Mamdani Wants to Tax the Rich. Can He Persuade State Leaders?

After an impressive victory, Mayor-elect Zohran Mamdani now must find funds for his programs. His push for higher taxes puts Gov. Kathy Hochul, who faces a re-election fight, in a tough spot.

Just days after Zohran Mamdani captured the race for mayor of New York City, he found himself confronting his next battle: getting state leaders to raise taxes or find other funding streams to pay for his affordability agenda.

The effort started this week in Puerto Rico, where Mr. Mamdani arrived on Thursday along with many of the state’s top Democrats, including Gov. Kathy Hochul, for their annual conference to mingle, muse about Election Day and make early headway on the issues looming in the coming legislative session.

Mr. Mamdani’s overarching imperative is to persuade Ms. Hochul and the state’s other leading Democrats to find a way to pay for his proposals to freeze the rent, make buses fast and free, and make child care available to all New York families. That would almost certainly mean raising taxes — something lawmakers are typically loath to do. Next year, when the governor and legislators face re-election, they could be especially reluctant.

Ms. Hochul even signaled the depth of Mr. Mamdani’s challenge on Thursday evening when, speaking before a crowd in San Juan, she was interrupted for the second time in two weeks, with calls to “Tax the Rich.”

“I hear you,” Ms. Hochul said, then quickly offered a warning: “I’m the type of person — the more you push me, the more I’m not going to do what you want.”

Mr. Mamdani is asking for a lot. Expanding child care to cover children as young as 6 months could cost between $5 and $8 billion, by his team’s calculation. Extending the policy statewide could easily cost twice that much.

The mayor-elect has proposed a new two percentage point tax increase on residents making more than $1 million a year, which Mr. Mamdani says would net about $4 billion annually. The increase would raise the city income tax on the wealthy to about 5.9 percent from about 3.9 percent.

Under that scenario, an individual making $2 million a year who pays roughly $77,000 in city income taxes could pay $117,000 — a roughly 50 percent increase. Some business leaders and economists have argued that such an increase would lead people to decamp to Connecticut or Florida.

The governor has repeatedly pledged not to raise income taxes. But she has been less dismissive of Mr. Mamdani’s proposal to raise the corporate tax rate from 7.5 to 11.5 percent, which would bring New York in line with the highest corporate tax rate in the nation, New Jersey. (The 2017 Trump Tax and Jobs Act capped the amount of state and local taxes individuals can write off, but corporations have no such limit.)

Kathryn Wylde, who leads the Partnership for New York City, said that no tax increase would be popular with her members, but suggested that raising the corporate tax rate might find more allies than increasing personal income taxes on the wealthy.

She said that while the business community was broadly opposed to new taxes, there had been numerous instances — in the aftermath of the Sept. 11 attacks, for example — where business leaders worked with government to create funding streams for targeted spending that they believed also benefited the economy.

Child care was one such cause, she said, but achieving it would require a pragmatic approach rather than a utopian one. Ms. Wylde argued for encouraging home-based care instead of building commercial spaces, streamlining the regulatory system and removing bureaucratic hurdles for enrollment in existing programs.

There have been some signs that Mr. Mamdani’s victory, and the energy he stoked, could lead the state’s power players — from business leaders to top Democrats — to give him more leeway than once expected.

“There’s traditionally a deference to a new mayor,” Michael Gianaris, the deputy majority leader in the Senate, said on Thursday from Puerto Rico, “especially one that has a significant mandate, like Zohran.”

Mr. Gianaris suggested that Mr. Mamdani’s unyielding focus on the topic, and the response it got from New York City voters, could be enough impetus for lawmakers to more seriously consider raising taxes on the wealthy.

“The freak-out about millionaires getting taxed is mostly coming from the millionaires,” Mr. Gianaris said. “And not even all of them!”

At the center of the drama is Ms. Hochul, a moderate Democrat, who is expected to face a heated re-election challenge next year from Representative Elise Stefanik, a Republican star and a staunch ally of President Trump.

Ms. Hochul is preparing her legislative priorities, which she will lay out in a mid-January speech and preliminary budget proposal. As a longtime champion of families who has expanded the child tax credit and made school meals free for all children, Ms. Hochul has said she is interested in expanding child care across the state, without offering details on funding streams.

The governor and her aides are now studying a number of ways to raise revenue to fund child care expansion, and also to backfill federal cuts ordered by President Trump and congressional Republicans, according to people familiar with the matter. But she may be understandably reluctant to raise taxes as she faces re-election.

Mr. Mamdani’s first formal opportunity to make his requests will come in February on what is known as Tin Cup Day, where city leaders come up to Albany and testify about their budget priorities.

The Assembly and Senate will incorporate these ideas into budget proposals of their own. Then the leaders of each chamber will meet Ms. Hochul to negotiate and agree on a final budget.

In this case, Mr. Mamdani’s goals of higher taxes align with many of his colleagues in the Legislature, where he has served since 2021. Both houses of the Legislature have included tax increases on the wealthy in their budget proposals in the past years, though all were dropped in negotiations.

There may also be the opportunity for compromise.

On the campaign trail, Mr. Mamdani repeatedly said that he wanted to achieve the policies of his campaign, and would be receptive to considering alternative funding ideas from his political counterparts to pay for his proposals.

In 2014, Bill de Blasio did just that. He proposed a wealth tax to help pay for his proposal to make prekindergarten free for every 4-year-old in the city. The governor at the time, Andrew M. Cuomo, refused, but found alternate funding — allowing Mr. de Blasio to proceed on what became the signature achievement of his mayoralty.

Dana Rubinstein and Emma G. Fitzsimmons contributed reporting.

Related Content