City Tax Hikes Erode State Revenue

Local tax increases that raise costs for residents and businesses can reduce the broader state tax base by depressing gross state product, encouraging outmigration of high‑income filers, and shifting corporate and employer offices across borders. Empirical estimates (here: a $7 billion NYC hike) can be translated into GSP and tax‑receipt projections to show that a city benefit may produce net statewide fiscal harm. — This reframes municipal tax debates as statewide fiscal policy questions and highlights migration and elasticity evidence as essential inputs for state legislators deciding whether to authorize local tax changes.