Rich New Yorkers' incomes have soared, but it means more wealth to tax

New York City's rich are getting richer off their investments. NYC's income gap widened from 2019 to 2024, even as wages for the lowest earners grew. NYC's top earners saw their assets, the biggest chunk of their incomes, grow. It's a catch-22 for politicians, since ultrawealthy New Yorkers pay nearly half of all income tax. The Big Apple is getting more unequal: A new report from New York City Comptroller Mark Levine found that income inequality worsened in the city from 2019 to 2024. That's not entirely unexpected. The country's financial capital has long had a wealth gap between its Wall Street bigwigs and everyday workers, and over the past few years, millionaires have flocked back into the city, as lower earners have migrated out. But the New York metro area's lowest earners haven't taken a pay cut: Wage and salary inequality only very slightly increased during that same period, part of a national trend. Pay grew the fastest for traditionally lower-wage positions — like food preparation and healthcare support — while higher-paying professions like management and legal didn't see as robust growth. Even so, the rich are still getting richer faster. In 2024, over 60% of the city's total income went to the top 10% of earners, and the top 1% alone got 37% of all income in the city. And, from 2019 to 2024, inequality has been widening — real income has fallen during that time for the bottom 90%, while it's grown 16.2% for the top 1% of earners. The income unevenness stems from how different New Yorkers earn their income. Lower-paid workers traditionally rely on their weekly salaries as a main source of income. Higher-income residents saw their incomes grow because they came from non-wage sources — things like rental income, businesses they own, and gains from financial investments. In 2024, the top 10% made over 50% of their income from those sources. That's increasingly been the case nationwide, and part of why many left-leaning politicians are calling to tax the rich: Everyday workers pay income taxes on their salaries, which make up the bulk of their incomes, but the non-wage assets keeping higher-earners afloat are often federally taxed at preferential rates. In New York, though, that income growth among the highest earners is a key part of the tax base — and has become a target for lawmakers. Already, around 46% of all income tax in the city is paid by the top 1% — meaning that those higher-earners are crucial to funding city services. It's part of a catch-22 that policymakers like Mayor Zohran Mamdani are navigating. After all, the first substantive move on taxes from the city and state was a pied-à-terre tax, specifically targeted at higher earners who own property in the city, but don't pay taxes there. Read the original article on Business Insider

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