NY’s poor showing on wealth

The Empire State is trailing the nation in gaining new millionaires, a new report has found.

The number of US households with earnings of $1 million or more grew by 55.3 percent, from 282,311 in 2010 to 438,370 in 2015, according to a tax-data analysis released on Monday by the Empire Center for Public Policy.

But New York’s number of millionaires grew only 40 percent during that time, from 35,802 to 50,080, said the center’s research director, E.J. McMahon.

Although New York accounts for 11.4 percent of the nation’s millionaires, the study shows the number of millionaire households grew at a slower rate here than in other states.

“These trends bear watching because they are indicators of overall economic growth and wealth creation and because New York’s state budget is heavily dependent on revenues generated by its highest-earning taxpayers,” McMahon said.

The state imposes a millionaires’ tax — a 29 percent surcharge on incomes of $1 million or more.

Gov. Cuomo’s administration disputed the findings.

“New York’s economy is growing,” said Morris Peters, spokesman for the state Division of the Budget. “We have more millionaires per capita than all but one state, and we’ve also added more millionaires since the recession than any state but one.”

‘If you want less of something, tax it”: That rule may help explain why New York has grown millionaires slower than the rest of America. On Monday, the Empire Center’s E.J. McMahon reported that the number of New Yorkers earning $1 million or more grew by just 40 percent from 2010 to 2015, far slower than the nation’s 55.3 percent rate.

He also notes that New York slaps millionaires with a 29 percent income-tax surcharge, pushing its top tax rate to 12.7 percent in the city. Passed in 2009, it was sold as a temporary step after the financial collapse, but Gov. Cuomo keeps renewing it.

Turns out states with lower rates, or no income tax at all, saw the number of their millionaires grow faster than not only New York but the nation as a whole. Among the 10 with the most seven-figure earners, California’s millionaire class grew 72.2 percent; Florida’s, 69 percent; Texas’, 58.3 percent; and Massachusetts’, 57.3 percent.

Notably, Florida and Texas have no in- come tax, and Massachusetts’ rate is a flat 5.1 percent. To be fair, California actually charges a bit more than New York, but it still does extremely well, thanks to the explosive growth of top earners in Silicon Valley.

More than bragging rights are at stake: As McMahon notes, the trend bears watching because it reflects economic growth — and because the Empire State depends “heavily” on its top earners for its tax intake.

He’s also noted that New York’s personalincome tax accounts for two-thirds of the state’s tax revenue, and 40 percent of that comes from the top 1 percent of earners.

Meanwhile, ever more of New York’s top taxpayers don’t even live here: 59 percent of $10 million-plus filers are non-residents.

Even Cuomo sees a link between taxes and where one lives: “People will take a certain amount of abuse, and then there is a point,” he has said. That point is unknown, but “you don’t want to reach” it.

Oops: When it comes to top earners, it looks like New York is already there.