A Fiscal Policy Institute analysis of IRS data found millionaire numbers have grown since 2020 in high-tax states, including New York and California. New York’s millionaire share also rose in 2023, the latest data year, despite a tax increase on incomes over $1 million.
California, Connecticut, Massachusetts, New Jersey and New York, as well as Washington, D.C., had the highest millionaire concentrations and saw millionaire numbers grow since 2020, according to the institute. In New York, 57,126 people earned $1 million a year in 2016 and 68,068 in 2019; the figure reached 84,366 in 2021, when the state raised rates on incomes over $1 million, and was up 21%. Millionaire departures fell. FPI director Emily Eisner said state rates were not high enough to concern millionaire households; Cato’s Adam Michel said those who leave are often less tied to a state.
A Cato Institute briefing paper published Sept. 15 said states that switched from graduated taxes to flat taxes—a single rate regardless of income—recorded roughly one percentage point faster growth in per-capita income and state GDP four years after reform, amounting to nearly $4,000 more income per resident, according to the paper. It also said Colorado, the first state to adopt a flat tax in 1987, had per-capita income about 5% higher a decade later.
