New York State is famous for so many things; Niagara Falls, The Empire State Building, Erie Canal and Montauk Point just to name a few. But for many of us who live in the Empire State the most famous part of our home State is the oppressive tax burden.
A new study shows that from 2000 to 2008, New York experienced the nation’s largest loss of residents to other states—a net domestic migration outflow of over 1.5 million, or 8 percent of its population at the start of the decade. Households moving out of New York State had average incomes 13 percent higher than those moving into New York during the most recent year for which such data are available. In 2006-07 alone, the migration flow out of New York drained $4.3 billion in taxpayer income from the state:
Escape From New York
An old saying goes that the time to live in New York is when you’re young and poor, or old and rich—otherwise, you’re better off somewhere else. That wisdom is getting an update this week from a study by the Empire Center for New York State Policy that shows middle-class people leaving the state in droves.
Between 2000 and 2008, the Empire State had a net domestic outflow of more than 1.5 million, the biggest exodus of any state, with most hailing from New York City. The departures also have perilous budget consequences, since they tend to include residents who are better off than those arriving. Statewide, departing families have income levels 13% higher than those moving in, while in New York County (home of Manhattan) the differential was even more severe. Those moving elsewhere had an average income of $93,264, some 28% higher than the $72,726 earned by those coming in.
In 2006 alone, that swap meant the state lost $4.3 billion in taxpayer income. Add that up from 2001 through 2008, and it translates into annual net income losses somewhere near $30 billion. That trend is part of a larger march for New York: In 1950 the state accounted for 19% of all Americans, but by 2000 that number had fallen to 7%. The city’s main saving grace has been its welcome mat for foreign immigrants, who have helped to replace some of those who flee.
As the study’s authors, E.J. McMahon and Wendell Cox, suggest, no single reason can be fingered for a million migrants seeking their fortunes across state lines, but one place to start is New York’s notorious state and local tax burden. According to the Tax Foundation, between 1977 and 2008, New York has ranked first or second in the country for its state-local tax burden compared to the U.S. average.
In the years considered by the Empire Center study, New York’s state and local tax burden ranged between 11% and 12% of income. The peak year for taxes, 2004, was followed by the peak year for departures—as New York lost nearly 250,000 people to other states in 2005. And that’s before another big tax hike this year.
That pattern is consistent with the annual migration patterns, showing that highly taxed and economically lackluster states were most likely to end up in residents’ rear view mirrors. According to the annual study by United Van Lines, states like New York, New Jersey, Michigan and Illinois have been big losers in recent years.
In the Empire Center study, two of the top states to send taxpayers to New York—Illinois and Michigan—were also among the worst population losers overall. Greener pastures that drew New Yorkers included states like Florida, North Carolina and Pennsylvania, in addition to the usual suburban locales of New Jersey and Connecticut.
Liberals continue to insist that they can raise taxes ever higher without any effect on behavior, but the New York study is one more piece of evidence that this is a destructive illusion.
NY State is in an “uncontrollable loop.” Taxes are too high so some of its best tax payers have left the state causing a gap in revenues. To make up the gap they raise taxes and it continues. And its not a Democratic-only issue, for half the time NYS was run by a republican governor. Unless the state learns to put a check on spending, the States Collapse will make California’s economy look like child’s play.