Relocation
New York's Exit: Why People Are Leaving
By Marcus Webb · January 31, 2026
New York lost billions in taxable income in recent years as residents voted with their feet. Between punishing income taxes, the highest property tax burdens in the nation, and a cost of living that consumes most of what residents earn, the math no longer works for millions of New Yorkers.
New York City remains one of the most heavily taxed cities in the United States, and the outflow of residents has accelerated into 2026. The state lost an estimated $9.8 billion in adjusted gross income to out-migration in 2022 alone, trailing only California, and the structural problems driving that exit have not improved.
The Tax Burden Is Not Subtle
New York State's top marginal income tax rate sits at 10.9% for incomes above $25 million, but middle-class earners feel the weight too. Income above $161,550 (for single filers) is taxed at 6.85% at the state level. Add New York City's local income tax, which tops out near 3.876%, and a $100,000 salary in NYC yields roughly $67,000 to $68,000 after federal, state, and city taxes combined. That is before rent, groceries, or transit.
For comparison, a $100,000 earner in Texas pays zero state income tax and zero local income tax. The difference in take-home pay across a career is not marginal. It is life-altering.
New York also imposes an estate tax with a cliff provision that can tax the entire estate, not just the amount over the exemption, if the estate exceeds 105% of the $7.16 million threshold (as of late 2025, indexed for inflation). That cliff is a serious planning hazard for anyone building intergenerational wealth. See our full breakdown in Estate Tax by State: Where Your Heirs Pay Most.
Property Taxes Push Families Out
New York's effective property tax rates rank among the highest in the country. Nassau County on Long Island carries an effective rate around 2.1%. Westchester County has historically exceeded 2.3%. Even within New York City, the property tax structure, while nominally lower on rate, hits co-op and condo owners hard through assessed value calculations that bear little relationship to market reality.
The cruel irony is that many residents who leave New York City for Long Island or New Jersey, thinking they are escaping, land in places with comparable or worse property tax burdens. New Jersey's effective property tax rate is approximately 2.13% statewide, one of the highest in the nation. Moving from Brooklyn to Bergen County is not a tax escape. It is a lateral move.
Actual relief requires crossing further lines, into Florida, Texas, Tennessee, or the Carolinas.
Remote Work Made the Math Undeniable
Before 2020, the argument for staying in New York was anchored to proximity. Your job was there. Your industry was there. The social and professional networks that justified the cost were there.
Remote and hybrid work broke that calculus permanently. A software engineer earning $180,000 at a Manhattan firm who moves to Austin and works fully remote keeps an additional $15,000 to $18,000 annually in state and local taxes alone. Over a decade, that gap funds a house. The employer base has noticed too. Several major financial firms have expanded operations in Miami, Dallas, and Nashville, giving employees physical alternatives that make the tax arbitrage even easier to act on.
Companies leaving NYC is no longer a headline. It is a pattern. Goldman Sachs, Citadel, and others have made high-profile moves or expansions to lower-tax jurisdictions. When the employers follow the talent, the feedback loop accelerates.
Who Actually Stays, and Why
New York retains residents who are embedded in industries or institutions that cannot relocate, people in media, law, finance at the senior partnership level, healthcare systems, and academia. It also retains people who genuinely value what the city offers and accept the tax cost as the price of admission.
What it is losing fastest is the mobile middle. People in their 30s and 40s with growing families, who can work anywhere, who are buying their first home, and who look at a $12,000 annual property tax bill on a modest house in Westchester and choose differently. That demographic loss compounds over time because it strips the tax base of its most productive earners at their peak earning years.
Retirees face additional pressure. New York taxes Social Security income, pension income, and investment income at full state rates (with a modest $20,000 pension exclusion for those over 59). Florida taxes none of it. For anyone on a fixed income, that difference is not abstract. See how New York compares in our guide to States That Don't Tax Social Security and Best States for Retirees to Avoid Taxes.
Key Takeaways
- A $100,000 salary in New York City leaves roughly $67,000 to $68,000 after federal, state, and city taxes, compared to approximately $74,000 in a zero-income-tax state.
- New York lost an estimated $9.8 billion in adjusted gross income to out-migration in 2022, the second-highest total in the country after California.
- Westchester County property tax effective rates have historically exceeded 2.3%, making suburban escape within the state largely illusory.
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