NCPA - National Center for Policy Analysis

ESCAPE FROM NEW YORK

October 28, 2009

A new study by the Empire Center for New York State Policy that shows middle-class people leaving the state in droves is one more piece of evidence that proves taxes have an effect on behavior, according to the Wall Street Journal.

According to the study's authors, E.J. McMahon and Wendell Cox:

  • 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 percent 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 percent higher than the $72,726 earned by those coming in.

Other findings:

  • 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 near $30 billion.

Although McMahon and Cox suggest that no single reason can explain a million migrants seeking their fortunes across state lines, the Journal says blame should be placed on 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 percent and 12 percent 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.

Source: Editorial, "Escape From New York," Wall Street Journal, October 28, 2009; based upon: Wendell Cox and E.J. McMahon, "Empire State Exodus: The Mass Migration of New Yorkers to Other States," Empire Center for New York State Policy, October 27, 2009.

For text:

http://online.wsj.com/article/SB10001424052748703574604574499772371161800.html 

For study:

http://www.empirecenter.org/pb/2009/10/empirestateexodus102709.cfm 

 

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