The mayor of New York City has scrapped his plans to raise property taxes on expensive second homes after angering local millionaires and billionaires.
Zohran Mamdani had threatened to raise taxes on properties worth more than $5m (£3.7m), hitting 0.4pc of the city’s housing stock and raising $500m.
However, the socialist mayor’s executive budget will not include the tax raid, Bloomberg reported.
Mr Mamdani had vowed to go after New York City’s wealthiest, announcing the tax in a video filmed outside a $238m penthouse belonging to Ken Griffin, the Citadel founder.
Mr Griffin’s apartment is one of America’s most expensive, located on a stretch known as Billionaires’ Row. The video angered the hedge fund manager, who called the video “creepy and weird”.
Mr Mamdani had argued that people like Mr Griffin were able to have extremely valuable and often empty apartments around the city, which was the result of a “fundamentally unfair system that hurts working New Yorkers”.
His planned tax targeted “those who store their wealth in New York City real estate but don’t actually live here”.
The decision to scrap the tax rise came after Mr Mamdani and Kathy Hochul, the governor of New York, announced an extra $4bn to help close the city’s gaping budget deficit.
For months, Mr Mamdani has warned that New York’s fiscal situation is so dire that it poses a generational crisis rivalling the Great Recession, with a $5.4bn shortfall.
He had vowed to plug gaps in the budget by going after the ultra-wealthy and big corporations under the slogan “tax the rich”.
Unsurprisingly, this approach has brought him into conflict with the city’s most powerful residents. Mr Griffin said the campaign had triggered a “trauma”.
Backtracking on the plan is unlikely to go down well with Mr Mamdani’s supporters, who have elected the city’s youngest mayor amid widespread concern about the cost of living.
The 34-year-old won the mayoral race last November with little money behind his campaign and no institutional party support.
Mr Mamdani has faced intense opposition from billionaires and business leaders. Donald Trump had also accused him of “destroying New York” with his tax on second homes.
Mr Trump wrote on Truth Social last month: “Sadly, Mayor Mamdani is DESTROYING New York! It has no chance!”
He added: “People are fleeing. They must change their ways, AND FAST. History has proven, THIS ‘STUFF’ JUST DOESN’T WORK.”