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Richest New Yorkers Will Devastate City If They Leave With $133 Billion
An elite group of 38,700 people paid 42.5% of the city’s income tax collections, and the top 5% of residents earned more than the bottom 95%.
Before Covid-19 hit, New York City was home to many of the
richest people in the world, an elite group of 30,000 families earning at least
$1 million a year.
Gotham’s future will be decided by how many of these
super-wealthy people remain after the pandemic is over.
The top 1% of New Yorkers reported a combined $133.3 billion in income in 2018,
according to new data released last month by the city’s Independent Budget
Office. They paid $4.9 billion in local income taxes, making up 42.5% of
total income tax collected by the city.
Those numbers show how the decisions of a tiny number of
millionaires and billionaires could have huge fiscal consequences for a city of
more than 8 million people. In 2018, 1,786 tax filers earned more than $10
million or more.
The top 1% — about 38,700 taxpayers — earned almost as much
as the bottom 90% of New Yorkers. The top 5% earned more than the bottom 95%.
New York’s richest residents were quick to leave in March,
when the city became the center of a Covid-19 outbreak killing about 1 in 400
residents.
Since then, some New Yorkers have returned. Many
others have stayed away, with rents on city apartments falling as suburban home
prices rise. Wealthy people in the New York area tell advisers they’re thinking about permanent moves, especially
to Florida, which doesn’t have a state income tax.
In New York, the city levies its own income tax of as much
as 3.876% in addition to the state’s
top rate of 8.82%.
“I’m fielding calls from people who want to get out of New
York and New Jersey,” said Geoffrey Weinstein, a tax attorney at Cole Schotz.
“People are getting more comfortable with working remotely.”
The incomes of the top 1% have jumped since the last
recession. To join the richest 1% of New Yorkers in 2018, one needed an income
of over $811,663. That’s up from $493,400 in 2009 when the recession ended.
One factor still keeping many affluent families in New York
is its educational amenities, Weinstein said. “The number one issue is school,
for people who have children.”
Over the last decade, the number of ultra-rich children in the city has grown sharply,
the Independent Budget Office data show. In 2009, the year the recession ended,
tax filers earning at least $1 million listed 15,926 children. By 2018, 31,137
were listed — a 95.5% increase. Meanwhile, in households with incomes up to
$100,000, there was a 14.9% decline in the number of children. Among households
with incomes of up to $50,000, there was a 19.8% drop.
Overall, the number of kids
in the city as reported on tax returns peaked in 2012 and has fallen
consecutively since.
Expanding Families
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