New York Mayor Zohran Mamdani ran for office promising to raise taxes on the rich to pay for new social welfare programs. Now he is backing Gov. Kathy Hochul\u2019s proposal to levy a new tax on expensive second homes.<\/p>\n
Manhattan \u201cmay have more billionaire residents per square foot\u201d than just about anywhere in the world, said New York\u2019s ABC 7<\/a>. But many of the \u201cluxury, multi-million dollar apartments\u201d in the city are second homes. Hochul\u2019s proposed \u201cpied-\u00e0-terre\u201d tax<\/a> would apply to more than 13,000 such residences worth more than $5 million. Those locations are owned by the \u201csuper wealthy\u201d to \u201cstore their wealth to benefit from New York City\u2019s real estate<\/a> market,\u201d Mamdani said in a statement. Critics say the proposed tax will hurt the city\u2019s construction and real estate industries.<\/p>\n <\/p>\n The proposal comes as blue states are looking to raise taxes on wealthy residents. Golden State voters are contemplating a \u201cone-time, 5% \u2018wealth\u2019 tax on roughly 200 California billionaires,\u201d said USA Today<\/a>. And the Maine Legislature this month passed a \u201cmillionaire tax\u201d on the Pine Tree State\u2019s wealthiest residents, said Maine Morning Star<\/a>. Getting the highest earners to \u201cpay just a small percentage more\u201d will help solve the state\u2019s revenue problems, Democratic State Rep. Drew Gattine told the publication. But there is a backlash.<\/p>\n Article continues below <\/p>\n You may like<\/p>\n The Week<\/p>\n Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.<\/p>\n <\/p>\n \nSUBSCRIBE & SAVE\n<\/p>\n <\/a><\/p>\n Sign up for The Week’s Free Newsletters<\/p>\n From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.<\/p>\n From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.<\/p>\n <\/p>\n New York\u2019s business community believed that the moderate Hochul \u201cwould surely stand in the way\u201d of Mamdani\u2019s tax-the-rich ideas, Crain\u2019s New York Business<\/a> said in an editorial. And Hochul is \u201cadamantly opposed to the broader tax hikes Mamdani continues to champion\u201d to close the city\u2019s budget gap. But her backing of the second-home tax \u201cmoved the needle significantly to the left.\u201d A similar proposal in 2019 failed after getting \u201cscorched-earth opposition\u201d from New York\u2019s real estate sector. Broader tax reform would be more beneficial, but it is easier to sell voters on taxing \u201cforeign oligarchs who spend two weeks of the year in a luxury Billionaires Row penthouse.\u201d<\/p>\n If the concern is that taxing the rich will drive out wealthy New Yorkers, the second-home tax \u201cthreads that needle by targeting people who are, by definition, not full-time New Yorkers,\u201d The New York Daily News<\/a> said in an editorial. The people who buy second homes in the city do so because it is a \u201cglobal hub of business and culture\u201d and can \u201chappily\u201d pay the tax. They already \u201cenjoy and benefit from the enormous services and amenities that the city offers,\u201d so they can \u201cpay a little bit more on their assets\u201d to contribute to that vitality.<\/p>\n What next?<\/p>\n One notable second-home owner is loudly criticizing the proposed tax, said The Hill<\/a>. \u201cMayor Mamdani is DESTROYING New York!,\u201d President Donald Trump<\/a>, a Florida resident who owns a residence at New York City\u2019s Trump Tower, said on Truth Social. Mamadani and Trump had previously found \u201ccommon ground on the issue of affordability.\u201d That ground may be lost. \u201cThe TAX, TAX, TAX Policies are SO WRONG,\u201d Trump said.<\/p>\n