New York City, the financial capital of the United States, is home to 8.5 million people. It boasts the largest city budget of any city in the country, at $112.4 billion in 2024. As results became official on July 1, Zohran Mamdani, a self-described “democratic socialist”, had won the Democratic primary, with one goal—to increase the state budget as much as possible.
Zohran Kwame Mamdani is a member of the state assembly, representing the Queens area. He is known to have affiliations with the Democratic Socialists of America, with his electoral platform representing an unprecedented far-left vision for New York City. Some of his policy positions include rent controls on apartments, free buses, and city-owned grocery stores, amongst other economic fantasies.
However, his worst proposals all come on the issues of taxes.
Zohran’s campaign website, which lists his tax plan, has two headline proposals: to raise taxes “on the wealthy”, and to raise taxes on corporations in the city. His overarching goal is to collect $10 billion in tax revenue to finance. If enacted, his proposals would be sure to make New York City a hostile environment for business and will be sure to have distortionary effects on employers in the region as well as across the country.
His other policies from the previously mentioned $10 billion tax hike include the following:
- A tax of 2 percent on all incomes over $1 million.
- Lobbying the state government to raise the corporate tax rate from 7.25 percent to 11.5 percent.
- Hiring 50 additional tax auditors.
- Raising property taxes on “richer and whiter neighborhoods” to increase tax revenue.
Whilst New York City currently has a flat tax of 3.9% on all earners (on top of New York state tax, with a top marginal rate of 10.9%), Zohran wishes to create a new tax bracket. He plans to tax all earners above $1 million at a marginal rate of 2%, a tax which is estimated to cost $4 billion. His website, which uses the phrase “lower is not always better” in regard to tax rates, is an open proclamation that if elected, he will raise income tax rates to the point of exhaustion.
New York City does not need to repeat an experiment that has failed in other parts of the country. Massachusetts, which instituted a 4% tax on income earners above $1 million in 2022, saw a fall in its ranking for their state business tax climate. The tax also saw people leave the state at the highest rate in 30 years—something which may happen to New York City should Mamdani be elected in November.
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Author: Rohan Naval
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