New York’s millionaire’s tax refers to the additional personal income tax surcharges applied to the state's highest earners, which contribute a substantial portion of total tax revenue. This page covers CBC’s work on the impact of high marginal tax rates, the migration of high-income residents, state and city revenue reliance on top earners, economic competitiveness, and strategies for balancing budgets through expenditure control.
This page was created with AICBC Insights uses AI to group, analyze and present data and recommendations from CBC's publications. Always reference the cited sources to verify important details..
New York State should balance its budget without increasing personal income taxes or delaying the middle class tax cut.
The State should eliminate unproductive economic development spending as an alternative to tax increases.
The State should appropriately finance capital investment to help balance the budget.
The State should target education aid to low wealth school districts to improve fiscal footing.
The State should use federal aid wisely combined with actions to restructure State spending to improve long-term fiscal health.
Key Data
As of November 2025, filers with adjusted gross income over $1 million—representing less than 1% of all filers—paid 40% of New York’s personal income taxes in 2022.
Between 2010 and 2022, New York City’s share of the nation’s millionaires fell 35%, from 6.5% to 4.2%, while the State’s share dropped from 12.7% to 8.7%.
Had New York maintained its 2010 share of millionaires, the City would have collected $2.5 billion more in personal income tax revenue in 2022, and the State would have collected an additional $10.7 billion.
As of November 2025, New York State and City’s combined top marginal personal income tax rate for the highest earners is 14.776%, which is the highest in the nation.
In February 2021, the top 1 percent of earners were reported to finance approximately 20 percent of the State Operating Funds budget through income taxes.
New York City's share of U.S. millionaires fell 35% between 2010 and 2022, suggesting that further increasing the nation-leading 14.776% top marginal tax rate could jeopardize the revenue needed to fund essential public services. Instead of raising taxes, the city should prioritize improving housing affordability, public safety, and service efficiency to restore its value proposition and attract high earners.
Recommendations related to Millionaire’s Tax
Expanding housing production to improve affordability is paramount to ensuring that living in New York remains feasible and attractive for a broad range of residents.
Clean and safe streets are equally vital, providing the order and quality of life that residents, businesses and visitors deserve.
High-quality and efficient public services — from transit to education — support a prosperous city.
Stable public finances preserve services for all New Yorkers.
The city should avoid increasing the already nation-leading marginal personal income tax rates to prevent accelerating the shrinking millionaire share.
Key Data
40%
— Filers with adjusted gross income over $1 million paid 40% of New York’s personal income taxes in 2022.
14.776%
— New York State’s and City’s combined top marginal rate for the highest earners is 14.776%, which tops the nation.
35%
— Between 2010 and 2022, the share of U.S. millionaires living in New York City fell 35%, from 6.5% to 4.2%.
$2.5 billion
— If the City had maintained its 2010 share of millionaires, it would have collected $2.5 billion more in personal income tax revenue in 2022 alone.
$10.7 billion
— The State would have collected an additional $10.7 billion in 2022 if it had maintained its 2010 share of millionaires.
91,000
— In 2024, 91,000 more residents moved out of the city to other parts of the U.S. than moved in.
New York's share of the nation's millionaires has significantly declined since 2010, resulting in billions of dollars of lost potential tax revenue for the state and city. To fund essential services, the state must improve its overall value proposition—including quality of life and affordability—rather than relying on tax increases that may further drive away high-income earners.
Recommendations related to Millionaire’s Tax
New York must improve its value proposition to retain and grow millionaires as a primary method to fund critically needed services.
Policymakers should avoid further tax hikes, as raising taxes could accelerate the damaging trend of a shrinking millionaire share.
The state must address factors beyond taxes, including quality of life, social and cultural amenities, and the high cost of living, to remain competitive in attracting high-income residents.
Key Data
$34 billion
— Amount of State and City personal income tax revenue contributed by millionaires in 2022.
31 percent
— The decline in New York's share of the nation's millionaires between 2010 and 2022.
$10.7 billion
— Additional State personal income tax revenue that would have been collected in 2022 if New York had maintained its 2010 share of millionaires.
$2.5 billion
— Additional City personal income tax revenue that would have been collected in 2022 if New York had maintained its 2010 share of millionaires.
14.776 percent
— The top marginal personal income tax rate for New York City residents earning over $25 million annually.
8.7 percent
— New York's share of the nation's millionaires in 2022, down from 12.7 percent in 2010.
NY1 “We have, with the tax increase of last year, the highest top marginal personal income tax in the country, and the highest corporate franchise tax in the country. And we were losing millionaires before the SALT cap. How big a threat are high taxes?” said Andrew Rein of the…
At this time last year, New York State estimated that tax receipts would fall short of pre-pandemic estimates by $15 billion annually on average, totaling $60 billion over four years. Receipts, however, have been much stronger than expected. By April 2021, the State reduced its four-year tax receipt shortfall estimate by 80 percent, to $11.8 billion. Over the four-year period, the State also will receive at least $21.1 billion of targeted and general federal fiscal…
Managing the City’s fiscal crisis well will be a critically important duty of the next Mayor and a primary determinant of how the city survives the current crisis, and ultimately thrives in the future. Managing NYC’s Fiscal Crisis: A CBC Mayoral Candidate Forum featured a 10-minute conversation with each candidate,…
New York State can balance its budget without raising personal income taxes by utilizing updated revenue projections and federal aid, rather than relying on additional surcharges on high-income earners. Increasing taxes on the wealthy risks driving away top earners, who currently contribute a significant portion of the state's operating funds.
Recommendations related to Millionaire’s Tax
New York State should balance its budget without increasing personal income taxes or delaying the middle class tax cut.
The State should eliminate unproductive economic development spending as an alternative to tax increases.
The State should appropriately finance capital investment to help balance the budget.
The State should target education aid to low wealth school districts to improve fiscal footing.
The State should use federal aid wisely combined with actions to restructure State spending to improve long-term fiscal health.
Key Data
$6 billion
— The amount of additional federal aid characterized as the 'worst case' scenario for the state budget.
$1.6 billion
— The annual increase in tax receipt projections that offsets the cumulative value of proposed income tax changes.
20 percent
— The portion of the State Operating Funds budget financed by the top 1 percent of earners through income taxes.
New York State's proposed budget includes a temporary personal income tax surcharge on high-income earners to close budget gaps, but this risks driving away wealthy residents who contribute significantly to state revenue. Instead of raising taxes, the state could balance the budget by reducing economic development spending and shifting capital financing to long-term debt.
Recommendations related to Millionaire’s Tax
The State should reduce its planned capital disbursements by 10 percent and finance up to 50 percent of the remaining paygo capital spending with debt to offset the receipts from the high-income personal income tax surcharge.
The State should implement a 50 percent reduction in proposed economic development capital spending and finance 50 percent of the remaining paygo spending with debt to offset the receipts from the high-income personal income tax surcharge.
The State should focus its capital investments on the most critical projects to avoid adding to already high outstanding debt levels while balancing the budget.
The State should smooth year-to-year fluctuations in school aid to avoid a sudden drop-off in funding.
The State should focus its distribution approach on directing aid to high need districts and reducing aid to wealthier districts.
Key Data
20%
— The top 1 percent of income taxpayers finance approximately 20 percent of the State Operating Funds budget through income taxes.
$1.2 Million
— Taxpayers with taxable income more than $10 million have an average personal income tax liability of approximately $1.2 million.
14.7%
— New York’s combined top marginal rate is 14.7 percent, which is the highest in the nation.
$1.5 Billion
— The proposed personal income tax high-income surcharge would generate an estimated $1.5 billion in tax revenue in fiscal year 2022.
0.5%
— The proposed surcharge would be imposed at 0.5 percent beginning with filers with taxable incomes of $5 million.
New York State and City face significant fiscal gaps, yet increasing taxes on high-income earners risks further out-migration and reduced competitiveness, as the state's share of millionaires has already declined by 15% since 2010. With nearly 40% of personal income tax revenues derived from millionaires, policymakers are urged to prioritize expenditure control and federal aid over tax hikes to maintain fiscal stability.
Recommendations related to Millionaire’s Tax
Improving the fiscal outlook for both the State and the City primarily requires controlling expenditures and advocating for federal aid.
Any consideration of tax increases should include the impact on State and local economic competitiveness.
As New York’s leaders look to close budget gaps, they must be cognizant that combined State and City PIT rates are the second highest in the nation, while combined CFT rates are the highest.
Key Data
12.696%
— The top personal income tax rate imposed in New York City, which is the second highest in the country.
40%
— The share of personal income tax revenues coming from millionaires, highlighting the state and city's dependence on this group of taxpayers.
15%
— The decrease in New York's share of the nation's millionaires between 2010 and 2017.
$1.4 billion
— The amount of additional tax revenue that could have been generated if New York's share of national millionaire capital gains had remained at 2010 levels.
New York faces a significant fiscal imbalance driven by rising spending, and the state should focus on restraining costs rather than raising taxes on high-income earners. Increasing taxes would threaten the state's competitiveness and reduce its ability to manage future economic downturns.
Recommendations related to Millionaire’s Tax
The State should hold the line on the State’s already high tax burden, as increasing taxes now would be counterproductive.
The State should avoid enacting additional tax increases now, as retention of the PIT surcharge and other recently enacted taxes already narrow options to balance the budget soundly in future recessions.
The State should focus on identifying recurring savings to bring spending in line with revenues, rather than increasing taxes, which would make New York even more expensive for residents and business.
Key Data
$19.3 billion
— Taxpayers with incomes greater than $1 million have a personal income tax liability of approximately $19.3 billion.
1 of every 5 dollars
— One of every 5 dollars spent for state operating purposes comes from taxpayers earning more than $1 million annually.
$35 billion
— The revenue shortfall from a recession could add a whopping $35 billion to the gaps the State identified.
8.82 percent
— New York State’s top marginal personal income tax (PIT) rate is 8.82 percent, the sixth highest in the nation.
12.7 percent
— The top rate for New York City residents is an even higher 12.7 percent with City PIT.
Spectrum News NY1 NY1 looked at education, congestion pricing and criminal justice and taxes and the proposal for five year extension of the millionaire's tax, CBC President Andrew Rein joined to help unpack the proposed budget.
The New York State Executive Budget for Fiscal Year 2020 extends the 8.82 percent top marginal tax rate on high-income earners for five years, a policy that increases reliance on a small group of taxpayers and makes state revenues more susceptible to economic downturns. This extension supports increased spending on Medicaid and education rather than prioritizing spending restraint or building necessary fiscal reserves.
Recommendations related to Millionaire’s Tax
The State should exercise greater spending restraint instead of extending the 8.82 percent top marginal tax rate on high-income earners.
The State should avoid making personal income tax revenues more susceptible to economic downturns by not extending the higher tax rates on high earners.
Key Data
0.6 percent
— of filers generate 40 percent of State personal income tax revenues.
40 percent
— of State personal income tax revenues are generated by 0.6 percent of filers.
8.82 percent
— top marginal tax rate on high-income earners extended for five years.
New York's proposed extension of the Personal Income Tax surcharge on individuals earning over $1 million should be re-evaluated to consider a lower top rate than the current 8.82%. Additionally, any extension of this tax should include a requirement to revisit the policy if significant federal tax changes occur.
Recommendations related to Millionaire’s Tax
Before extending the current rate, serious consideration should be given to the financial feasibility of imposing a top rate below 8.82%.
The extension of the surcharge should include a requirement to revisit the tax if substantial federal changes are adopted.
Key Data
8.82%
— The current top Personal Income Tax rate in New York State.
$1 million
— The income threshold for taxpayers subject to the Personal Income Tax surcharge.
six
— The number of states outside of New York City that impose Personal Income Tax rates higher than New York State.
On February 22, 2017, New York State Budget Director Robert Mujica presented highlights from the New York State Executive Budget for Fiscal Year 2018 to the Citizens Budget Commission.
The state is transitioning the temporary “Millionaires Tax” surcharge into a permanent revenue source to fund recurring expenses. Rather than making this surcharge permanent, the state should restructure existing tax brackets and reserve the surcharge option for future economic downturns.
Recommendations related to Millionaire’s Tax
Consideration should be given to restructuring the standing tax brackets instead of making the temporary surcharge permanent.
The state should reserve for future economic downturns the option of a temporary surcharge rather than using it to sustain recurring spending.
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