Wealthy New Yorkers who fled in 2020 took $21B in income with them: IRS

Wealthy New Yorkers who fled in 2020 took $21B in income with them: IRS

Around 300,000 of New York City’s wealthiest residents who fled during the early days of the coronavirus pandemic two years ago collectively earned $21 billion in total income in 2019, according to new data released by the Internal Revenue Service.

The sum, which was gleaned from IRS tax filings that were received in 2020 and 2021 represents the largest flight of capital from the Big Apple ever recorded.

According to the New York Times, which first reported on the $21 billion sum, it is double the average of those who had left New York over the previous decade. According to the IRS, 21,000 New Yorkers relocated to Florida in 2020 — nearly double the average annual net loss from before the pandemic.

Large financial firms set up offices in the Sunshine State, attracting a large number of professionals from the city. According to the IRS, Manhattan transplants living in Palm Beach County earned an average income of $728,351.

Data also shows that city dwellers moved out to the suburbs of Long Island, Westchester, New Jersey, and Connecticut. Others opted for more open spaces in states like Hawaii, Colorado, Utah, and Wyoming.

The ramifications of the flight of wealth could be enormous since New York City and the state rely on a progressive income tax system whereby the top earners pay a higher share of taxes which are then used to fund vital public services like schools, mass transit, police, and the fire department.

According to financial data, the top 1% of earners in New York City make in excess of $804,000 per year. In 2019, their personal income taxes accounted for 41% of the total income tax levied by the city.

The Times reported that of all those New Yorkers who left the city in 2020, a third moved from Manhattan. The departing Manhattanites earned an average income of $214,300.

City residents who moved out of state earned 24% more than those who moved the previous year, the largest income gap in at least a decade, according to the report.

The data corresponds to Census Bureau statistics which show that between April 2020 and June 2021, around 337,000 people emigrated from the city — more than three times the number of transplants who leave in a typical year.

The number of foreign migrants — a key source of growth for the city — dropped to around 25% of pre-pandemic figures.

The city’s population also took a massive hit as tens of thousands died from the contagion — around 17,000 more than in a normal year.

City officials are optimistic that the worst is behind us and that migration patterns have returned to pre-pandemic levels. They cite soaring rents and change-of-address figures suggesting that people are returning.

But demographers cannot predict when they expect the city to completely replace the population that was lost during the early days of the pandemic.

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