Millionaires are leaving New York: there are several reasons why

For a long time, if we thought of millionaires in the United States, we thought of New York and Los Angeles - areas that concentrated the country's great wealth, due to their proximity to Wall Street and Silicon Valley. But all that is changing.

In recent years, the two big cities have experienced an unprecedented flight of millionaires, moving their personal and tax domiciles to states such as Florida, Arizona and Texas with a more lax tax system for their large fortunes.

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Taxes are one of the main reasons why many millionaires have fled New York and Los Angeles, and you don't have to go far to find two well-known and recognisable examples.

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Elon Musk has decided to change the tax domicile of SpaceX and Neuralink from Delaware to Texas, while Jeff Bezos did the same by moving from Seattle to Miami, where in the first quarter of 2024 alone he would have already saved $300 million, according to Fortune.

The problem for NY and LA is that this millionaire diaspora has been going on for years, as the consulting firm Henley & Partners reports in its 'Wealth USA 2024 Report', in which it analyses data from the last decade, noting that 122,000 luxury moves have been recorded.

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These figures have gone from 51,000 millionaires packing their bags from the major economic hubs to 122,000 expected to be reached by 2024.

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The Tax Foundation endorses this trend in its 'January 2024 Report', noting that 14 of the 18 states with per capita tax burdens above the national average had recorded out-migration.

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Obviously, it is not only taxes that have influenced this massive exodus of wealth. The increase in the crime rate and some political decisions have also played a key role in this situation, as stated in the report.

Another key element in the flight of large fortunes is the increase in the price of land for development, which reduces the profitability of investments, making more distant cities more attractive investment proposals.

Basically, swapping New York or California for other states allows wealthy individuals to acquire cheaper and, at the same time, larger properties.

This explains why, according to the Tax Foundation, New York's population loss is 1.1%, California's 0.9% and Hawaii's 0.8%. On the other hand, South Carolina has increased its population by 1.6%, Delaware by 1% and Florida by 0.9%.

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And when we talk about moving, we are not talking about hundreds or thousands of kilometres but, in some cases, just 50 kilometres are enough to change your life and your state.

In the case of New York, some have opted to move to Greenwich or Darien, which are only half an hour's drive away in the state of Connecticut. This millionaire diaspora has caused Darien's population to increase by 84% in the last decade, according to the Tax Foundation.

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And it is not the only case. Palm Beach has boosted its population of millionaires by 93%, while Austin, where Elon Musk has moved, has done so by 110%. It's all about money, money and more money.

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