{"id":217840,"date":"2026-05-02T19:29:09","date_gmt":"2026-05-02T19:29:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ny\/217840\/"},"modified":"2026-05-02T19:29:09","modified_gmt":"2026-05-02T19:29:09","slug":"do-higher-taxes-drive-the-rich-away-mamdanis-plan-revives-the-question","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ny\/217840\/","title":{"rendered":"Do Higher Taxes Drive the Rich Away? Mamdani\u2019s Plan Revives the Question."},"content":{"rendered":"

State lawmakers in New York are considering several proposals to tax the rich<\/a>, including a tax on luxury second homes and changes to a tax credit favored by the wealthy.<\/p>\n

Mayor Zohran Mamdani\u2019s preferred option \u2014 raising personal income taxes for millionaires \u2014 has support in the State Assembly and Senate<\/a>, and is backed by more than 60 percent of New York City voters<\/a>. But Gov. Kathy Hochul firmly opposes the idea.<\/p>\n

Whatever happens in this year\u2019s budget deal, Mr. Mamdani will most likely keep pushing to raise income taxes, in no small part because the success of his universal child care plan, his signature policy proposal, depends on it.<\/p>\n

The mayor\u2019s plan is simple: increase the city income tax rate by two percentage points for those who earn $1 million per year or more, from 3.88 percent to 5.88 percent \u2014 the equivalent of a 51 percent increase. Doing so could raise an additional $3 billion in revenue annually.<\/p>\n

A household that earns $1 million per year would pay $20,000 more in city taxes, while one earning $10 million per year would pay $200,000 more. The plan would affect about 34,000 households, a group that is small but important to the city budget.<\/p>\n

Mr. Mamdani, a democratic socialist, has argued that millionaires can afford to pay more to improve New Yorkers\u2019 quality of life. He said recently<\/a> that he was more concerned about struggling families leaving the city because they could not afford to stay than he was about the possibility that rich New Yorkers would depart.<\/p>\n

\u201cFor all of that conversation about this imagined exodus, we have to reckon with the very real exodus that we are seeing in this city: an exodus of working-class people,\u201d Mr. Mamdani said.<\/p>\n

But Ms. Hochul, a more moderate Democrat who is up for re-election in November, has repeatedly expressed fears that wealthy residents would decamp to lower-tax states like Florida.<\/p>\n

\u201cI need people who are high net worth to support the generous social programs that we want to have in our state,\u201d she said at a forum in March<\/a>, urging wealthy residents to \u201cgo down to Palm Beach and see who we can bring back home.\u201d<\/p>\n

Will millionaires accept higher taxes?<\/p>\n

New York City already has the nation\u2019s highest income taxes for the highest earners, with households that make more than $25 million per year paying a combined state and city rate of 14.78 percent. Some experts worry about the effects of raising taxes further.<\/p>\n

But research shows that past tax increases by states<\/a> have not led to an exodus of wealthy residents. And millionaires have many reasons to stay in New York City<\/a>; taxes are just one factor guiding where people decide to live.<\/p>\n

Other states have raised income taxes on millionaires<\/a>, including New Jersey in 2020<\/a> and Massachusetts in 2022<\/a>, and did not see significant departures. In Massachusetts, lawmakers approved a 4 percent tax on incomes over $1 million, and revenue has exceeded expectations.<\/p>\n

California<\/a> and Washington<\/a> have recently moved to tax the rich, driven by concerns over growing income inequality in America.<\/p>\n

Economists and other experts have long debated what level of taxation might affect migration.<\/p>\n

Cristobal Young, an associate professor of sociology at Cornell University who studies tax-driven mobility, said that past increases did not lead to wide-scale migration, and the impact of Mr. Mamdani\u2019s plan on millionaires would be minimal. But he noted that the mayor has called for a higher rate than other localities in the United States.<\/p>\n

\u201cIt\u2019s really important to continue to study and monitor carefully what is the effect as you push the rate to higher levels than what we\u2019ve seen in the past,\u201d he said. \u201cWe don\u2019t know if there might be some nonlinear place where the straw that breaks the camel\u2019s back kicks in.\u201d<\/p>\n

Mr. Young said that a combined federal, state and local income tax rate of 66 percent could be a threshold at which tax increases are no longer productive, pointing to a model called the Laffer Curve<\/a>. The combined rate in New York City is still far from that, at roughly 51 percent for the highest earners.<\/p>\n

Other experts believe that the threshold would be higher in a city as appealing as New York City. They also note that in the 1950s, the top federal income tax rate exceeded 90 percent<\/a>.<\/p>\n

Gabriel Zucman, an economist at the University of California, Berkeley, who appeared with Mr. Mamdani on Tax Day, said research clearly showed that the rich would not leave en masse.<\/p>\n

\u201cIt is largely indeed a myth, and it\u2019s more than that \u2014 it\u2019s frankly almost propaganda,\u201d he said. \u201cThere\u2019s not a zero response. But it\u2019s very small.\u201d<\/p>\n

Steven Fulop, president of the Partnership for New York City, an influential business group, said he was worried about the effect a tax increase could have on New York\u2019s competitiveness with states like Texas.<\/p>\n

\u201cNew York City has a lot of really special attributes, and that is hard to replicate,\u201d he said. \u201cBut at what point does the cost-benefit analysis tilt the other way? Nobody knows for certain.\u201d<\/p>\n

Some rich New Yorkers have left already. Mr. Trump changed his primary residence to his Florida estate<\/a> in 2019, and more wealthy residents followed during the pandemic. Stephen Ross, the real estate developer, moved to Florida in 2021 and encouraged business leaders to join him<\/a>.<\/p>\n

Still, many wealthy residents have deep roots in New York: jobs, family, homes, ties to their neighborhoods, enthusiasm for the city\u2019s restaurants and its arts institutions.<\/p>\n

The number of millionaire tax filers in New York City has grown over the last decade, from about 25,000 in 2014 to 34,300 in 2023, the last year for which data was available.<\/p>\n

There was a slight dip in 2022 after the disruption of the pandemic. But the figure is rebounding, even after a state tax increase.<\/p>\n

What would the tax increase pay for?<\/p>\n

Mr. Mamdani says his income tax proposal could raise $3 billion per year. He wants to spend it primarily on free child care.<\/p>\n

The city is currently using $1.2 billion in state funding to pay for an expansion of free child care<\/a> to some 2-year-olds. The city already offers free preschool for 3- and 4-year-olds, and Mr. Mamdani wants to eventually provide free child care to every child under 5.<\/p>\n

Mr. Mamdani will need billions more to keep adding child care seats, as well as to pay for other priorities like free buses and affordable housing<\/a>. He also wants to increase the city\u2019s corporate tax rates to raise another $1.5 billion to pay for his policy ideas.<\/p>\n

What are some alternatives to taxing the rich?<\/p>\n

Some experts have called for alternative strategies to secure a similar amount of money to plug the city\u2019s budget deficit and to pay for child care: cutting city spending, boosting efficiency or raising revenue in other ways.<\/p>\n

Andrew Rein, president of the Citizens Budget Commission, a nonpartisan think tank, said that the city had a spending problem, not a revenue problem.<\/p>\n

\u201cWe keep adding programs, and a lot of these are great,\u201d he said. \u201cWe never made an effort to cull spending to make government more efficient.\u201d<\/p>\n

The city\u2019s roughly $127 billion budget has soared<\/a> over the last two decades, fueled in part by strong economic growth and an influx of federal funding during the pandemic.<\/p>\n

Mr. Mamdani has embraced some of those ideas<\/a>. He also signed an executive order<\/a> to create a \u201cchief savings officer\u201d at every agency to \u201cstreamline processes and eliminate waste.\u201d<\/p>\n

Urban planners have floated ideas<\/a> that include a proposal to expand parking meters that could generate $1.2 billion per year.<\/p>\n

And conservative voices, including Bruce Blakeman, the Republican candidate for governor, and the Manhattan Institute<\/a>, a think tank, have called for lowering taxes<\/a> instead of raising them.<\/p>\n

The prospect of spending cuts has been met with fierce opposition by groups that work with the one in four New Yorkers who live in poverty<\/a>.<\/p>\n

Christine Quinn, president of WIN, the city\u2019s largest provider of shelter for homeless families, said that freezing housing vouchers would hurt homeless children who are \u201cnot a budget line item.\u201d<\/p>\n

\u201cCutting back this program will cause more human suffering and trauma and add to homeless numbers in the future,\u201d she said.<\/p>\n

Additional work by Eden Weingart.<\/p>\n

\"\"\/<\/p>\n

Emma Fitzsimmons<\/p>\n

Reporter covering New York<\/p>\n

Taxing the rich has gained momentum in Democratic-led states, and the debate is particularly charged here in New York City, the nation’s financial capital.Mayor Zohran Mamdani ran on two policies that are intertwined: taxing the rich and providing free child care. He needs the first to pay for the second.We talked to experts about how raising income taxes on millionaires has not led to an exodus of wealthy residents in the past. But there is genuine disagreement about what tax level might change migration. I spoke to two tax lawyers for wealthy clients. One said a family wouldn’t leave New York City over paying an additional $20,000. Another said wealthy New Yorkers resent being targeted, and more could leave if taxes keep rising.<\/p>\n

Read all comments<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"State lawmakers in New York are considering several proposals to tax the rich, including a tax on luxury…\n","protected":false},"author":2,"featured_media":217841,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[1670,10868,24616,1445,9,24,11,10,49,51,50,5288,1446],"class_list":["post-217840","post","type-post","status-publish","format-standard","has-post-thumbnail","category-new-york","tag-high-net-worth-individuals","tag-income-inequality","tag-income-tax","tag-mamdani","tag-new-york","tag-new-york-city","tag-new-york-headlines","tag-new-york-news","tag-new-york-state","tag-new-york-state-headlines","tag-new-york-state-news","tag-taxation","tag-zohran"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/217840","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=217840"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/217840\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/217841"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=217840"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=217840"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=217840"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}