Proposed Tax Surcharge by NYC Mayor’s Allies
Allies of Mayor Zoran Mamdani in the state Legislature are advocating for a bill that would enable him to implement a 25% tax surcharge on corporations in New York City.
The democratic socialist mayor, along with his progressive supporters, is pushing an ideological agenda aimed at increasing taxes on the wealthy and corporations. The goal is to fund various promises made during his 2025 campaign.
According to a memo from Rep. Diana Moreno and Sen. Kristen Gonzalez, “This bill would authorize the City of New York to impose a surcharge on corporate taxes, allowing the City to increase corporate taxes as deemed necessary by the Mayor and City Council.”
Moreno, who is also a Democratic Socialist, previously filled Mamdani’s position in the state Legislature before he became mayor.
Gonzalez represents a diverse district that includes parts of western Queens, northern Brooklyn, and the East Side of Manhattan.
The lawmakers expressed that revenues from increased corporate taxes could help tackle the affordability crisis and enhance public services for city residents. However, the bill summary does not clarify how much additional revenue the proposed increase would generate; it’s stated as “undetermined.”
Mamdani has conveyed his desire for Governor Kathy Hochul and the Legislature to consider raising income and corporate tax rates on billionaires to address a significant budget gap, rather than resorting to an unpopular 9.5% hike in property taxes.
“New York City hosts numerous Fortune 500 companies, yet the corporate tax rate for those with profits over $5 million stands at 7.25%—much lower than New Jersey’s rate of 11.5%,” the lawmakers noted.
However, business advocates argue that the figures used by city officials are misleading.
They point out that New York City’s effective top marginal corporate income tax rate, which includes additional levies like the MTA surcharge, is already at 17.44%, significantly higher than New Jersey. Under Mamdani’s proposed increase, this could escalate to 22.48%.
Steve Fulop, CEO of the New York City Partnership, remarked on a radio program last week that accepting such proposals could lead to taxes that are “100 percent higher than in New Jersey.” He argued, “People might not need to relocate to states like Texas or Florida; they could just move a short distance away.” He cautioned that this poses a substantial risk to New York’s economy.
While individuals are keen to live in New York, he emphasized the necessity of maintaining a competitive economic landscape.
In contrast, the head of a budget watchdog organization argued that the focus should be on cutting substantial spending rather than increasing taxes.
Andrew Lane, Chairman of the Citizens Budget Committee, stated that tax hikes would only serve to make New York less affordable and would impact the very services supported by these taxes. He noted, “New York already tops the charts in terms of per capita taxes collected.”
Governor Hochul, who is running for re-election for a second term, has expressed opposition to significant tax increases this year but remains uncertain about resisting pressure from her party after the upcoming election. She’s facing a challenge from Republican Nassau County Executive Bruce Blakeman.
