In 2024, a report by a London-based migration consultancy confirmed what many already saw as a self-evident truth: the wealthy will flee any jurisdiction that raises their taxes.
This narrative caught on like wildfire. One analysis found there were 10,900 stories based on the report, despite journalists and researchers showing that its methods were hopelessly flawed and its results being directly contradicted by more systematic research from the London School of Economics. Coverage of the report could even impact the UK’s Labour government’s decision whether or not to pursue a wealth tax of 2% on assets over £10 million, despite broad popular support for such a measure.
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As the newly-inaugurated Zohran Mamdani tries to execute his agenda as mayor of New York City, his proposed 2% surcharge on income above $1 million may trigger a familiar cycle: the tax-and-flee story spreads, and a plausible policy idea is recast as economically suicidal.
Despite multiple debunkings, the “millionaire exodus” panic remains a popular narrative, frequently based on biased or sloppy arguments where anecdote replaces systematic evidence, correlation poses as causation, and every modest redistributive proposal is framed as an existential threat to prosperity. To develop a reasonable position on any proposed tax increase on the wealthy, we need to dispel these recurring fallacies and raise the quality of the debate.
Overreliance on anecdotes
Anecdotes are irresistible to editors and readers alike: they’re juicy, specific, and often involve famous people saying quotable, dramatic things. But there’s something important they are not: a representative sample. They’re a handful of memorable data points selected precisely because they’re memorable. Billionaire John Catsimatidis, owner of Manhattan-based grocery store chains Gristedes and D’Agostino, told The Free Press in June that if Mamdani won, he would “consider closing our supermarkets and selling the business.”
Discussion should not focus on whether one billionaire makes a threat, but on what the data show across years, across the tax base, and after real policy changes. According to the data analysis firm Altrata, there were over 33,000 New Yorkers worth $30 million or more as of 2025. Quoting some famous ones on either side of the issue makes for a good headline—but bad reasoning. We should look instead to systematic studies, like this one by the Fiscal Policy Institute, which found no significant out-migration by residents of New York State in response to tax increases in either 2017 or 2021; the latter increase is estimated to raise approximately $3.6 billion annually.
Overestimating the mobility of the rich
A premise at the heart of the “tax the rich and they’ll leave” story is that high earners are hyper-mobile—ready to uproot their lives over a few percentage points. Rigorous academic research that examined 45 million U.S. tax filings with over $1 million in income suggests the opposite: affluent households are sticky. Family ties, children’s schools, business networks, cultural amenities, and sheer inertia often matter more than cable-news tax talking points.
Of course, there will be exceptions, and many of them will be eager to speak to the media. Catsimatidis could indeed flee now that Mamdani is in power.
And ultimately, what matters more than one loud billionaire’s decision is the net migration of millionaires. And many millionaires actively choose to live in New York. Why? Because it is still an attractive place for the wealthy.
What’s more, the process of claiming residency in a new state to avoid taxes can be arduous as state tax auditors scrutinize and frequently challenge changes of filing status for wealthy taxpayers.
Confusing correlation and causation
A staple of the arguments against Mamdani’s proposal is a graph from the Citizens Budget Commission showing New York’s “shrinking share” of the nation’s millionaires—down from 12.7% in 2010 to 8.7% in 2022—as evidence that New Yorkers are fleeing high taxes.
But a declining share can happen even if few people leave. If other states mint new millionaires faster—through a tech boom (in California), an energy boom (in Texas), or real-estate inflation (in Florida)—New York’s slice shrinks regardless of migration. If we can’t distinguish who left from who got richer elsewhere, we can’t honestly evaluate the effect of a tax on moving.
To make a reasonable inference about a tax change causing the rich to move, it’s necessary to compare migration rates between the wealthy and those below the tax threshold before and after a tax change, while holding other variables constant. Using this type of design, scholars found little migration response among millionaires after New Jersey raised top tax rates, which generated substantial revenue. Similarly, the Fiscal Policy Institute study previously mentioned shows that in 2023, earners in the top 1% migrated out of New York less frequently than those in all other income groups.
Some well-designed studies do show out-migration of high earners in California in response to tax hikes. This does not disprove the studies on New York or New Jersey that showed the opposite, just as these do not prove that the phenomenon in California must be a mirage. A deeper fallacy is the tendency to prematurely infer universal laws invariant across space and time. A tax hike may not trigger moves in one state and might in another—and neither result predicts what a different increase elsewhere will do.
Further, even if a state does lose a net number of millionaires, that does not guarantee a net decrease in the total tax base, the size of which depends on the relative wealth and numbers of those who stay and leave.
To make informed decisions, specific details matter: the age of the wealthy, the sources of their wealth, their marital status, the weather of the places they’re considering moving, and so on.
The last time you moved to a new state or country, the decision was probably quite complex, not a mechanistic reaction to one specific event. In at least this respect, F. Scott Fitzgerald was wrong: the rich are like you and me.