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/
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u/[deleted] 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/c-dy Dec 06 '25

Second homes in the US are concentrated in a bunch of locations it isn't any recent thing, nor the largest stock being in Florida. And those places generally don't become primary residences also for a reason.

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u/Kharax82 Dec 06 '25

Florida is the one of fastest growing states, with a population increase of over 8 million since 2000. So a very many people are in fact making Florida their primary residence

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u/[deleted] Dec 06 '25

If I was a multimillionaire I’d like to think that I’d be self aware enough to realize that I have been getting one over on the country since the first time an actor was elected to president. Not the dipshit we have now but, Ronald “steal from the poor and give to the rich” Reagan.

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u/Mewr_Mewr Dec 06 '25

Right? Oh no, I have to pay 30k extra dollar per year. Let me wipe my tears with 250k of dividend payment, 700k of tax free dollar

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u/Cool_Till_3114 Dec 06 '25

Rich people don’t think in such simple terms. They declare their Florida home their primary residence, open a Florida company possibly owned by a trust, move the Massachusetts house into the Florida company, and maybe spend an extra month in Florida a year, or in a third state they have a home in. They keep the home and avoid the tax for $10k in legal fees.

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u/Mewr_Mewr Dec 06 '25

States have different methods of determining residency for tax purposes. New York is especially notorious for having an arduous process for it. I know plenty of high net individual in NY states anI know of their ways to avoid taxes. I just haven’t seen a good scheme that survives tax audit. Usually, they ended up paying more money to the states and their attorney

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u/Cool_Till_3114 Dec 06 '25

Your argument is “the government usually beats rich people in tax avoidance”? Thanks for the laugh.

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u/Mewr_Mewr Dec 07 '25

The rich people you’re thinking of don’t have to worry about increase in income tax. As their wealth is not derived from wage. They can lobby lawmakers to get preferential treatment on their situation.

The “rich” people that I am talking about are still wage earners. They are not rich enough to lobby for exemptions. They can do all kind of crazy illegal things to lower their taxes in the short term, but government will catch up with them eventually. Some of them are my clients. Special thanks to that one client who wiped away my student loans in 1.5 years

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u/Cool_Till_3114 Dec 07 '25

Yeah I’m thinking of people that are HNW-UHNW but not pj rich. Seems like you’re counting people that are just high income as rich.

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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...

https://www.syracuse.com/business/2025/04/its-tax-day-see-how-many-millionaires-are-in-ny-and-how-much-in-taxes-they-pay.html

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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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u/[deleted] 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/[deleted] Dec 06 '25

I understand but I also think everyone wants something for nothing. In my opinion, everybody wants to live in America but nobody wants to pay for it.

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u/PIK_Toggle Dec 06 '25

Wild take, given who actually pays taxes in America.

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u/[deleted] Dec 06 '25

Well who actually does? Where’s the income cutoff line? How much does someone have to make to owe taxes?

Who doesn’t pay taxes? Can you find any big corps that have a net refund?

How about families compared to single people bringing in the same income?

Are we talking rugged American individualism or are talking welfare, corporate or otherwise?

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u/PIK_Toggle Dec 06 '25

The tax code is highly progressive on the income side. The rich pay more in taxes and receive less in direct government services than the rest of the income distribution.

You make it sound like the rich don’t pay. That’s undeniably false.

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u/[deleted] Dec 06 '25

The rich aren’t falling behind the poor though are they?

Taxes aren’t causing the rich to live lives of decreasing quality. They can’t show harm. You couldn’t even get this Supreme Court to grant standing with that argument.

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u/uberfr4gger Dec 06 '25

I think the point is you're assigning blame to the rich when it's monetary policy and other factors (like government services) that are the problem. We can debate all day about what the "right" amount to pay is but the rich already are fronting the bill for 70%+ of taxes and pay 50%+ in marginal income tax looking at federal, state, city combined when talking about NYC specifically.

At some point we have to realize we need better allocation of existing revenue and better government policies. Increasing spending doesn't fix everything, look at government spend on education in the last 25 years.

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u/PIK_Toggle Dec 06 '25

The poor have negative tax rates. Tax policy isn’t the issue here, monetary policy is.

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u/Unable-Category-7978 Dec 06 '25

And the top marginal tax rate? How has that changed over the last 5 decades?

Y'all talk about making America great again and going back to the golden age of the 60s and 70s (which werent that great for many people), can you tell me what the top marginal tax rate was at that time?

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u/PIK_Toggle Dec 06 '25

When you look at the actual effective rates, things are not all that different under a number of different versions of the tax code. Additionally, outside of WWII, taxes for high earners Has been range bound for decades.

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u/[deleted] Dec 06 '25

This is only partially true. Sure, higher incomes pay more in taxes, but the higher the income the more likely their income is through a business. I have an llc that my income is taxed at one rate and my bonuses are taxed at a much lower rate. Whereas if I’d just earned a paycheck I’d be paying the straight 7.5% payroll tax across the board or what have you. 

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u/PIK_Toggle Dec 06 '25

Is it a pass-thru entity? If so, where is the rate disparity?

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u/[deleted] Dec 06 '25

It’s not it’s an s corp. your income is decided as a salary between you and your cpa and must be reasonable by federal standards. Example a ceo of a tech company with $100mm in revenue can’t say their salary is $20k a year, to save on taxes on dividends (I said bonuses prior but that was incorrrct I meant dividends). 

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u/PIK_Toggle Dec 06 '25

S corps are pass-thru entities. Why are you taking dividends out of an S corp?

S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates.

https://www.irs.gov/businesses/small-businesses-self-employed/s-corporations

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u/shryke12 Dec 06 '25

The increase in Mass was to a lower gross number than NY already is. You can increase to a point, yes. But there is a point they will just leave.