Queens Assemblyman Zohran Mamdani has attracted attention in the Democratic primary for New York City mayor with his ambitious proposal to expand city government and social services.
His platform includes free child care, increased public housing, and eliminating bus fares and tuition at the City University of New York (CUNY).
While it sounds appealing, Mamdani’s promises come at a cost, with his campaign asserting that all these initiatives could be funded by generating $10 billion in new revenue—less than 10% of the city’s current budget.
However, many experts believe that his estimates are overly optimistic and do not reflect the true financial implications of his agenda.
A significant portion of Mamdani’s proposals hinges on increasing taxes for corporations and high-income earners, which he estimates would bring in approximately $9 billion.
Yet, he lacks the authority to enact these tax increases independently, as such measures would require the approval of the governor and state lawmakers.
If elected, Mamdani would need the cooperation of Governor Kathy Hochul and state legislators to actualize his tax plans, but this fundamental requirement poses a significant barrier to his ambitious agenda.
Historically, New York City has not been permitted to set its own income tax rates for both individuals and businesses due to past financial instability, and this regulation prevents Mamdani from implementing his proposals unilaterally.
Despite his familiarity with tax structures, Mamdani’s understanding appears limited.
He often contrasts New York’s corporate tax rate of 7.25% with New Jersey’s higher rate of 11.5%, asserting a desire to match New Jersey’s corporate tax structure.
However, many of New York City’s largest firms already incur a tax burden that exceeds what they would face under New Jersey’s regime.
Businesses in New York City pay the Business Corporation Tax, which ranges from 6.5% for small businesses to 9% for larger firms, plus the state Corporation Franchise Tax and an additional surcharge to support the metropolitan transit authority.
This leads to an effective corporate tax rate exceeding 17.4% for businesses operating in the city.
Thus, merely “matching” New Jersey’s rate would result in a tax cut for many city businesses.
Should Albany entertain Mamdani’s proposed $5 billion tax increase, it could potentially elevate the corporate tax burden to an unprecedented 22%, yet this revenue would remain under Albany’s control.
Mamdani would then face the difficult task of persuading state lawmakers to allocate these funds to his initiatives, a challenge that could prove insurmountable.
Additionally, the economic landscape raises concerns regarding job retention and corporate relocations.
Comparatively, states like North Carolina are reducing their corporate tax rates to attract businesses, putting New York at a disadvantage in a competitive business environment.
While Mamdani’s rhetoric appeals to some for its focus on taxing the rich, these policies fail to consider the changing dynamics of remote work and the mobility of high-income individuals.
His second major tax proposal involves imposing an additional 2% income tax on city residents earning over $1 million.
This initiative would come on top of existing federal and state taxes, posing potential repercussions for wealth retention in the city.
Research indicates that wealthy individuals often alter their living arrangements to minimize exposure to high taxes, which could amplify under Mamdani’s plan.
For example, a couple earning $1 million would have the incentive to leave the city for a neighboring county like Westchester or Nassau, where they could save more than $53,000 in taxes—an increase from the current savings of $35,000.
This financial incentive presents a conundrum for Mamdani and his supporters who may not fully grasp the complexities of tax policy and its potential consequences on city revenue.
As he positions himself for a potential victory with a platform rooted in social change, new fiscal realities could present significant obstacles to his agenda.
Mamdani’s supporters may soon realize that the fiscal issues they overlook could impose challenges that require much more than simply a progressive pledge to fund ambitious social programs.
image source from：https://nypost.com/2025/06/08/opinion/soaking-the-rich-as-mamdani-and-other-lefties-want-wont-pay-for-a-supersized-nyc-govt/
