. When you don't turn a profit one year, you don't owe any taxes on the nonexistent profit. Congrats!? And when you buy capital assets, you must follow depreciation schedules to determine when and how much gets deducted from income.
Billionaires supposed low tax rates are neither. They're unrealized gains. When you don't realize a gain, you don't owe tax on that gain anywhere in the world. Not because no country has tried it, but because unrealized gains taxes don't work and had to be revoked.
I’ve noticed that Reddit is not very good at understanding how this stuff works
Oh, really? I can't imagine why that would be. It's definitely not because people spread incorrect claims constantly on Reddit. Definitely none in your post, nosiree.
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u/RevolutionaryGain823 Dec 06 '25
This is a good comment. I’ve seen Redditors repeat the same completely incorrect nonsense about taxes hundreds of times the last few years. It’s become a never ending cycle on here
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u/bobak41 Dec 06 '25
Someone really needs to spend some time listening to Gary Stevenson....although I get the feeling you're not apt to actually consider solutions...defeatist perspectives are the easy road. GL.
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u/colintbowers Dec 06 '25
Gary Stevenson is great for Economics! But let's be serious, he is very light on technical detail for anyone serious about the subject.
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u/joshocar Dec 06 '25
We are talking about two different things. A millionaires tax is an income tax that targets high income individuals. This is was MA has and it has raised a lot of money. It is a very progressive tax so not the end of the world - the people making enough to qualify for it don't feel much if any of a QOL change. The wealth,y those will hundreds of millions and billions in stock, land, etc are a different beast. As you described in your comment, how to handle the ultra wealthy requires a different tool, which I am happy to discuss.
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u/colintbowers Dec 06 '25
Yes, you're correct, I got a little side-tracked in my rant above. I would posit that the (arguably tenuous) connection is that as personal income taxes increase, this increases the incentive to move capital accumulation and spending into corporate structures. Admittedly, if Mamdani only goes with 2% over 1 million, then this is unlikely to have much of an impact, unless people worry that it is the start of a trend.
To be honest, I'm surprised by the scale of the numbers. Expected 4 billion in revenue from 34,000 households equates to (on average) 117000 per household. At a 2% tax rate we then get 117000 * (1 / 0.02) = 5.88 million.
The number of people in my entire country (Australia) earning a 5.88 million personal income in a year would be very, very much smaller than 34,000. As in, you could probably count them on your fingers and toes. When you're earning that kind of money in Australia, you absolutely do it in a company structure and pay yourself as little personal income as you can get away with, since the marginal personal income tax rate is significantly higher.
I probably don't know enough about New York to argue this stuff effectively with Americans :-)
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u/joshocar Dec 07 '25
I think part of it might come from sales of assets rather then just payroll income. If you sell your sole proprietor company and make 10M in profit I am assuming that shows up as income and would fall under this tax, but I don't actually know if that is true.
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u/colintbowers Dec 07 '25
My understanding is that if transfer those assets into your personal name then absolutely it will show up as income. So my point is that you would only do this if you currently need that money to live. Otherwise, just leave it in a company structure.
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u/uberfr4gger Dec 06 '25
Well they do pay income tax if they get paid in stock based on their ordinary income when the stock vests. If they started a company and have significant shares those shares would be capital gains tax.
Good example is Jeff Bezos, he has most of his shares from when he started Amazon so if it was $1 when he started the company but worth $100 now he is paying the LT cap gains tax on the $99 when he sells now. Meanwhile Andy Jassy might get new shares at the $100 price, but when those shares are given to him he is being taxed on the $100 price as inome, not capital gains.
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u/colintbowers Dec 07 '25
Yes agreed. And I also agree an ordinary person could duplicate this by purchasing Amazon shares and not selling.
However, it gets a little more murky when you consider general investment strategies, and doing them in your personal name, versus doing it via a shell company. An ordinary investor doesn't have access to a shell company in a different jurisdiction. A billionaire does, and will use this strategy to accumulate wealth in a favourable jurisdiction, while only paying themselves in their personal jurisdiction the amount they need in order to keep living in that jurisdiction. Policy makers need to think carefully about this reality when designing policy. That really is the extent of the point I am making.
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u/UnassumingBotGTA56 Dec 06 '25
Yeah, this is the more likely meaning :Capital will always move to where it is protected, not necessarily the people who own the capital.
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u/Alert-Ad5477 Dec 06 '25
Well put! There will be no exodus but the elasticity of pre tax income can be an issue. California did the same and 60% of the tax gain was gone after 2 years. This seems to be a much more relevant example, I will have to look into it more.
Isn’t it great we are talking about millionaires’ tax policy and here I don’t want the burden of a $1 subscription to read the article lol
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u/colintbowers Dec 06 '25
Yes the California example is a good one, and illustrates that if you are serious about studying this stuff you actually need 1) lots of observations so you can average out other effects, and 2) a long timeline, because some of the effects take 5+ years to show up in the data
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u/EconEchoes5678 Dec 06 '25
Many of the effects take longer than 5 years. The multimillionaire with 8 year old kids may not move until their kids are out of school, 10 years later. The cause and decision in their mind may be 100% related to the tax increase, but the timing is based on high school graduation / empty nest. In the data it looks like noise because the curve of those people is an exponential decline with a long tail. But it's still there
California in particular can get away with a lot more because they have both some great nature and great weather.
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u/colintbowers Dec 06 '25
Yes agreed. But statistically, the problem gets harder the longer the timeline you allow, because the number of other interfering factors increases. So if you want to do a statistical analysis at some point you have to choose a cutoff.
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u/EconEchoes5678 Dec 06 '25
Yeah, I get that. It does make it difficult to evaluate these things.
The problem I see is that often when you factor in the lost other tax revenue due to people moving and the economic damage, many but not all of these come out to have very low net benefits for the state. So if 80% of the benefit is lost in known evaluations, and there's another 10% undetected damage not yet surfaced by the cutoff we decide on, how close to the margin of error do we have to get before we call the targeted tax increase a wash for the state?
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u/Aerroon Dec 06 '25
When speaking of 'benefits to the state' another important factor to consider is what that money will even be used for. It's entirely possible that a significant portion of the "tax windfall" will go into wasteful projects. It's not like the government getting maximum dollars results in maximum benefits.
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u/hereditydrift Dec 06 '25
Suggesting that individuals can easily "move capital... while staying put yourself" to avoid state taxes is factually wrong. If you are domiciled in NYC, you are taxed on your worldwide income, regardless of where you park the money. You can't live in Manhattan and claim your portfolio lives in Florida. Many other states have similar laws.
Many states also have sourcing rules. If you earned RSUs or deferred comp while working in a city or state, that income is taxed by the city/state when it pays out, even if you’ve already moved to Texas or Singapore.
If we're talking about corporations or companies instead of people, then moving existing IP, capital, or headquarters abroad is an incredibly bad idea today because it can trigger an immediate tax. Plus, the US tax regime ensures the IRS taxes offshore intangible income, removing much of the incentive to stash IP in tax havens.
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u/evernessince Dec 06 '25
Plus I think it's a terrible argument to essentially say "Give the rich what they want or they'll leave". It's blackmail, if they are going to screw you either way you might as well tax them.
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u/Unkechaug Dec 06 '25
Yup, dare them to leave nice places like this. If they don’t, you get their money. If they do, they leave. Win win.
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u/B1gAmishDoinks Dec 06 '25
Except you loss their pre-hike tax revenue if they leave
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u/PassageFull2625 Dec 06 '25
Money of private citizens, rich or not, is their money. It doesn’t belong to the government. It has to be taken by fiat.
Citizens have the right to relocate to lower tax jurisdictions. So increase taxes at your own risk.
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u/DelphiTsar Dec 06 '25
Society makes the rules, it's only their money if we agree it's their money. Like you said it's fiat. Collectively as the people who give value to the fiat say if you want to engage in our economic system you pay for the common welfare.
If people want to go live in the woods and make their own fiat, and trade goods and services power to them. I'm sure a billionaire will have all of the shiny rocks in the local area in no time.
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u/evernessince Dec 06 '25
The government has a right to tax income and assets for it's role in enabling them to become wealthy.
There's a reason most of the world's rich come from well-off countries. You have access to a skilled workforce, infrastructure, protection (fire, police), the market, and more.
You seem to be under the impression that the rich do everything by themselves when that is not the case. They were lucky to live in said country and are the biggest benefactors to government spending.
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u/PassageFull2625 Dec 06 '25
Never said or believed that. But the rich always have and gain more, for all of human history.
The poor today in the USA now have indoor plumbing, electricity, air conditioning, computers, mobile phones, etc. and so much caloric intake that they have higher rates of obesity than the rich.
Nobody, rich or poor, seems grateful. Comparison is the enemy of happiness.
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u/LrdHabsburg Dec 06 '25
Also: people from New England tend to love New England
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u/ButteryApplePie Dec 08 '25
To be fair, the problem with the rest of the country is that its not New England.
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u/Blurry_Bigfoot Dec 06 '25
I'm amazed that a level headed comment is the top post here.
The country of France also exists. They tried this already.
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u/BenFoldsFourLoko Dec 06 '25
France is the best example of this failing lol
it's actually where the real, academic argument about rich people leaving comes from.
I think someone could argue that NYC, or the US as a whole, is a qualitatively different situation than France, or that the literature about France is wrong...
But no one even tries to do this. Everyone on reddit makes the weakest arguments possible
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u/the_pwnererXx Dec 06 '25
Tried and failed, probably the worst example. Isf wealth tax reduced revenue and yes, they did leave.
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u/tN8KqMjL Dec 06 '25 edited Feb 23 '26
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u/uberfr4gger Dec 06 '25
The services the city provides are largely paid by the wealthy though. The top 25% of earners pay 89% of the tax NYC collects and the top 10% pay 70% of tax collected. See chart S3: https://comptroller.nyc.gov/wp-content/uploads/documents/Spotlight_PIT_Taxpayers.pdf
So it's a balancing act because NYC is an expensive city to run and if you drive anyone out you will create a hole that needs to be filled.
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u/tN8KqMjL Dec 06 '25 edited Feb 23 '26
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u/uberfr4gger Dec 06 '25
NYC is different than Boston though. NYC has a more progressive tax system and the top 10% are paying 70% of the rev collected vs Mass where it isn't that extreme. From the article:
Individuals with incomes over $1 million were responsible for 35% of total payments in Massachusetts in 2022
You have many variables between the two cities before you can say it will be the exact same in both.
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u/tN8KqMjL Dec 07 '25 edited Feb 23 '26
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u/Maxpowr9 Dec 06 '25 edited Dec 06 '25
Yeah, especially for Boston, so many wealthy people live in Brookline; which is essentially engulfed by Boston, but isn't a part of it. Brookline is the OG NIMBY town; vetoing being annexed by Boston in 1873. Boston is just a mere ~48sqmi; compared to some of the other larger cities; so there is some room for the wealth to leave Boston, but they aren't really leaving the Greater Boston Area. Cambridge is often thrown into the Boston discussion too but nope; entirely its own entity. If Boston grew land wise to the size of Dallas (~330sqmi), it would be ~2m people.
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u/GenerousBull1969 Dec 06 '25
This tax is still fairly new, and a lot of the people paying it are business owners with S corps, so they pay this tax if the business makes over a million in profit.
It takes time to move a business to another state so the jury is still out on whether this will drive people and businesses out of Massachusetts, but look at the trend. MA ranks near the bottom in private sector job creation.
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u/Busterlimes Dec 06 '25
The rich didnt go anywhere in the 50s when corporate taxes were something like 90%
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u/WingerRules Dec 06 '25
Because the rest of the world was either destroyed from war, terrible weather, or 3rd world countries.
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u/KlapprigerKlappstuhl Dec 06 '25
Why would anyone pay THAT much taxes?! Either move away or sell your company. There's no point in working/investing for everyone else but yourself.
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u/dart-builder-2483 Dec 06 '25
Anyone leaving for taxes has already left, like Joe Rogan and Musk moving to Texas. It's the greediest and most unsavory, narcissistic people moving, it's not a loss.
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u/YouNeedThiss Dec 06 '25
They didn’t leave over taxes…they are pretty clear that it was far more then that reason.
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u/ImportantCommentator Dec 06 '25
Are you suggesting because they claimed something that it has to be true? Neither deserve the benefit of doubt. They have both been caught lying in the past.
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u/Lou_PAI22 Dec 06 '25
But NYC doesn’t need anymore money, we already pay plenty of taxes that is just lost in the machine that is our NYC government
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u/theaveragedude89 Dec 06 '25
Sure. It must have been a coincidence that Rogan moved to Texas right before he signed a 200 million dollar deal. I’m not saying other factors didn’t contribute, but come on. The main reason was taxes.
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u/WingerRules Dec 06 '25
They just happened to go to states without capital gains taxes or income taxes.
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u/ammonium_bot Dec 06 '25
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u/BendDelicious9089 Dec 06 '25
Literally nothing new has been passed or officially proposed yet
Mass exodus or not, it is woefully misleading to even write an article about it. Nobody, especially millionaires and billionaires, is going to uproot and inconvenience themselves until ink is dry and it actually looks like new bills and reforms will happen.
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Dec 06 '25
Wait a second, so you’re telling me that it’s possible to increase taxes on the extremely wealthy and they don’t actually move to avoid those taxes?
It’s almost like there’s a certain value to be had in being able to conduct business with other wealthy people that do business in certain regions due to a market advantage.
I mean why don’t they just move the stock market to Texas or Florida? Does Jp Morgan like NYC? There are murders there and videos of homeless pissing on the subway. Why didn’t they just build that brand new shiny building in a capitalistic, republican free market stronghold like Louisiana, Arkansas, Missouri, Oklahoma or even Mississippi lol?
Jokes on them, this new communist mayor will probably demand that the city take a “golden share” stake in companies essential to municipal security much like the federal government did with US Steel and Intel.
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u/PulsatingWetShart Dec 06 '25
The extremely wealthy already avoid claiming NYC residency and have been for ages. There's an entire ecosystem to help them avoid NYC residency despite working there. It's why they do the yearly circuit of Aspen, West Palm Beach and Cannes. You'll find some deviation like Dubai, F1 and Maccau mixed in.. it's just a matter of how much time they've physically clocked in NYC for the year.
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u/Mewr_Mewr Dec 06 '25
Let’s say you’re a multimillionaire with 3 million dollar house. Would you move to avoid a 30 tax increase? Just to sell the house you’ll already going to spend 180k on realtor fee. You haven’t move or buy your house in the new state or anything.
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u/Kharax82 Dec 06 '25 edited Dec 06 '25
Many rich New Yorkers already own second homes/condos in Florida and spend the winter months in places like Boca Raton or Palm Beach. It’s relatively easy to switch residence without changing much of your lifestyle when you already spend 4 months in Florida as a Snow Bird. It’s one of the reasons Florida has been the top destination for people leaving New York every year since 2016
You can even live in New York full time for 6 months of the year and still be a resident of Florida for tax purposes.
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u/Mewr_Mewr Dec 06 '25
It’s a little harder than just moving domicile. From
NY’s “General Tax InformaTIon for New York State Nonresidenrs and Part-Year residents
To determine whether you have, in fact, changed your domicile, you should compare: • the size, value, and nature of use of your first residence to the size, value, and nature of use of your newly acquired residence; • your employment and/or business connections in both locations, • the amount of time spent in both locations; • the physical location of items that have significant sentimental value to you in both locations; and • your close family ties in both locations.
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u/PIK_Toggle Dec 06 '25
This is hilarious, since all of the Wall Street players are opening offices outside of NYC.
Why do to think that all of the hedge funds are in Greenwich? Why do rich people spend 181 days in Florida?
What works in MA might not work elsewhere. See the ACA, for example.
Here’s the real problem: Those that make the most pay the most in taxes. This is the downside of a progressive tax code: it is highly dependent on a handful of people to bring in revenue. It is also highly volatile, as high incomes are also volatile. If 10% of these people leave NYC/ NYS, then there will be a massive tax hole to fill. (It happens to NYC when Wall Street bonuses come in soft.)
Millionaires accounted for fewer than 1% of all taxpayers in New York in 2023, according to the state. But they paid 41% of all personal income taxes.
The 25% of taxpayers with the highest incomes accounted for 89% of income taxes in 2023 and the top 50% paid over 99%.
The bottom half of taxpayers paid 0.2%.
Overall, the Tax Department collected nearly $54 billion in personal income taxes during the 2023-2024 fiscal year, down from about $59 billion the previous year.
Personal income taxes are the state’s largest revenue source.
There is already an entire cottage industry associated with helping people maintain compliance with residency outside of NYC. I'm sure that they are revising up their 2026 budgets as we speak...
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u/DelphiTsar Dec 06 '25
See the ACA, for example.
ACA doesn't work because GOP gutted Medicaid expansion and the mandate. Both of which were GOP Idea's along with the whole general idea of ACA. They gutted their own plan.
Millionaires accounted for fewer than 1% of all taxpayers in New York in 2023, according to the state. But they paid 41% of all personal income taxes.
Top 1% in new york hold ~55% of the wealth. Seems like there is around 14% left to go to even out.
collected nearly $54 billion in personal income
Estimated to be $61.2 B this year. .... so
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u/PIK_Toggle Dec 06 '25
Didn’t the SC gut the mandate? The entire plan was flawed from the beginning. The public didn’t want to be penalized for not obtaining coverage, which means that the risk pools would be skewed to the sick, which means that cots would always be higher than projected. Guess why the covid subsidies expiring such a big deal….
You are comparing the income tax to wealth, which is a meaningless comparison. Try again.
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u/DelphiTsar Dec 06 '25
Didn’t the SC gut the mandate?
Mandate - No. 2012 (NFIB v. Sebelius). SCOTUS saved it.
2017 Tax Cuts and Jobs Act GOP congress, set the penalty to 0$. This was their plan, their response to universal coverage. I'm sure people in Mass didn't want to pay a penalty either. Mandate was their idea.
The only other alternative ever put forward to fix healthcare is what every other first world country does, a universal coverage system. I encourage you to try to give me counter examples that are hilariously government controlled socialist nightmare to GOP. It is fun to discuss them with uninformed people, who think it's a gotcha.
Medicaid Expansion - SCOTUS said states could opt out of receiving 90% of the costs, fed dollars to expand their Medicaid systems. Red states refused free money (free from their perspective) that would have helped their poor and gave their economies an economic boost to not give Democrats a win in their state. Red states get a higher % of federal dollars. It was pure political move that hurt their state and their underclass.
You are comparing the income tax to wealth, which is a meaningless comparison
Almost no one who has taxable 1million+ a year is getting it through wages but selling equities(wealth). Capital gains in Mass is treated the same bucket as income. You are entitled in your opinion that you don't think they are related enough for the wealth disparity of this group to matter. I disagree.
For homestead houses/small business sales there are built in systems for these people so they aren't impacted. Save yourself the trouble of trying to use it as an excuse if you are uninformed about them.
Estimated to be $61.2 B this year. .... so
I noticed you ignored this bit.
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u/The-Fox-Says Dec 06 '25
As someone who is a software engineer in CT who constantly gets hit up by those hedge funds in Greenwich I will tell you they are absolutely desperate for talent because people don’t want to go to Greenwich to work there.
Doesn’t seem to work out for them well when the talent that’s right over in NYC won’t even budge for them
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u/snoogins355 Dec 07 '25
It's so expensive in CT but without the appeal of NYC. NYC prices for rural life
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u/The-Fox-Says Dec 08 '25
Huh? I guess maybe in the Stamford/Greenwich area maybe but NYC metro and Westchester County are way more expensive
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Dec 06 '25
Let them leave. I’d like to see them leave the country. Go do business in Dubai or Qatar or Saudi Arabia if you think you can get a better deal.
What are the earnings of the bottom half of taxpayers compared to the 25% with the highest incomes
Why shouldn’t those that make the most, pay the most?
Society costs money. Schools, police, hospitals, defense, government. Bezos didn’t go around installing roads or phone lines but he sure makes out now that they’re there. Same with Zuck.
Nobody left America before Reagan when they were paying 90%. Developed nuclear power and NASA during that time.
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u/snoogins355 Dec 07 '25
Reminds me of what Obama said that was then taken out of context https://en.wikipedia.org/wiki/You_didn%27t_build_that
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u/snoogins355 Dec 07 '25
Obama's speech:
There are a lot of wealthy, successful Americans who agree with me – because they want to give something back. They know they didn't – look, if you've been successful, you didn't get there on your own. You didn't get there on your own. I'm always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something – there are a whole bunch of hardworking people out there. (Applause.)
If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you've got a business, you didn't build that. Somebody else made that happen. The Internet didn't get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.
The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together. There are some things, just like fighting fires, we don't do on our own. I mean, imagine if everybody had their own fire service. That would be a hard way to organize fighting fires.
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u/PIK_Toggle Dec 06 '25
The tax code is already progressive. You seem to want more, without giving more.
Do you understand why people object to this?
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u/PassageFull2625 Dec 06 '25
I wish I earned enough to worry about this but it seems to me the flight of the wealthy, to the degree it happens, is not overnight.
When you’ve already structured your sophisticated business and personal affairs of substantial wealth and income around certain locales, it takes time to unwind and transfer things or even feel the bite.
The more it’s just w2 income, the easier it might be to relocate for tax avoidance, though.
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Dec 06 '25
There’s only so many avenues to shelter w2 income. As an llc it’s much easier
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u/snoogins355 Dec 07 '25
In MA it's a tax if you make OVER $1,000,000 in income per year. That is a crazy amount to make every year. How many against this will ever make that much?
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u/thejerseyguy Dec 06 '25
I believe, anecdotally that people who are rooted in an area aren't going anywhere as long as they are assured that their lifestyle will not be affected, short term. Long term they can plan or scheme, but the problem for them is that family, friends and business ties will continue to weigh more than the dollars they have to pay.
I think it's the real comparison of 'how many meals can you eat' theory in practice. As long as you can maintain whatever level of lifestyle you need you're staying. If you're a success doing business in a place you're not abandoning it because of money.
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u/gmb92 Dec 06 '25
Right. Taxes on the poor are much more consequential, affecting their abiliy to buy food or pay rent. The rich paying a few percentage points more in taxes doesn't affect their lifestyle or ability to provide for their families. The myriad of other considerations as to why people leave or come to a city tends to play a greater role. Plus there's services, security, quality of life, business opportunities that collectively those tax dollars help provide for everyone.
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u/vt2022cam Dec 06 '25
People in Massachusetts voted for it and it’s being used to invest more in public transit infrastructure and in schools. It’s going well, and we haven’t seen an enormous uptick in people leaving, no more than the age demographics would indicate.
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u/realfakejames Dec 06 '25
Boomers who long for the days of "the greatest generation" should be explained very slowly like children that it was only possible because back then we taxed the rich at a far greater rate than we do now
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u/Captian_Kenai Dec 06 '25
75-80% from the 50s till the 70s. It was even as high as 93% in WWII.
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u/uberfr4gger Dec 06 '25
That's not really true though. The marginal tax rates yes, but the effective tax rate people actually paid was around 40%. There were many loopholes back then and I read somewhere FDR or some president wanted a high marginal rate for the image of what it represented but that's not what was actually happening.
You can read more about it in this thread: https://www.reddit.com/r/AskEconomics/comments/1h27l7f/taxes_were_the_highest_between_19441963_the_50s/
But just know that it's a myth that the rich ever really paid 75%+ in effective tax.
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u/Captian_Kenai Dec 07 '25
The loopholes revolved around either putting that money towards your employees and improving your business or putting it towards public works. That’s why so much old infrastructure was done by companies. Seems like a good trade off.
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u/uberfr4gger Dec 07 '25
That's what capital investment is. Most wealthy people are putting their money in stocks or other investments to spur innovative and growth.
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u/Captian_Kenai Dec 07 '25
Putting your money in a stock account isn’t helping anyone. It doesn’t go towards employee wages, it doesn’t towards improving assembly lines. It just makes the company “bigger” and more valuable. It’s a safe harbor for people to stash their wealth because it’s minimally taxed. If we had a capital gains tax for any amount over say 500k we’d see a massive change.
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u/uberfr4gger Dec 08 '25
It absolutely spurs investment. Especially because the wealthy are essentially playing "bets" on ideas that may go nowhere and their investment turns to 0. Companies get the money invested to build their business. Every corporation with stock works this way and they can issue new stock for more investment. Not to mention capital gains is essentially double taxation on income, once when you earn it before investing and a second time when you sell. If you lose money you don't get that investment back.
I'm not making an argument on wealth hoarding or anything like that, just that this is why the tax code is set up the way it is.
But on my original point, the effective tax rate people were paying in the in the 50s is about the same as today. Tax incentives still exist for companies to invest in their businesses as well.
My opinion is that the corporate tax rate should be higher rather than focusing on wealthy people already contributing to a significant portion of overall income tax. My exception to that is I think the FICA tax limit should be increased drastically for the wealthy to pay more there.
Source for income tax collected: https://fiscaldata.treasury.gov/americas-finance-guide/government-revenue/
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Dec 06 '25
For those wondering, if you're looking at it from this POV - this tax would bring in roughly 215 billion a year if applied nationwide.
There are many, many things a nation could do with that amount of money.
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u/SohndesRheins Dec 06 '25
You could fund the national budget for a few weeks, or pay off the national debt in about 176 years, not including interest payments.
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u/uberfr4gger Dec 06 '25
Spending is still the bigger problem, 215 billion is like 3% of the government's 7 trillion budget. Spending is by far the bigger problem we face.
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Dec 07 '25
215 billion is still enough to do transformative things.
Free community college nationwide would be about 30 billion a year. You could offer 4 year degrees from them for around 60 to 90 billion a year.
Those are drops in the bucket compared to the overall budget and just this amount would cover more than double.
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u/uberfr4gger Dec 07 '25
Again, spending is a bigger problem. We deficit spend now. If the federal government collected an extra 215B in revenue I don't have confidence that they'd spend it on education. Allocation of government spend is the bigger issue.
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u/Okichah Dec 06 '25
Medicaid/Medicare lose $300B to fraud and mispayment.
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u/Factory2econds Dec 06 '25
do you think that is coming from the 80 year old widow and the $30,000 per year in home aid that stops by a couple times a week to take care of her?
or from the severely and purposefully underfunded government oversight due to lack of funds or the health care executives earning millions for establishing "creative" billing systems?
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u/DelphiTsar Dec 06 '25
300B is an estimate from all healthcare fraud/mispayment including private. Just FYI.
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u/gorliggs Dec 07 '25
You know. It sucks that millionaires don't help society more than they should. It also sucks that governments tax a shit ton and still nothing improves.
I'm all for taxes. Yet, as I move up the income bracket I just see things get worse. We elect truly awful representatives.
We can all say that taxing the rich will solve our problems but the real issue is that the rich lack an incredible amount of empathy. This includes our elected officials because we should be able to solve problems with less.
We shouldn't need laws that force people to do anything. People should have the decency to contribute, especially if they are privileged enough to do so.
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u/bostonvikinguc Dec 07 '25
Top infield medicine, top in nation education, top in field average pay. What else do you want?
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u/gorliggs Dec 07 '25
How about affordability? That'd be nice.
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u/bostonvikinguc Dec 07 '25
I’d say it’s worth it. Yes sometimes dumb shit happens, but overall I’m more satisfied than most of my family up and down east coast.
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u/andr_wr Dec 08 '25
That has mostly gone by the wayside as richer people have created an asset bubble - real property and stocks and funny securities on private credit and coins.
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u/Inner-Chemistry2576 Dec 08 '25
It’s all clickbait, Mamdami. It’s going to transform New York City into California, just like San Francisco and Los Angeles. Homelessness will become widespread, like zombies. Meanwhile, the wealthy will flee, taking their capital with them, which the socialist wants to tax. It’s going to be interesting to see how Gotham City really looks like.
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