According to newly released IRS data, Manhattan attracted the highest number of new tax filers in the United States between 2022 and 2023, yet the borough experienced a net loss of approximately $922 million in adjusted gross income as high-income taxpayers left and were replaced by lower-earning newcomers [1]. This trend is not isolated to Manhattan; other parts of New York City and its suburbs, including Queens County and the Bronx, also saw significant outflows, with Queens losing 17,109 tax filers and the Bronx losing 16,319 to interstate migration during the same period [1]. Suffolk County and Nassau County were also among the top ten counties with the largest net losses in tax filers, all of which were located in either New York or California [1].
The data highlights a continued exodus from high-tax and high-cost states such as New York and California, with many departing taxpayers relocating to lower-tax states like Florida and Texas, which have become major beneficiaries of interstate migration in recent years [1]. E.J. Antoni, chief economist at the Heritage Foundation, commented, "It's very, very clear that people ultimately vote with their feet, and when they feel like they're getting taxed too much, they go somewhere else where they will be taxed less," emphasizing the fiscal challenges faced by states losing affluent residents [1].
The migration of wealthy households carries significant implications for state finances, as high-income earners contribute a disproportionate share of income tax revenue. The loss of even a relatively small number of these households can have an outsized effect on government revenues, impacting funding for schools, infrastructure, and other public services [1]. Economists are increasingly focusing on income migration rather than population migration alone, as Manhattan's experience demonstrates the fiscal risks associated with losing high-income residents despite attracting new tax filers [1].
With the 2026 midterm elections approaching, the migration of high-income taxpayers is becoming a political and fiscal test for governors and state lawmakers, as they compete to attract and retain affluent residents and stabilize their tax bases [1].
CONCLUSION
IRS data reveals that while Manhattan continues to attract new tax filers, the departure of wealthy residents has resulted in a substantial loss of income, posing fiscal challenges for New York and similar high-tax states. This trend underscores the importance of tax policy in retaining high-income earners and highlights the potential impact on state revenues and public services.