Perhaps contrary to concerns that higher taxes could spur a disastrous exodus of New York City's wealthiest residents, history shows its one percent like to stay put.
A study conducted by the city's Independent Budget Office shows New York's highest earners -- those making more than $500,000 annually -- don't move at a higher rate than lower-income residents.
In fact, a higher proportion of those who did move stayed relatively close to the city in the suburbs of New York, New Jersey, and Connecticut in 2012 than in 2008. Both New Jersey and Connecticut are well known for having high income tax rates, which suggests that higher tax rates don't actually scare off the wealthy -- or that the wealthy aren't actually seeking tax havens.
Monday's report is good news for Mayor Bill de Blasio (D), who reportedly spooked the city's wealthiest residents with a pledge to hike up taxes in order to pay for universal pre-K. A tax hike was eventually avoided with a deal brokered by the state, but not before de Blasio's predecessor Michael Bloomberg (I) warned any move to raise taxes is "dumb" -- a reversal from Bloomberg's own 2008 stance insisting none of his rich pals were leaving the city over high taxes.
Conservative pundits including Glenn Beck have claimed the rich will flee in droves over de Blasio's progressive agenda.
"One friend says 10 wealthy people have told him they are leaving and another says disgusted New Yorkers bought $1 billion in residential property in Florida since the November election," New York Post columnist Michael Goodwin wrote in a column back in March. "The Sunshine State confers an automatic tax cut of about 12 percent because it has no city or state income tax, nor does it have an inheritance tax."
Florida's portrayal as a tax haven for the absconding rich was also upended by Monday's report. Although it's the third most popular destination for exiting New Yorkers, that position apparently has nothing to do with income level.
Florida was the destination of more than 10 percent of the households moving out of New York City in 2012, making it the third most popular destination. Given the state’s popularity among retirees, it is perhaps unsurprising that the share of high-income households relocating to Florida was relatively small—just 2 percent of those who moved in 2012.