Mamdani's higher taxes won't be the only costs

During an inauguration in which Rep. Alexandria Ocasio-Cortez introduced him and Sen. Bernie Sanders swore him in, New York City Mayor Zohran Mamdani left no room for hope for a more moderate turn now that the campaigning is over, doubling down on threats to "tax the wealthiest few" and delivering fiery rebukes to those who would dare insist that the era of big government is over.

Over the past few months, progressive, pro-tax groups have been working overtime providing cover for Mamdani and his plans to rifle through New Yorkers' wallets. They insist that the wealthy taxpayers Mamdani is counting on to fund all his new bureaucracy will stay meekly put, ponying up more cash whenever called upon to do so.

Someone should make sure to let the flood of former Big Apple residents headed to greener tax pastures know.

In the latest years we have data for from the Internal Revenue Service, residents of New York City moved to a different state entirely at a rate of one person every four minutes in 2021-22 — even after accounting for movement in the other direction. Out-migration also resulted in the city losing over $7 billion in annual income from its tax base.

Progressive groups such as Patriotic Millionaires try to downplay these trends by noting that the millionaire population in New York increased following recent tax increases on the wealthy. But the number of $8 lattes has also grown in New York recently, and it's for the same reason — inflation. Far more important is that New York's share of the millionaire population fell from 12.7% to 8.7% over about a decade, according to the Empire Center.

And while progressives tell you not to believe your lying eyes, around the country, fed-up taxpayers are leaving for lower-tax states, with New York losing the second-largest number of wealthy residents. Many of them went to Florida or Texas, and many took their businesses with them — more firms are leaving New York than any other state.

Other tax-impact deniers point to a spike in sales in the New York City luxury real estate market, as if this suggests a fresh influx of the wealthy. But that is not a rebuttal. Real estate sales require a seller, and those sellers are probably headed to Florida or Texas.

None of this is to suggest that tax increases do not raise revenue in the short term. In general, they do, and they often solve the immediate financing problems for the politician who will be off pursuing a new job by the time the consequences hit.

But the consequences do hit, and they hit the average people left behind after the tax sugar high wears off. The National Taxpayers Union Foundation estimated that New York would have $3.8 billion less tax revenue in 2025 alone because of out-migration. The spending demands of City Hall are not likely to shrink even if the tax base does, and the money will have to come from somewhere. The result is a vicious cycle of tax increases on the taxpayers who are left, which in turn speeds up the exodus to lower-tax states, and so on.

So while Mamdani waxes eloquent about all the ways that big government is here to help, remember its downstream costs as some New Yorkers head for the doors.

This guest essay reflects the views of Andrew Wilford, a senior policy analyst at the National Taxpayers Union Foundation.