NEW YORK, NY— Mayor Zohran Mamdani is proposing a revised tax plan that would raise about $1.75 billion annually through higher corporate taxes and changes to business tax credits, according to proposals circulated to state lawmakers.
The plan represents a shift from the broader statewide corporate tax increase Mamdani supported during his campaign, which he estimated could raise about $5 billion each year.
Under the proposal, the city’s corporate tax rate would increase from 9 percent to 10.8 percent for financial firms and from 8.85 percent to 10.62 percent for other corporations operating in New York City.
The plan would also raise the city’s unincorporated business tax from 4 percent to 4.4 percent for business income exceeding $5 million.
Mamdani is also seeking to reduce the city’s Pass-Through Entity Tax credit from 100 percent to 75 percent. The credit currently allows some business owners, including partners in hedge funds and law firms, to offset personal income taxes with business tax payments. City officials estimate the change would generate about $700 million annually.
The mayor is continuing to push a separate proposal to increase the city’s personal income tax rate for residents earning more than $1 million. The rate would rise from 3.88 percent to 5.88 percent, which the mayor’s office estimates would generate about $3 billion each year.
Other proposals target high-value real estate, including a 1 percent property tax surcharge on homes valued at more than $5 million, a higher mansion tax on luxury property sales and a 1 percent tax on cash-only real estate transactions above $1 million.
The mayor’s office is also supporting a proposal to eliminate a sales tax exemption on gold bars and other precious metals, a move city officials estimate would generate about $300 million annually for New York City.
Mamdani’s aides say the narrower proposals are intended to improve the chances of approval in Albany as they seek support from Gov. Kathy Hochul and legislative leaders.
The mayor has argued that the tax increases and other funding changes are necessary to address a projected $5.4 billion budget deficit over the next two years.
Without additional revenue or state support, Mamdani has warned the city could be forced to raise property taxes by about 9.5 percent to close the gap. City Council leaders, who would need to approve such a measure, have said they oppose that option.
The state budget deadline is April 1. Hochul has ruled out raising income taxes statewide but has indicated she may consider a corporate tax increase.