Mayoral Candidate Zoran Mamdani’s Plans Under Scrutiny

In this month’s Democratic primary, mayoral candidate and Queens Councilman Zoran Mamdani has made waves by backing a significant expansion of city government. His campaign touts his ability to secure funding for these ambitious initiatives, but the question remains: can he really deliver?

Mamdani’s platform includes proposals for free childcare, expanded public housing, and the elimination of bus fares and CUNY tuition—ambitious goals that certainly come with hefty price tags.

He claims that New Yorkers can expect to see $10 billion in new revenue, which, while substantial, represents less than a fraction of the city’s entire budget.

Interestingly, Mamdani has notably downplayed the cost of his agenda, but even if he hadn’t, it’s clear he lacks the authority to enact many of these plans.

Much of his proposed revenue would come from two tax increases targeting businesses and high earners, adding up to about $9 billion. However, he is not in a position to implement these taxes independently.

If by chance he finds himself in charge one day, he’d still need the backing of Governor Kathy Hochul and the state legislature to push through these so-called “revenue raisers.”

Local government in New York City can’t unilaterally set personal or corporate income tax rates, which has its roots in the city’s past financial struggles and recent budget surpluses.

Another potential issue is that candidates often misjudge how taxes work. And Mamdani seems to be one of them.

He frequently compares corporate tax rates in New York (7.25%) to New Jersey’s (11.5%) and suggests they should “match” New Jersey’s figures. However, it’s important to note that most corporate taxes in New York are collected at the state level.

As it stands, the largest businesses in New York City already pay significantly more than their counterparts elsewhere.

Before taxes go to Albany, New York City businesses already face corporate taxes, with small businesses paying at least 6.5% to 9%. To add to that, they incur additional fees to support local transit and pay state franchise taxes.

In total, the combined rate for local businesses in the city often exceeds 17.4%.

For them, trying to “match” New Jersey would be like a tax cut.

Moreover, there are rumors of Albany hiking corporate taxes by $5 billion this year, potentially raising the top rate to an astonishing 22%.

It’s also worth noting that tax revenues do not go straight to the five boroughs; they still reside with Albany.

Mamdani would have to persuade both lawmakers and the governor to allocate these funds in ways that fit his vision, which may prove more challenging than he anticipates.

When looking at other states, like North Carolina, which has recently cut corporate taxes, it becomes clear why companies are flocking there.

Pennsylvania is also in the process of reducing its top corporate rate from 10% to 8% this year, with plans to further lower it to 5% by 2031.

Beyond rhetoric, even Albany cannot overlook the reality of remote work and the risk that major employers might relocate or limit their growth elsewhere.

This isn’t the only area where Mamdani’s understanding of tax policy appears lacking.

His other proposed tax hikes could require New Yorkers earning above $1 million to pay an additional 2% to the city, stacking on top of other taxes they already face.

Recent trends indicate that higher earners are increasingly seeking to relocate to avoid burdensome state taxes. Some are limiting their time in New York to minimize exposure to these taxes.

Another snag is that New York taxes individuals based on their activity in the state, even if they’re not residents. In contrast, the city has limited its income tax to residents—putting further restriction on its taxation powers with Albany’s consent.

Many residents are able to tolerate the existing tax burden of nearly 3.9%. Yet, an increase could significantly alter behavior.

A couple earning $1 million could save around $53,000 in city taxes just by moving to nearby areas like Westchester or Nassau.

In effect, that translates to nearly an $18,000 gain for wealthy individuals who opt to leave.

If Mamdani manages to win, he and his supporters could soon face the harsh truths of fiscal reality—a reality they may be particularly ill-prepared to handle.